Broke and in debt? Give yourself a money makeover • Everyday Cheapskate

There’s nothing like a job-layoff notice, getting a call from the bank saying you’ve bounced your account again and you’re overdrawn, discovering your credit cards are all maxed out—or, in my case, back in the ‘80s, learning that our home was about to be foreclosed—to tell you that things need to change. Something’s gotta give. You think more money is the answer, but what you really need is an extreme money makeover.

Give Yourself a Money Makeover

What follows is a simple overview of how to get started conducting your own money makeover. These examples and suggestions may or may not apply directly to your situation but are easily adaptable. Make a promise right now that you will read to the end. Give me a chance to help you get started moving in the right direction—now. Today!

Assess Your Current Situation

Any makeover worth its salt needs a realistic before picture. A million thoughts swirling in your head are keeping you stuck. You need a clear picture of exactly where you are today, right now. This “before picture” will be the starting point and give you a way to measure your progress.

Find a piece of paper and something to write with. Start by writing down today’s date at the top. Next, describe your current financial situation in detail. A few paragraphs should do it—no whining, just the facts. How much cash do you have available right now? Write down the amount. Which bills are overdue? List them with their exact amounts. What are your specific, desperate financial needs today? You know what to do (write them down!).

Embrace the Right Attitude

Face it. The only thing you control absolutely is your attitude—the way you choose to respond to life and all of its challenges. This is a season in your life that has come and will go. It’s not forever. You can handle anything as long as you know it will end. Choose to face your extreme situation with an equally intense response.

MORE: How to Beat Discouragement to Get Through Tough Times Stronger Than Ever

Get a plan

Set a goal for the immediate future, such as one week or the next 30 days, as part of your money makeover plan. Write a simple plan for how you will reach your goal, keeping in mind that a good plan is specific, reasonable, realistic, and finite, with a way to measure results. Give yourself a date by which you plan to complete this makeover. Now, create stepping stones so you can measure your progress.

Freeze spending

Yes, it’s extreme, but so is your makeover. Imposing a spending freeze for the next week or two will give you the jumpstart you need to pay those extremely past-due essential bills. Do not spend unless it’s a matter of life and death (prescribed medication, basic food to keep going, gasoline to get to work). Use what you have, eat from your freezer or pantry, cancel those plans. Get creative.

Track spending

Starting now—today—keep a written list of where your money goes. If you spend it, it better be written down. That is how critical tracking will be to your successful makeover.

MORE: How to Live on a Budget and Love It

Stop debting

Okay, it’s not really a word, but it should be. Creating debt means using a credit card. This has to stop because it negatively affects one’s net worth. No more debting.

Start saving

Even though you’re in debt, the bills are piling up, food prices soaring—five bucks a week consistently put aside will change your attitude about living frugally. Money in the bank (or hidden in the sock drawer) offers a kind of security and motivation that is difficult to describe. And the more you save, the more willing you are to find ways to make it happen in bigger and better ways.

MORE: How to Get $1,000 Into Your Emergency Fund Almost Painlessly

Sell assets

Unless you use it regularly or it’s a cherished family heirloom, selling assets to raise cash is a great way to return the powerful jolt that brought you to your financial knees. Consider utilizing platforms like eBay, Poshmark, Facebook Marketplace, or hosting a classic garage sale to sell items you no longer need. Use the proceeds to catch up on your bills, to start an emergency savings account, or to pay down debt.

Downsize

If you are in over your head with a mortgage you cannot afford or rent that is beyond reasonable, move. Or get a roommate. Yes, it’s extreme, but it may be exactly what you need to do.

Get another job

It won’t be forever, but for right now, working nights and weekends may be what you need to do. If a part-time job can net $400 a month, that’s $4,800 to apply to your situation.

MORE: How to Beat Discouragement to Get Through Tough Times Stronger Than Ever

Give up a vice

At $42 a pop (without tax or gratuity), giving up a bi-weekly manicure habit will save you at least $1,300 annually. Emery boards and polish are cheap. Other vices like cigarettes, fast food, fancy coffee drinks, and name-your-own are huge money drains.

Sell a car

Add up what it costs you to operate that second car—gas, payments, maintenance, insurance, registration, and washes—and it won’t be so difficult to live without it—at least for a while. Take the bus or ride a bike. You must be willing to do what you gotta do.

Embrace Change

Making significant lifestyle adjustments may be necessary to achieve financial stability. Whether it’s foregoing certain luxuries or adopting more frugal habits, embracing change is essential for long-term success.

Ready to take control of your finances?

The relief you will feel after taking such extreme measures to deal with your financial situation will far outweigh the temporary discomforts along the way. When you’re ready to get out of debt and stay out … I’d love for you to read my book.

Save $8.11

Debt-Proof Living: How to Get out of Debt and Stay Out

If you have been struggling to pay the bills, if you feel like you can't make your finances work, if you feel like your money situation is getting out of control, you need this book. It can change your life, just as it's changed the lives of hundreds of thousands of others already. Through this book, it has been my privilege to lead thousands of people out of debt and into a life of solvency and financial freedom. I’d love to know how you are doing with your money makeover!

Question: What’s the most extreme financial change you’ve had to make to your spending habits or lifestyle to improve your financial situation? I’d love to hear from you.

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Linda Wilson says:

April 23, 2024 at 10:29 am

I discovered you years ago and your advice got me out of debt in a surprisingly painless way. One hint for those who hate being on a budget. Call it a Spending Plan. “Budget” feels like a straight jacket of constant self denial while “Spending Plan” feels very positive. Sounds silly, but it makes a huge difference.

Mary Hunt says:
April 23, 2024 at 11:54 am

Thanks and happy to hear about your success!

Christina Schonbachler says:

March 11, 2021 at 1:42 pm

Thank you, Mary, for your commitment to helping us find financial freedom. You spoke at Indiana Wesleyan University about 30+ years ago. At the time, I was a single mom really struggling to make ends meet. I took copious notes and followed your advice from your book Debt Proof Living. It wasn’t always easy, but I feel so blessed to have a disciplined spending plan. I’m now retired and still follow your system in retirement. I’ve been debt free for several years now and maintain an 800+ credit rating. Thank you!!

Mary Hunt says:
March 11, 2021 at 3:58 pm

Christina … Wow! So happy to see you here. Now, what’s wrong with this picture: You’re retired … but I’m not?! Ha! So very proud of you. A little behind the scenes news: We’re working hard at building a whole new website: Debt-Proof Living for a New Generation. I guess my work is not yet done! Let’s stay in touch … I’d love for you to be part of that in some way. Telling your story? That would be great!

Broke and In Debt? How to Give Yourself an Extreme Money Makeover