The other day I was chatting with some of you on Periscope (Which just happens to be my new Favorite Social Platform, so make sure you Follow Me Here) and we were talking about Becoming Debt Free and how we were able to accomplish that HUGE goal. I promised I would share my story and some of what I learned along the way and I thought I would share some of the Lessons I Learned during the process that have really changed how we approach just about everything in life from a Financial Standpoint.
When we got Married my husband had this CRAZY Goal to be completely debt free by the time he was 30. I was 22 and he was 24 at the time we were both working and we didn’t have any kids or many responsibilities so it seemed like a good idea at the time. Then, as I’m sure most of you know LIFE HAPPENED we got pregnant just 7 months after we got married and I quit my job to stay at home with my baby boy so we went from 2 incomes to 1. At the same time the 2007-2008 Financial Crisis happened, our home lost a lot of value and we lost a substantial amount of money in the stock market. The price of everything was going up and out budget was getting tighter and tighter as the months went on. If you have read my story you know that is the time when I started using coupons and I was determined to make our budget work even when it felt tight and there wasn’t much wiggle room.
When life gets crazy it’s easy to loose sight of your dreams and goals, and for us it really took a lot of intentional decisions to be able to start paying off our home and work towards that goal of becoming debt free. Along that process, there were a few “Realizations” that I had that I really want to share with you because I hope they can help you and be an encouragement to you no matter what stage of the financial process your in.
5 Things I Learned from Becoming Debt Free:
1 – Dreams don’t accomplish anything on their own
We spent a year or two with a “Dream” of being debt free without actually doing anything about it. It was something we had kinda always talked about, but because we didn’t have a plan we didn’t know where we were going or how we were going to get there. I still remember taking that first step to make a budget that would allow us to pay extra on our house, or maybe for you it’s making a budget so you stop overspending. No matter what stage of life your in and what your financial goals are take the first step of moving your dreams into goals and plans.
If you need help setting up a budget, Read this Series on How to Make a Budget Work for you
2 – The More Money You Have the Easier it is to Spend
This is something I have learned over and over again and I think I’m probably still learning, but the more money you have the easier it is to spend. When we were living on a super strict budget with not much wiggle room we were very careful to look and see how much was in each account before making a purchase, we tracked everything closely and updated our budget almost daily to make sure we weren’t going over budget. However as my husband made more money or the blog started bringing in a little here and there we started to loose that dedication and it was way easier to make purchases without thinking them through first.
I think this comes a lot from the relief of feeling like you can breath again, it’s so important that as you earn more money, or pay down some of your debt you don’t loose sight of you goals and you are intentional about sticking to the budgets you have set, remember those budgets are there for a reason because you have goals that are important to you and are defining the budget. For me it was often about paying more for convenience so it wasn’t always a necessary purchase and I have to really keep myself in this aspect because it’s easy to overspend when you think you can afford something and you might not always be making the wisest choice for you money at the time.
3 – You Have to Say No to Somethings to Say Yes to Something Else
I can’t tell you how many times I said to my sister “I can’t do that right now, we are trying to pay off our house” and sometimes that was for little things like buying an extra shirt, or going out to eat for lunch, or doing something that seemed small, but I realized more than ever those $20-$30 purchases were eating up our budget fast. Having goals helps you make these decisions. For me it was a very intentional, every day statement that made me remember why I couldn’t do something. I was saying No to something that wasn’t necessary in order to say Yes to something in the future, a dream that I wanted to see become a reality.
4 – Keep Your Goals In Front of You
During this time in our life my husband and I would look at our finances regularly, we were able to see the effects of our savings as we got closer and closer to our goals. I’ll be the first to admit that the first few months (and years even) felt long and hard, in the beginning it’s always slower. Simliar to the snowball method for paying off debt as you start to pay down debt, that frees up resources to pay off more, so it really does start to build which is exciting to see. In the end I think we were more focused because it felt like we could see the end or the light at the end of the tunnel and we began to throw every little bit we could at our mortgage because we could see the finish line.
For us the first step was paying down extra on our house each month (Even if it wasn’t much), Then we reduced our mortgage to a 15 year from a 30 year because interest rates were low at the time. Next we set up a plan where we were paying the 15 year mortgage and we had set dates to make “Goal Payments” Where we wanted to pay an extra amount on our house. We didn’t always make those goal payments in full, sometimes we were short, other times ahead depending on how life went but it was a goal and without those goals and deadlines that we set for ourselves I don’t think we would have ever accomplished paying off our house in such a short amount of time.
5 – Hustle with a Purpose
It doesn’t matter if you are paying off credit card loans or your house it can often feel like there’s no “Extra” Money and one of the best ways you can gain traction is by looking for ways to reduce your spending or increase your earnings. Either one will help provide the wiggle room you need to start living on a budget and paying down debt. We worked both ends of this spectrum, we worked hard to eliminate expenses we didn’t need and we worked countless late nights and early mornings on projects and jobs that were increasing our income. I wouldn’t trade those countless early morning and late night hours for anything, they were what really got us where we wanted to be and allowed us to see our dreams become a reality.
If you are looking for ways you can earn additional income, I have a great post on 12 ways to Make Money at Home, these are just the beginning but they are a great starting point. Find what you love and see how you can market that to those around you, weather it’s selling something you make on Etsy, using your organizing abilities to organize other’s homes, writing a blog or selling one of your favorite products the internet makes it possible for so many of us to earn extra money from home in ways that will truly fit into your lifestyle.
If you are looking for help getting on a budget and understanding the process of creating a budget you can actually stick to then make sure you check out our series on How to Make a Budget work for you!