January 1, 2018
Last week during my Instagram live chat, I got a few questions on what we’re doing to become debt free. I posted about it once and it seems to have caught a lot of attention and curiosity so I figured a blog post was in order! There’s no true secret to becoming debt free, I just think educating ourselves, doing a little research and really focusing on your spending habits is where to start. In this blog, I’ll share how we started and I hope it gives you some inspiration to start, too. It doesn’t have to be overwhelming!!
First, I started with the book The Total Money Makeover by Dave Ramsey. This book was gifted to us around 6 or 7 years ago when we were dating and Kyle’s parents knew we were ‘serious’. They wanted a debt free life for us and to educate us on finances. Truthfully, we were too young and dumb to care, so it sat on a shelf collecting dust for all these years. Even now, I still haven’t opened it. I’m more of an audio books kind of girl, so I bought the audio version on my Audible app. I love to listen to books on my way to and from taking Aubree to school and on my way to and from shooting sessions. It beats listening to the radio all the time! SO, I listened to this book in TWO DAYS! It was so good and Dave’s voice is so stern, it made me really want to hop on the train immediately.
Basically, in the shortest way of putting it, the book teaches you the snowball method to paying down debt. Any ‘left over money’ at the end of every month goes towards your smallest debt. You keep doing this until your smallest debt is paid off. And then you take what you were paying on that debt, PLUS any left over money and put that on your second debt, so on and so forth. It’s not a quick thing, but once momentum is built, you’re onto something good!
Secondly, the book doesn’t suggest this enough but I think it should… GO THROUGH YOUR BANK ACCOUNT! The book says to pay off things by finding left over money every month. My first thought was “there ISN’T any left over money every month!” So I knew going through our bank account and really studying our spending would help to find some. I chose to go through 3 months worth. I knew where our pang points would be, so I knew what to look out for: my shopping habit and my husbands habit of eating out at lunch every day with the guys from work. This took me hours to do, but I knew it was important. I tallied up my shopping and my husbands lunch time spending and what do you know…hundreds, literally HUNDREDS of dollars were being spent every month that was frivolous and just plain stupid. I felt a pit in my stomach and was really embarrassed that we could do such a thing. Especially with two children to provide for!
We made a pact: I don’t shop without talking to Kyle first about the things we NEED (thus, no random outfit buying for myself and when the kids need clothes or shoes, we chat about it first so we can both agree whats being spent is a necessity and not just a want). We also agreed that Kyle will pack his lunch every day instead of going out to lunch. Fun fact, he was averaging $317 a month on eating lunch out every day. I don’t know about you but thats a HUGE amount to me! HUGE! If we could consistently save $300/mo and put that down on our smallest debt, we could gain a really quick momentum! Not to mention the money we’re saving now from me putting a stop to my mindless shopping. Instagram boutiques were killin’ me ya’ll. The feeling of “oh my gosh I NEED that” when just scrolling was unhealthy. So I unfollowed a lot of those boutiques that made me feel that way. And now they cant get me anymore!
Along with studying our account came other realizations about our spending:
$93/mo was going to our YMCA membership. A membership I only used during the summer months to take Aubree to the pool. I never once worked out at the Y. Kyle did a bunch but he also has a gym he can use for free on base, so we cancelled our gym membership and boom, an extra $93 went back into our pockets every month.
I also noticed we were paying an astronomical amount for internet and DirecTV. We live in the country and cable/coax isn’t an option out here and the two options we do have for TV (DirecTV and Dish) KNOW they’re the only options, so they charge an arm and a leg. $100 for internet and $150 for TV. We know we can’t live without internet, so we decided to purchase HULU for $8/mo (plus we already have Netflix) to see if we could live on JUST Netflix and HULU for a whole month. Once we realized we COULD, we cancelled our DirecTV and boom, an extra $150 went back into our pockets every month. Now we’re only paying $10/mo for Netflix and $8/mo for HULU!
I also changed the way I grocery shop in a major way but I think I’m going to save that for another blog post if anyone is interested?! :)
When the book tells you to pay off debts slowly with extra money in your pocket and your first reaction, very much like mine is THERE IS NO MONEY LEFT OVER, go through your account! Line for line, for at least 3 months. Study your spending habits. Make some adjustments. It wont be easy, but it’ll be worth it. There’s things we miss about having television, shows we miss, etc. I know I’ll miss taking Aubree and Finn to the Y pool this summer, but nothing will be sweeter than being debt free. Nothing will be more freeing than living comfortably! We owe it to ourselves and to our children who deserve college educations.
There are other important parts of the book like saving for college for your kids… really important information about paying off your mortgage even. I can’t possibly share it all, but Dave Ramsey can! Start with his book and by going through your accounts. If you ever have questions, I’m here and will help as much as I can! :) Comment below with any questions or encouragement you may have!!
Health and happiness always,
ps: join me on instagram live on Wednesdays at 8pm for chats on motherhood @jamithompsonphoto
Photo courtesy of Shawna Bielat Photography