I know I haven’t really talked a lot about how I actually got out of debt, so I thought I’d start a little series on how I did that. Just so you know, most of my progress came from the Money 101 tips from CNN Money. So, each post will be a personalized portion of their lessons – though I skipped a few and won’t make this as long as their list!

When I made the decision to get out of debt, I had swallowed my pride and moved back into my parents house. I wasn’t happy about it, but that was the way it was. I needed to crawl out of the debt I’d gotten into, and personally, I think it was a pretty good incentive to get it done. At any rate, this process started about a month after living back at home.

Setting Priorities – Money 101: Lesson 1

My process for setting priorities went something like this. I sat down with pen and paper and wrote down all of the things I wanted to cover in my financial life. By the time I was done, I had about 10-15 things I wanted to do. I had too much to focus on and realized the need to simplify what I was trying to accomplish.

# 1 – I needed to narrow my objectives

Of that list of 10-15, there were four that stood out – to me – as an immediate need. In no particular order here, they were:

• Build an emergency fund with 6 months expenses saved

• Pay off credit card debt

• Move out of my parents house

• Contribute to retirement accounts

These four things were what I wanted to focus my time and energy on at this point in my life. Because I had narrowed my priorities, I was able to focus on those things that mattered most. I kept the list of priorities handy because I planned to move one goal up the list as I completed one in the top four. I still wanted to accomplish everything, I was just taking my time with them all.

# 2 – I expected challenges to arise

Walking into this, I didn’t think it would be easy. I expected that there would be months where money would be short and I would have to find someway to make it up, or I would have to prioritize my top four further so that I knew which ones I’d contribute to if I found them competing with each other.

So, I sat and really thought about what I wanted to accomplish the most. I then took my four top goals and prioritized them as follows:

1. emergency fund
2. retirement accounts
3. credit card debt
4. moving out of parents house

In the event I couldn’t contribute to all four categories for the month, this was how I would contribute to each goal in order of importance to me at the time. Now, I know you Dave Ramsey enthusiasts are thinking I’m crazy for putting the emergency fund and retirement over the debt, but for me, they were simply more important. I did my best to contribute to all four, but the first two made me feel more financially secure so those were the most important to me.

# 3 – I wrote it down

This isn’t part of CNN Money’s lesson, this is just my own thought process. Personally, when I take the time to write something down – not type it out, write it down – I feel more committed to it. So, I wrote out my action plan on paper and I posted it on the wall by my bed. I literally read that thing four times a day and went to bed visualizing my success. I was giving my subconscious enough fuel to find ways around various roadblocks. This may not be your thing, but I found it very helpful and on the days when I felt like giving up, it kept me moving forward.

# 4 – I started right away

I didn’t give myself the opportunity to never get started on this. The night I sat down and wrote all of this out, I also decided that I would begin right then and there. There was no waiting until the beginning of the next week or the next month. I resolved to put it into motion and make it happen. I think delaying my actual start day would have given me plenty of time to give myself excuses why I couldn’t succeed. I’m generally pretty heavy with the negative self-talk, so I really have to work hard to avoid it. Once the resolve set in, I saw no reason not to begin right away.

# 5 – I didn’t sweat the small stuff

I didn’t completely cut the fun out of my budget. I was perfectly ok spending a little money here and there for DVDs or going out to the movies. I cut back on those things by comparison to what I was spending, but cutting them out completely would have given me maybe an extra $100. That was a $100 I was comfortable spending on myself to keep me motivated. Not the most frugal option, but I’ve never really been a frugalite.

# 6 – I revisited my goals and priorities every 6 months

You may think this is overkill, but I wanted to make sure that everything I was doing was in line with my goals. I found the sessions to be helpful because I would review my progress, or relapse, and determine what was successful for me and what wasn’t. The first six months was tough because I was trying to get rid of bad spending habits, but it got easier as I moved on. Plus, it was a form of accountability. I didn’t have someone else holding me accountable, so this was an effective method for me.

Wanna discuss it beyond the comments? Head over to The Open Thread!

Related posts:

1. How I Got Out of Debt: Part II
2. How I Got Out of Debt: Part III
3. 6 Lessons Learned From Being In Debt
4. Financial Maxims: In Your 40s
5. Stressed & Depressed? Don’t Let Debt Bring You Down