I started getting into the debt-free community a couple months ago. I knew absolutely nothing and like most others I had the mentality that debt is just going to be a part of my life. Inherently I’m an impulse buyer. Anything that is on sale or would serve even the tiniest purpose in my life I would buy. I go into stores and purposely try to find things to buy because my brain gets excitement from that. Growing up I learned to find things on sale and to stock up on items that are cheap even if they might not serve a purpose. Now that I have been doing research about budgeting and paying off debts I’ve noticed myself changing my habits and thoughts. Mind you, this is no easy task. I still have the inclination to overbuy/overspend and I still have the mentality that I should be stocking up on things that I don’t need. I’m working on pushing those thoughts out of my head when I go shopping.
When I first started budgeting I would feel disappointed by the restrictions on our shopping; I would think that if only we could spend more then I would be happier. I’m noticing now that I get that same excitement from saving our money and being mindful about our purchases. Having a reign on our money makes me feel a few things: 1. Less stressed about paying off bills because I know I will have enough money, 2. I feel hopeful because I know we can budget and save for things like vacations, and 3. Less guilt about spending money because I’m aware of where all my money is going to. Something that used to give me the most anxiety was opening up my banking app to see my account balance. I’ve gotten to the point where I check it a few times per week and I get excited on payday to allocate money to my bills/debts.
My debt payoff system and savings system is not perfect and not near where I want it to be yet, but everyday I’m working on it and figuring out how I want it to be. This change doesn’t have to be overnight (like I initially wanted it to be). We live in a consumer society where money and buying things are everything. It takes a lot of time and concentrated effort to train your brain not to think in that way. In my journey, changing my thoughts and behaviors came first. Now I’ll work on my plan and systems. If you have anything that works I’d love to hear your thoughts!
This is the first time in my life that I actually sat down and came up with a physical budget. It makes a lot of sense that I’ve never been good at saving money. Like many others, I have a hard time curbing impulsive buying. I come from the mindset of “if something is on sale then buy it,” or “I might need this in the future so I should get it just in case.” This is exactly the kind of thinking that makes it difficult for people to save their money and pay off their debts. Back in the fall when I hadn’t started paying off any of my debt yet, I still felt as if I didn’t have extra money. This is because I was overspending on things that I didn’t need or appreciate. Now I have even less money to work with, due to starting to pay on student loans and medical bills but I’m managing to save.
One of the biggest changes Bea and I have been making is planning out meals for the week and sticking to a carefully constructed grocery list. We do our shopping on the weekends and before we go, we briefly inventory our cupboards and fridge. Based on this we devise a meal plan for the week. We only buy the things that we need to make those meals that we don’t already have. We also exclusively shop at Aldi for groceries and leave places like Walmart for toiletries or other miscellaneous things. We went from spending a combined $120 per week at Walmart to about $60-70 at Aldi. That’s a huge difference! Imagine what we could have spent that money on before! The point of this story is to determine where your spending is out of hand and focus on amending that first. You can live under your means, it’s just a matter of figuring out what you’re willing to cut out. This is my biggest recommendation if you want to save and/or pay off debt.
I started using cash envelopes for gas and groceries. What this means, is that every week I take exactly the money I’ve budgeted for both things out of the bank and put that cash into marked envelopes. I only use this cash for those expenses so that I can physically see where my money is going. This helps me to be more conscious about overspending. I’m working up to creating envelopes for “the cats,” “bowling,”(which we are now doing 2x a month) and “fun.” It’s always a good idea to budget for fun things, that way you don’t feel bad about spending that money and you reduce the risk of overspending.
Anyway, I had a really difficult time coming up with my May budget, which I’ve had to revise because of new payments. It’s difficult to keep track of everything that you owe and I don’t have a good system of planning out when everything is due as things tend to vary. So here is my budget after the most recent revision. I’ve also received some unexpected money so I’ve managed to pay off two medical debts! Yay!
Listing the budgeted amount versus the actual amount spent is important in knowing whether or not you need to adjust your budget or a good way of keeping track of extra money to put toward debts/saving. This is what I’ve been up to lately as far as budgeting and money stuff. Next month Bea and I are going on a trip so I’ll be writing about our budget for that and our process of paying things off!
I recently stumbled upon the debt-free journey community on Instagram and I’ve been inspired to start taking debt and money seriously. Throughout college I really wasn’t thinking ahead to the loans that I would have to pay off and had really poor budgeting skills. I’m just now starting to take this seriously. A few months ago Bea and I opened a joint savings account and I recently signed up to have money from my checks sent to my 401K. I always had the thought that I would be in debt for life and chose to think of it as part of my life. Seeing other posts about people living debt-free has really motivated me to start crunching the numbers and figuring out ways to pay off the $119,328.04 that I have in debt right now.
The first step for me in this process was actually sitting down and writing all of this out. I had some estimate of what it might look like though this was a little more than I expected. From what I’ve learned there are several ways of trying to pay of debt including the debt-snowball (start by paying off your smallest balance and working towards the largest), the debt-avalanche (starting with your largest balance and working towards the smallest), or attacking the debt with the highest interest first. I’m still figuring out what I want to do/would be most feasible for me.
I started reading this book by Gail Vaz-Oxlade and I’ve been getting some good advice for how to approach this. She recommends the first couple of steps to be defining general goals that you have, looking at what your core values are, narrowing down goals for the next couple of years, ranking them by importance and then figuring out if they align with your values. It seems complicated but it’s actually pretty simple. Below are my notes that I wrote during a lunch break one day.
This is a great way to keep in mind what you’re working towards and what you would like to do with your time and money. I’m continuing to figure out my May Budget which I’ll be posting here and what tips/tricks work best for me. Highly recommend Gail’s book Debt-Free Forever: Taking Control of Your Money and Your Life as a great place to start figuring this stuff out. Of course I also have to mention Dave Ramsey as he has a highly followed system of money management called the 7 baby steps. I’m still deciding if that is something that I would like to follow but more on that later.