*Note: This was written by a Yahoo! contributor. Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
I’m 28 years old. Well, 28-1/2 if you want to get technical.
That means the big 3-0 is looming in less than 18 months and I’ve made it my goal to get myself out of my self-imposed debtor’s prison before that day comes.
It’s not going to be easy, I know that. I’ve managed to dig myself into a pretty good hole, thanks to credit cards, student loans and silly decisions, Luckily, I’ve already reformed my personal outlook on money, so now it’s time to do battle with my real enemy: debt.
Backstory: How I Got Into This Debt Mess
I’m really, really lucky — I have great parents who taught me that it’s important to pursue my dreams and what makes me happy. I’ve always been a big dreamer, so I took their words to heart. I’m happy to say I’ve packed a lot of living into my 28.5 years — including several trips abroad, study abroad stints in both the U.K. and Spain and plenty of other adventures packed in between.
I’ve had great experiences, but with them came debt. I took out several student loans to cover my college education and study abroad trips. As a result, I have much more student loan debt than the average college graduate.
I also spent a few of my post-college years searching for the right career for me. This means I relied on credit more than I should have — and I don’t like that.
Now, I’ve settled into a career that I love — multimedia journalism — and I wake up every day inspired to work harder to achieve both my career and financial goals.
My Debt Payoff Plan
I first started on this debt-free journey a couple of years ago when I started researching credit reports, scores and debt payoff methods. I enjoy the topic and consistently write on financial topics to help teach others to avoid the same mistakes I’ve made.
One financial expert I discovered during my education is Dave Ramsey. His no-nonsense, anyone-can-do-it advice is refreshing — and he’s not trying to sell anyone on get-rich-quick schemes or confusing debt payoff methods. He preaches spending less, saving more and using the debt snowball method to get rid of debt.
So, here’s the plan I’m implementing so far.
— Emergency Fund: I’m in the process of saving $1,000 as a mini-emergency fund to give me a cushion of money in case something happens.
— The Great Credit Card Freeze: I stopped using credit cards over a year ago, and I don’t plan on using them again anytime soon.
— Debt Snowball: I’ve created a spreadsheet listing all of my debts, interest rates and payment amounts so I can tackle them in order of smallest to largest or highest interest to lowest interest. Ramsey recommends this method because completely paying off one debt can inspire you to keep going. Right now I’m focusing on paying off my $4,000 Wells Fargo private student loan within six months. My Discover Card is next on the chopping block after that.
— Budget: I’m obviously new to the budgeting game, so this is probably the biggest challenge for me. I’m still figuring out what works for me, but I’m happy to report that I’m starting to get the hang of it.
— Money, Money, Money: I’ve always been a busy girl. I held down two and three jobs during college because I love making money and being super busy. I’m continuing that today by taking on every extra work project I can find to throw money at my debt. I’ve created multiple streams of income and made a commitment to never turn down a project if I can help it.
Will It Work for You?
My hope is that I can inspire other twentysomethings to get out of debt. I’m not a great example now, obviously, but I plan to celebrate my 30th birthday with a drink in one hand and debt-free life in the other.
My approach may not work for everyone, and that’s fine. Dave Ramsey and other financial gurus give advice, but they always say that each situation is different and you need to adjust to your own goals and lifestyle. I’m happy to say that I’ll never sacrifice a fulfilled life for a debt-free one, but I’m going to do my best to have both.
More from this contributor:
How Your FICO Score is Calculated
Six Ways to Save for a House Down Payment
How to Accomplish Your 2011 Financial Goals