Give Yourself a 40% Pay Raise

Give Yourself a 40% Pay Raise

You don’t have to rely on your boss to improve your financial life. Instead, give your self a 40% pay raise. How? Pay off your debt.

Sadly, when you look at how much you spend on credit cards, loans and mortgage payments, it eats up a huge portion of your budget. Look at your income and then subtract just your debt payments. Now imagine if you had that much more money each month. For most of us, it would be equivalent to receiving a 40% pay raise.

So how do you do it? How do you pay off all that debt? We recommend a 10-step process. The first 7 steps are all about eliminating debt and the last three steps are about accelerating your wealth accumulation – so you can use that money for good!

Eliminate Debt to Give Yourself a Pay Raise

We know that personal finance is personal, so we recommend going with either an aggressive or a moderate approach to eliminate debt and give yourself a pay raise.


Some people want to go all-out and just get it done. You know who you are. You are the one who won’t stop for a bathroom break on a road trip 🙂 Once you get going you just need to get there. Some of our students can’t keep up the pace of the aggressive approach and so they give up. We don’t want anyone giving up out of frustration, so we also offer the moderate approach.


If you enjoy stopping along the way and maybe seeing a few more sights on your way to the destination, then this is probably your approach. It allows you to get to where you are going in a relatively quick time period. It will take a bit longer than the aggressive approach, but it allows you to enjoy the journey a bit more.

The Ten Step Process to
Eliminating Debt & Building Wealth
Aggressive Moderate
Step 1 – Put money into a bank savings account One month rent or mortgage $1,000
Step 2 – Keep cash on hand (at home) $500 $100
Step 3 – Set up your spending plan Envelope system (can be digital) Track spending
Step 4 – Get squared away with your creditors Negotiate rates and transfer balances Make sure you are caught up on payments
Step 5 – Pay off your consumer debt Pay in correct order and add to next debt Pay in correct order and add 50% to next debt
Step 6 – Pay off federal student loans Pay them off! Pay them off!
Step 7 – Pay off Your Mortgage Continue extra payments, rounding up, etc. Continue looking for 50% of all extra income sources

Life Happens

I will guarantee you that while you try to get out of debt during this program, or at any time, life will happen to you. Refrigerators stop working, washing machines wear down, cars breakdown, etc. The key is to have a plan in place to handle these scenarios because they will happen! On the bright side, once you get through one of these emergencies without getting deeper into debt or without ruining your finances, your confidence will increase and you will be that much more determined to get out of debt.

Do you know what else happens? Birthdays, Christmas, and anniversaries all take place every year. Cars will need oil changes, and 30,000 mile check ups. Homeowner’s Association dues, Tax Preparer fees, car insurance (if you pay every 6 months), and other non-monthly expenses will slap you across the face if you are not prepared. All of these expenses are predictable, yet we do not prepare for them, and thus we create a crisis for ourselves… ones that are easily preventable.

So be prepared! We will take you through the steps you need in order to first position yourself to pay off your debt and then to begin the process. There is no point in setting you up to fail. We want you to exceed. It will be better for you and better for us. We want you telling other people how great this system is and why they need it!

Turn Your Debt into Dollars

Step #1 – Emergency Fund

To get you started on your journey let’s talk about how important Step #1 really is. See, many people skip this step and try to go straight for paying down debt. I get it… you want to see a quick victory right away. But if you build the walls before pouring the concrete footer or foundation, the house won’t stand for long.

Your first step is to put some money in the bank. Like we said, life happens. And since we know life happens then it is important to prepare. If you don’t put money in the bank then you will start paying down debt, and next thing you know an emergency takes pace, you have to put it on your credit card, then you get frustrated and see no point and so you quit trying and you stay in debt.

How much should you have in the bank? It depends. If you want to be aggressive then you need at least one months’ rent or mortgage payment. This way you can rest assured that if anything happened to your paycheck, such as a mess up at your work where the check doesn’t come through, you wouldn’t miss a payment. If you want to take the moderate approach, then you want about $500 to $1,000 depending on your income (the more money you earn, the closer you should be to the full $1,000).

This article is adapted from the e-workbook Turn Your Debt into Dollars – A complete system to help you improve your credit score, pay off your debt and upgrade your life. Following this system, using our DebtorADE™ approach will help you achieve the financial success you are looking for.

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Bill Pratt

Bill is an Assistant Professor of Business at Piedmont Virginia Community College. He speaks on topics related to personal finance on college campuses across the country and is the author of multiple books on personal finance. He left the financial industry to focus on helping people become personally and financially successful. He lives in Charlottesville, VA with his wife and their three pets.

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