Debt Free Is The Way To Be: 3 Ways to Manage Your Debt

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Does the following scenario sound familiar?

You receive an envelope in the mail containing a nice, shiny plastic card. Your eyes widen and glisten, while images of shoes, purses and designer dresses float through your head. You imagine all of the beautiful and expensive things that you could buy. You look at your credit limit, and think to yourself, “I’m rich!”.

3 months later another envelope arrives, this time with no shiny plastic card in it, instead it’s a bill. Thoughts arise in your head, “Did I really spend that much?” “I only swiped the card a few times?” “How will I pay all of this back?” These are common questions and experiences that many college students, including myself, and adults have faced time and time again.

We say that this will be the last time we use the card and promise ourselves to only use cash from now on. But then that last minute emergency arises or that must have item goes on sale and before you know it you are hundreds, sometimes even thousands of dollars in debt and must succumb to the endless world of minimum payments and bill collector calls.

For many of us the word “debt” is a scary word. We think being in debt is only something irresponsible people do. Quite the contrary, remember it is the credit cards company’s job to sell to us the dream of “no cash, no problem . . . pay later”. We all fall into this trap. What we don’t always think about is the, “pay later” part, includes that little word called “interest”. Interest is the fee on top of the amount that you already owe on your card, which is provided to the bank for “loaning” you money. Interest rates can vary from reasonably low to extremely high.

So is it possible to become debt free? Of course it is! Here are some tips & tricks to help start you on your journey to becoming debt free!

  1. You Need To Cuuuut-It!

The first step in becoming debt free seems like an obvious step, right? Stop spending! However, this seemingly simple concept is much easier said than done. I know it’s hard but the first step in becoming debt free is to cut off the source of the very thing that got you there in the first place. Cut up any credit cards that you have in an attempt to stop using them.

  1. Do Your Research

Find out your overall monthly income and budget out your weekly expenses for a month. Include essentials like groceries, gas or metro card, bills, and any extras for activities. Post this sheet in a place where you can refer to it when you get the urge to spend unnecessarily. This will help in reducing your cost to spending ratio and help you to become more financially knowledgeable.

  1. Work it Out!

Work out a budget plan for yourself and give yourself a “realistic” timeline, based on your income on when you will have your debt paid off. Make sure to account for interest rates when calculating. Your goal at first can be small but that’s ok, you can work up to a bigger one. For example, you may start off with paying $25 on a credit card each pay period and then increase to $50.

Some Additional Tips:

  • Double up on payments. This is a great way to get to your end goal faster!
  • Don’t just pay minimums. Credit card companies love to trap you this way and keep you paying on the card for years. If you can, always try to pay higher than the minimum amount required.
  • Sign up for automatic payments. This is great because your payments are deducted straight from your account and you don’t ever have to see it.
  • Once your credit card is fully paid off, try to avoid getting another. But if you are like me and like to keep a credit for emergencies, then only spend what you can pay right off.
  • Lower your limit. Credit card companies love to give college students high limits, because let’s face it, they know that most likely we will spend it. Lower your limit to a reasonable amount, that way if you overspend, it will be an amount that you can handle and are comfortable paying off.

It will not be easy in the beginning, but trust me it will “pay off” in the end!

We would love to hear from you! These are just a few tips and suggestions that have worked for me over the years for me. Please feel free to list any additional tips and tricks that have worked for you.

 

Shannan Burrell

Campus Contributor

Shannan Dione Burrell was born in Heidelberg, Germany. Growing up, she thrived in the areas of performing arts, participating in dance, theater, and music. She received her Bachelor of Arts degree in Broadcast Journalism from Hampton University, Hampton, Virginia, in 2010 and is currently pursuing her Master’s degree in Film and Video at American University, Washington D.C., where she is scheduled to graduate May of 2017. Shannan has always had a passion for volunteering and helping others within her community. She has been an active member of her church Emmanuel AME Church in Fredericksburg, Virginia. Throughout her years at Emmanuel, she has participated in numerous ministries including the Praise Dance Ministry, Young Adult Ministry, Youth Ministry, and Women’s Ministry. Shannan grew up a member of the Girl Scouts of America organization. Her 12 years as a Girl Scout prepared her to become an effective volunteer within the community and a role model for young women. Shannan is currently volunteering with the Best Kids mentoring program in Washington, D.C., which specializes in mentoring inner city youth and foster children. Shannan also has a passion and vison for storytelling through media. She has over 10 years of experience within the media field, which includes numerous internships with companies including Arena Stage Theater in Washington D.C., The Ft. Belvoir Eagle Newspaper in Ft. Belvoir, Virginia, Clear Channel Communications in Rockville, Maryland and Gannett/USA Today in McLean, Virginia. Her many years of experience have prompted her to write, direct, and produce over 15 original productions for her church and community. Shannan’s mentors and role models are that of her family, church family, and fellow aspiring African American women in the media field such as Ava DuVernay and Oprah Winfrey, who have worked at paving the way for minority storytellers within the entertainment industry. Shannan hopes one day to open up a production company for minorities, which will inspire, motivate, and empower them to follow their passions through the arts. Shannan’s favorite scripture is Philippians 4:13 “I can do all things through Christ who strengthens me.” She credits this verse for inspiring her to overcome all obstacles within her life and to work hard to succeed and excel at being a good role model for young women within her church and community.

 

Walker's Legacy is a growing global women in business collective founded to establish networks of empowerment and access for women of color in business.

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