Today we are excited to have our first guest post from the amazing Kassandra from More Than Just Money. Take it away Kassandra!
Are you fed up with being in debt? I know how that feels, but it took me a long time to do something about it.
I spent most of my twenties and early thirties accumulating all kinds of debts. From credit cards, lines of credits, and car lease payments to a business investment that turned into a disaster; I racked up $55K of debt.
The negative tendencies with money started when I was pretty young. My mom tried her best to encourage me to save for a rainy day, but I was much more interested in spending any money I could get. Once I started my first part-time job at the end of high school, the local malls saw me nearly every single payday. I could not spend money fast enough.
To make a long story short, it took me years to figure out that I was a spendaholic and that I was in serious financial trouble. One day in June 2009, I decided to write down the amounts I owed and I felt absolutely sick when I saw the total. I could no longer hide from it. I had physically felt the stress of living paycheck to paycheck through migraines and staring at that number, I then knew why.
To pour salt on the wound, I was working as a corporate credit analyst at the time and had extensive knowledge of the finance and credit industry.
How could I have messed up so badly when I knew so much about money?!
I began to brainstorm how I could fix the situation and how long would it take me. I decided to approach paying off debt with the same fervor as I had developed for the accumulation of crap.
I knew that paying $55K was going to be a real challenge. It was going to hurt in all sorts of ways. I confided to my mom, best friend, and my now husband about the situation. To their credit, they all rallied around me and supported every step I made toward debt freedom.
My initial calculations projected that I could be debt free in five years with just my full-time income. I stuck with that plan for a couple of months and then I discovered personal finance blogs and books. I learned so much by reading how others paid down their debt and I knew that I could pay off my own debt much sooner by doing a few things differently.
What I did to dump the debt:
- I gave up a condo rental that was costing me 50% of my take home pay.
- I lived as a roommate for a year.
- I worked a 25 hr/week part-time job for several months in addition to my full-time position.
- I used my talents and abilities as side hustles and earned more income.
- I took a knife to my budget and cut out frivolous spending. I found ways to reduce cell phone, car insurance, groceries, and other monthly expenses. Doing this allowed me to funnel over 50% of my take home pay toward debt payments.
- I used the debt snowball method.
- I learned to say no to outings that would cost too much and I encouraged my close friends to host our get-togethers at home or simply meet up for coffee.
- I came to terms with the how and why of my debt. I also learned who I was as a person, the person I wanted to be, and what really mattered to me. I began to live according to those values and my faith.
- I. Never. Gave. Up. Yes, I had a couple of months where I didn’t pay as much as I could. I also treated myself from time to time because there is such a thing as debt fatigue. But, I never lost my focus because I saw that my efforts were paying off big time.
Shy of 3 ½ years of doing everything I listed above, I became debt free on December 21, 2012. With the click of a mouse, the last payment was sent and I hugged my husband in celebration. I then made a vow to never put myself in debt again with the exception of a mortgage. So far, so good. Shopping is no longer the magnet that it once was for me. In fact I have adopted the concept of living with less things and knowing what is enough.
When it comes to paying off debt, you need to do what you feel is within reason. But, you should feel some discomfort during the process. This is not just about paying off your debt. It is also about acknowledging the underlying reasons that caused it and figuring out what you must implement in your life going forward so that you do not find yourself back in debt.
I want to encourage people who are working hard to pay their debt to please stay focused and not lose hope. You can do this!
Kassandra is a self-employed wife and step-mom striving to live life beyond what money can buy. She writes about a variety of topics and personal experiences that all intersect with money. You can interact with her directly on Twitter and at More Than Just Money.
