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In this video, one woman describes the financial rules and tips that helped lower her costs and create a budget that let her get (and stay) out of debt.

This video is sponsored by American Home Shield. To find the best plan for your home, visit

Video by Grace Lee

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Making It Work is sponsored by our friends at American Home Shield.

Learn more about the budget protection and benefits of a home service plan at When it comes to money, my story is the same as most Americans.

I got into credit card debt in my 20s because I simply didn't keep track of where my money was going. And then I got into the vicious cycle of spending to keep up with the people around me not paying attention to how much I was swiping, getting to the end of the month and thinking, oh well, I'll just do better next month, and then repeating the same process again and again. My wake-up call came when I looked at my continually accruing credit card statement and realized I was nearing five figures of debt.

Getting out of it took some time and patience, but I going through the process put me in a better position in the long run. Here are the financial golden rules that finally helped me become debt free. Rule number one, learn how to use credit cards strategically.

In order to make my debt payoff more manageable, I opened up a balance transfer credit card and transferred my remaining balance to it. Meaning I had about 15 months to pay off the total without accruing more interest. Of course, in order to pay it all off during that time, I had to be super diligent about making each monthly payment.

And during this time I didn't use any of my credit cards regularly because I didn't want to risk spending money I didn't have and accrue even more debt. But I did learn that credit cards are fine to utilize when you pay them off in full and on time. And I'm glad I got this period of solid payment history to boost my credit score.

Rule number two, always budget for a backup plan. It may seem counterintuitive to budget for savings while trying to pay off debt, but not having a financial backup plan is what got me into debt in the first place. Growing my emergency fund and getting other backup plans in place meant that I didn't have to worry about getting deeper into credit card debt when something unexpected happened.

And if you're a homeowner, one of the best ways to protect your budget is to invest in a home warranty also known as a Home Service Plan. It can help cover the cost to repair or replace the appliances and systems you rely on every day, like your heating, A/C, electrical wiring, washer, dryer, dishwasher, and more. That's why we found American Home Shield plans to be a budget-friendly solution that gives you the home warranty coverage needed to protect yourself from unexpected pricey home repairs.

And getting coverage from AHS is simple. After you select the plan that's right for you, you'll pay a fixed monthly amount that you can easily fit into your budget. Then, when the time comes, whether you're concerned about the normal wear and tear of your systems or experiencing a complete breakdown, all you need to do is file a claim for the repair.

If your claim is covered, your warranty could potentially save you thousands of repair costs. And if they can't repair your covered item, they'll replace it. And, in addition to protecting your budget and helping you prepare and plan for unexpected home expenses, a home warranty with American Home Shield could save you time searching for a trustworthy technician.

They have more than 50 years of experience, have serviced more than 70 million requests, and have an extensive network of independent and qualified contractors. They know what they're doing. You can also customize your warranty plan by adding coverage for things like personal electronics, pool, spas, and more.

American Home Shield has paid more than $2 billion in home warranty claims in the last five years, more than any other home warranty company. And their plans start at just $40 a month. Rule number three, automate "un-fun" payments.

To ensure I never missed a month of payments on my balance transfer card or got tempted to pay a lower amount one month, I automated these payments to take place the same day my paycheck was direct deposited. I also didn't include my credit card debt payments in the discretionary section of my budget. They were categorized as a necessity.

So I stopped thinking about these payments as optional. Rule number four, always spend less than you earn. This is one of the toughest things for me to internalize because spending more than I actually had was what got me in credit card debt in the first place.

The first, and most effective, thing I did to stop overspending was cut back on the number of times I was going out to eat or ordering takeout each week. I found I'd easily been resorting to food out for over half my meals, which wasn't going to be sustainable if I now needed to stick to a budget. I also put a pause on buying anything online.

I've always found that it's much easier to impulse-buy something when it's not physically in front of me. And, while convenient, online shopping can make spending money way too accessible, especially for people like me who are trying to get their spending under control. I deleted all my saved credit card information from all my devices and mass unsubscribed from store emails so I wouldn't be quite so tempted to spend online.

I also activated my phone's timer for my Instagram app limiting me to just 30 minutes of scrolling a day and exposing me to way fewer opportunities to be fed ads for things tailored to my search history. Rule number five, track every dollar. Of course, I didn't just cut out all fun spending.

I still wanted to live my life. But in order to stick to my new budget, I had to be realistic about how much I could actually spend in each category. I used a simple spreadsheet to track all of my spending, which I would update every few days.

This way I always knew where I stood with my budget and roughly what I could afford to spend each day. If I could do everything all over again, of course, I would try harder to not get into credit card debt in the first place. But I'm grateful this experience allowed me to finally develop the solid financial habits I knew I was missing.

It also made me more confident about reaching even bigger money goals in the future. Before this, I never really dreamed about things like saving for retirement. But now it doesn't seem so far fetched.