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Striving to be Debt Free

Posted by Benjamin Coakley on Thu, Aug 16, 2018 @ 08:23 AM


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A WaypointRx Company 

debt freeLet's face it - getting out of debt is hard. Whether you have a mortgage payment, car payment, student loan debt, healthcare costs, or any other significant debt, paying it off can be a challenge. The good news is, you are not alone, and there are some tips and tricks to help you not only reduce your debt, but eventually become debt free. 


Additionally, once your debts are paid off, we can look at some ways to help you save that money for your future plans/goals. 


All debts can seem daunting, but if you break it down, it becomes a much easier problem to solve

  1. Get rid of your credit cards if you are using them to pay for your debt expenses
    Too many people rely on their credit cards to pay off debts. As a rule of thumb, if you can't afford to pay cash for something, don't buy it. There are a lot of cards out there that offer incentives to use them (i.e. travel points, rewards, etc.); but if you are using your credit cards as a crutch and aren't actually paying off your debt, their long-term interest rates will significantly impact the amount you owe in the end. 

  2. Follow Dave Ramsey’s snowball effect and pay the smallest debts off first
    We recommend following Dave Ramsey's snowball method to get your debts paid off. Start small and keep building until all of your largest debts are paid. For a free copy of the debt snowball tool, click here.

    Below is an example of the debt snowball, pulled from Dave Ramsey's website:
    Say you have the following four debts:
    1. $500 medical bill ($50 payment)
    2. $2,500 credit card debt ($63 payment)
    3. $7,000 car loan ($135 payment)
    4. $10,000 student loan ($96 payment)


    Using the debt snowball method, you would make the minimum payments on everything except the medical bill. For this example, let’s say you have an extra $500 each month from taking a side job and cutting your expenses down to the bare minimum.

    Since you’re paying $550 a month on the medical bill (the $50 payment plus the extra $500), that debt will be done in one month. You would then take that $550 and attack the credit card debt. You can pay $613 on the plastic (the freed-up $550 plus the $63 minimum payment). In about four months, you’ll wave goodbye to the credit card. You’ve paid it off!


    Now punch that car loan in the face to the tune of $748 a month. In 10 months, it’ll drive off into the sunset. Now you’re on fire!
    By the time you reach the student loan—which is your biggest debt—you can put $844 a month toward it. That means it will only last about 12 months. After that, Sallie Mae better get used to living somewhere else, because you’ve kicked her out!


    Thanks to your hard work and sacrifice, you have paid off $20,000 of debt in only 27 months using the debt snowball method! Congratulations!


  3. Set a budget that allows you to develop a rainy-day savings and stick to it.
    Once you have paid down your debts, take all of that money you have been using each month and put it into a savings account. By building up a rainy day savings, you will be able to pay for unexpected expenses without going into debt again. A recent Federal Reserve Board report found 44% of adults had to sell something or borrow money to pay for an emergency costing $400. For many, a few hundred dollars is enough to tip the scale into debt. So a savings fund is crucial for when emergencies happen.

  4. Set a goal for yourself of being debt free by a specific date, and hold yourself to it.
    Life is filled with unexpected happenings, so it is understandable if you end up getting into some debt. However, as part of paying off your debts, set and stick to a debt free date. If needed, find a suitable reward for all of your hard work (i.e. treat yourself to a nice night out). DO NOT OVERDO IT. It wouldn't do you any good to go right back into debt, once you get out. 


In our experience, there are a common mistakes people make when it comes to their finances. 

  • Not having money put into savings each month. This isn't just your 401k or IRA, this refers to a basic rainy-day savings account with money you can easily access in an emergency.
  • Borrowing from your 401k. There are several unfavorable consequences for doing this, so we recommend avoiding it completely. 
  • Attempting to 'get rich quick'. There is no magic solution. It takes time and effort to become truly debt free. Many people who attempt to get rich quick, end up losing money, rather than saving. 
  • Living outside your means. This goes back to what we said earlier - if you can't afford to pay for it, in cash, right now, then don't buy it. Avoid letting your wants outweigh your needs. Practice self-control and only purchase that which you need. 

Luckily, there are simple solutions to all the common mistakes people tend to make. Many of them are focused around looking at your problems from a different angle to help you find a better solution.

  1. See if there are other places to cut costs to save you money. (e.g making your lunch every day instead of eating out, reduce your impulse spending by paying for everything with cash)
  2. When shopping, follow a specific list and don’t deviate. This will help you stick to your budget.
  3. Find new ways to generate more income. Turn a hobby into a money maker, have a garage sale, get a second job for 1 year to help pay off all of your debts and start building savings.
  4. Talk with one of our financial advisors on ways to help you with your unique situation.

At the end of the day, one of the most important things to do is address who you got into debt in the first place. Did you lose a source of income, did you have a log of random/unexpected bills, do you have issues with spending habits? Whatever your situation, there are things you can do today to help ensure the problem doesn’t affect you long term. It won’t be easy, and sometimes sacrifices have to be made, but in the end having a clear understanding of why you want to be debt free will help motivate you to keep striving to meet your goals.



For more information, click the button below and set up an appointment with one of our advisors. 

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We also recommend you visit and check out our free webinar on Establishing A Game Plan for additional tips and tricks for finding and following your financial goals.

At WaypointRx & Pharmacist Financial, we take pride in helping pharmacy owners & staff pharmacists reach financial goals, make educated decisions, & develop financial plans that work best for their unique needs. Over the years we have helped hundreds of pharmacists enjoy inspired independence by achieving greater personal and financial success. As we begin each relationship, we invest a lot of time and effort in the discovery and clarification of each pharmacist’s unique situation and, most importantly, their financial goals.

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Topics: debt reduction, savings, saving money, Blog, financial security, pharmacist financial