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How You Can Win with Money and Learn From Our Mistakes on Our Debt Free Journey

Updated: Dec 9, 2019

January 2019 marks month 4 into our debt free journey. In this brief amount of time we've learned to scale back our lifestyle, the beauty of delayed gratification, sacrifice for the sake of longterm goals, awareness, intentionality, not to mention more money in savings + towards debt. You can learn more about our story here, but wanted to focus this post on a closer look at our current debt + a list of learnings to win with your money.

As I shared previously, we have a heloc (home equity loan) of roughly $80k on our home. It started as a means to renovate our kitchen, bathroom + fireplace, with the intent to cap off the total at $40k. Encounter the slippery debt slope. What started as an original $40k loan grew to $80k. Sickening right? Incredibly humbling to share + come to terms with this figure. Where did we get into trouble? How did that number grow to twice the original amount seemingly overnight? Well I will tell you in hopes that you avoid the mistakes we made along the way. All the little things add up: a major yard project + maintenance, budgeting for trips and then waaay overspending while on vacation only to worry about later, "purchasing" a boat, double spending in the form of taking out monthly cash expenditures combined with swiping the credit card, shopping, endless Amazon prime purchases, eating out too much, etc. Does this begin to paint a picture of how enticing + easy it is to a) swipe + figure it out later, and b) fail with money when you don't have a plan? Although we've had a budget for years, we struggled to execute the plan. In theory our efforts to save, give, pay bills were being met, but all the overspending meant little savings and a large debt to show for it. What finally clicked for me was recognizing my influence, power + ability to impact our finances, whether positively or negatively. After stumbling upon budget mama guru, Sami Womack of A Sunny Side Up Life (they paid off a mind boggling $490k in 4 years!) and listening to this episode on her podcast; I finally got mad with the debt + decided to change our trajectory.

Here's a list of learnings to win with your money:

  • make a zero-based budget + stick with it!

  • save $1,000 emergency fund

  • list your debts smallest to greatest, pay off the smallest first + work your way to the largest

  • sit down each month + write out a monthly budget

  • if you use the cash envelope system, separate each category + breakdown by the week (ex: instead of putting the groceries fund into one lump sum, separate weekly - food week 1, food week 2, etc.)

  • once you pay off all your debt (excluding mortgage) save towards 3-6 mo living expenses

  • communicate - this may seem obvious, but it's so important to be unified + on the same page

  • don't take out a heloc, just don't borrow money in general (yes, even if it's zero interest) end of story

  • stick with it, even if you blew the budget the first month, adjust as necessary + give it at least 3 months to find your rhythm

  • if you don't have the money, don't buy it (ha, what a concept! I wish we learned this earlier)

  • figure out all the areas you can cut or scale back in your life to create wiggle room in your budget to put towards debt/savings (remember this is temporary) - dining out, coffee, cable, expensive phone plans, transportation/ride share, etc. I wrote a separate post here about ways to save

  • stop comparing, live your own life, not someone else's, at the end of the day you are responsible for your bills/debt/money in the bank, instead practice contentment + gratitude

  • celebrate the small wins - Michael and I sometimes do a before + after comparison spending exercise (ex: on a road trip to Portland we calculated how much we saved by bringing our dinner, avoiding pit stops for coffee/snacks, purchasing groceries vs. eating out, etc.)

  • use cash whenever possible vs. debit card - I know they're both money, but there's something painful about spending physical cash

  • make the decision + commitment to change your lifestyle

  • accountability is key whether that's to your spouse, a mentor, family member or friend

  • remember your longterm goals - the small purchases add up (think: would you rather spend $4 on coffee 3x/week over the course of a month, or have $46 at the end of the month to put toward savings/debt?)

  • get really clear on needs vs. wants

  • practice delayed spending - sleep on purchases over $20, ask if it's a need vs. a want, even for smaller purchases I get creative to see if I have something similar that I can use to serve the same purpose or if I truly need the item + try to live without it for a certain period

  • give - this may seem counterintuitive, but Michael + I have never stopped giving through our journey. We believe that everything we have belongs to God. If you can't be generous in the small things, it will be that much more difficult in the big things.

There you have it friends. If we could redo our journey we would save cash for home renovations, put down the credit card + live way below our means. I know we have a long journey ahead + so much more to learn. We were at a Y in the road and I'm encouraged that our story is changing #slowlybutsurely. Don't make the same mistakes we did. I hope you can learn from our story + win with your money!

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