Paying off your debt can be hard, especially in the beginning when you are looking at that daunting number. And that is why I highly recommend getting a financial accountability partner. Mine is, of course, my brother. We both have our goals set on getting debt free and together we are both on our way to financial independence and freedom.
Three Reasons Why You Need an Accountability Partner
There are three reasons why I recommend getting an accountability partner. See the following:
Not everyone will have this problem, but generally speaking, most people are lazy from time to time. So many times I see people saying they will just start saving money tomorrow and then eventually that becomes a pattern. They never actually start the process of setting up a budget or figuring out what they could cut out from their monthly budget. Yes, this actually requires some time and work! But you should take the time and put in the work otherwise you will forever be stuck in that “debt rut” like most of America.
Did you know that 35 percent of Americans have unpaid bills reported to collection agencies? That is crazy! That is more than just being in debt, that means every third person you pass on the street currently has debt in collections.
Image Source: Huffington Post
There is nothing better than a little healthy competition, especially when it comes to debt! My brother and I might be taking it to the extreme but we are really anxious to see who will finish 1st. The great thing about a competition about paying off debt that fastest is that there really are no losers because having less debt makes you all winners.
Healthy competition can make you second guess yourself on everything you do, which is a good thing. Maybe you are driving past your favorite fast food joint, but instead of swinging through you ask yourself is your competitor wasting money on this? Maybe not, so you decide to go home and cook food instead. Healthy competition can really speed up the process of pinching your pennies.
Two Heads Are Better Than One
When it comes to saving money and getting debt free there are a lot of tricks to saving money and I guarantee you by yourself you will miss something. That is why two heads are better than one. Discuss your strategies with your accountability partner and share ideas.
Just the other day my brother and I were discussing how we use our credit cards. Yes, this is where we both disagree with Dave Ramsey (my brother will be discussing this in detail in a future post so make sure to subscribe to our newsletter). We both use one credit card for everything. We do this so we can earn the cashback. We simply pay them off every couple days so we don’t get hit by interest (this is where most of America fails). In fact, I pay mine off every night :). I was looking at my cashback rates and my brother happened to mention the Quicksilver card. I am sure you have all seen the Samuel Jackson commercial…. “Unlimited 1.5% cashback, everywhere, every damn day.”
After doing a little more digging into the details of this card and my current Wells Fargo credit card, I realized I was only currently earning 1% cashback on everything. Now .5% is not a lot but it does add up over time and is literally free money. For example, with my current card if I spend $1,500 a month I am getting $15 cashback per month. If I increased that to 1.5% cashback I would be earning $22.50 per month. An additional $7.50. While that isn’t a lot, it is almost enough for a hair cut! So I actually switched credit cards. Also if you have good credit, which I did, you can get the Quicksilver cash back card from Capital One with no annual fee and $100 bonus upon signup.
I don’t advise anyone to use credit cards unless they have the discipline to pay them off every month!
As you can see this little credit card switch all happened because of the discussion I had with my brother. So it is always good to discuss your finances with other people as you will probably always find better ways to save money and be on the fast track to paying off your debt faster.