When I look back on this year, I can’t believe how far I’ve come. As cheesy and cliche as that may sound, it’s truly been a transformative year..and it all started with my relationship with money.
Money, Money, and Less Money.
In January of 2019, I was broke. And I mean b-r-o-k-e. I was up to my eyeballs in credit-card debt, student loans, and was the lucky owner of a new home mortgage. Not only that, but my spending habits were less than desirable. I didn’t think that I was bad with money, growing up I had always been responsible; I saved like crazy as a kid, I paid for everything I needed in college, and I bought my own first car. Then real-life adulthood struck me, and things got stressful. I stopped cooking and started eating out for “ease”, buying $4 coffee on the reg, and indulged in late-night Amazon stress shopping. Haven’t we all?
When my credit cards started sending me alerts that I was almost maxed out, I had an ugly wake up call. Not only that, but I was borrowing money left and right from people, only to keep myself afloat. I knew I had to take a deep look at how I was spending and living and reevaluate everything. One morning, I sat down and combed through it all…three times in a row. I wrote down every cent I made in a month and made a list of every bill and expense I had, including my indulgences. I printed out my bank statements, highlighting my unnecessary costs. I knew if I saw it visually it would help me. It just so happened, I was spending roughly $500 more than I made a month…no wonder I was in debt! I did a lot of research on debt-free solutions and was inspired by so many other bloggers who were on debt-free journeys. I knew I had a long way to go, but I wasn’t willing to shy away from the mountain I had to climb.
Where I started.
I won’t disclose all of the numbers, but I will tell you what my main goals were. When I started this debt-free journey in January I had a few goals in mind and a few rules:
- Stop the use of credit cards. I stopped using my credit cards immediately, and instead only used my debit card. This ensured that I was only spending money I actually had. The one exception here, I used my card for gas because of the perks, however, I paid it off immediately. I never held a balance on my credit card the entire year.
- No spend month(s)! I did a no-spend January to kickstart the journey, which I kept up for 45 days and saved over $300. I also did a no-spend Month again in May and November. I found doing these kept me in check!
- Cut the fat: I stopped buying coffee out, we only ate out 2x a month (instead of 10+) and I didn’t buy new clothes or home decor (more on this next)
- If I wanted something new, I had to find it on sale, and I had to sell something I already owned. Not only did this keep my home less cluttered, but it made me responsible for my spending on unneeded items. I sold clothes if I wanted new ones and old furniture if I wanted new decor. This also helped me only buy items that I loved and truly wanted.
- Bye-bye vacation! Between 2017 and 2018, In the span of 12 months, I had gone on 6 pretty lavish vacations, none of which I actually had the money for. I was in the #yolo mindset …which would’ve been fine if I had done it financially responsibly. All of those vacations were paid for with a nice thick credit card. YIKES. This year, Brian and I didn’t vacation at all, by choice. We instead took day trips to the beach, visited family, and explored our own city. It forced me to be creative and to love the beautiful state I live in. And it saved me thousands of dollars!
Goals & How I Achieved Them
I started 2019 with over $8,000 in credit card debt. This included two different cards and some medical bills. I have school loans and a car loan but I decided my credit cards were the most important to pay off and focus on first. I decided to get a very low interest (1/4th of the interest on the credit cards themselves) personal loan and pay off the medical bills and credit cards. I closed out one credit card account, the newest one, and left the oldest one open so my age of credit wouldn’t be too hurt. [please note I am not a credit expert by any means, and this is merely how I did it. Please do your own research too]
My personal loan was a nice even amount, all lumped into one. This automatically made me feel better – I could track payments and see it all right there in one system. It’s kind of like debt-consolidation but on a smaller scale.
So how is it going..paying this mountain down?
I am not kidding when I say, every last cent I had available after my bills were paid and food was bought went to my consolidated debt loan. I didn’t just make the monthly payment and forget about it – I made the monthly payment and then at the end of the month if I had any money left over, it went straight into it the loan. I opened this loan in February of 2019, and it’s now December. I can happily say I have paid 75% of it and will be credit-card debt-free by April of 2020!!!
Size Makes No Difference
It might not seem impressive…so I paid $6,000 off in 11 months. Even to me, it seems frustrating, but I have to remember where I started. At the beginning of the year, I had no grasp on my money and no respect for my financial future. I was spending more than I made, I was using my cards for everything, and just getting new ones once they filled up..and I broke free of that horrible lifestyle. I am not longer a slave to my debt. I am slowly but confidently digging my way out of the hole I put myself in, and have learned so many new tactics and tools to stay this way.
What’s The Future Hold?
After I pay off this credit card loan, I will focus on the next smallest loan (I’m loosely following Dave Ramsey’s debt philosophies) which is my car loan. I will keep doing this until I owe nothing. It will take years, but by my 30th birthday, I believe I will be debt-free completely, and I think that is a BEAUTIFUL thing to strive for.
Brian and I want to RV around the country, but we are not doing it until we have paid down our debts to at least 50%..so the motivation here is huge!