I started taking this journey seriously in Nov of 2016. I decided that in order to become debt free, I needed to lower my expenses and use my income to pay off my debt. This debt consisted of student loans and credit card. The total amount of debt at the time was about 35k, 30k in student loans and 5k in credit cards. I decided that moving in with my parents was a good financial decision, since this would allow me to use my full paycheck to put toward debt. I rented the townhouse and moved in and forward with this journey to having no debt. This decision was made just thinking about my finances and nothing else. The first four months of this journey were great! I paid off my credit card in full, paid about 10k in student loan debt.
Things were good…Until! I lost my motivation. The hour commute to work each way was starting to take a toll, the fact that it was an hour drive to have a social life was taking a toll, the lack of privacy or inability to have my own schedule was taking a toll. I started to loose track of my goal and started spending again. I wouldn’t have time to cook since I was coming home late, I was eating out twice a day, sometimes three times a day. I was also using my freshly paid credit card and not paying it back. My excuse was well I’m saving so Ill pay it later. Later never came and again I was at 4k in credit card debt. This was extremely frustrating!! Here I was six months in, still in debt and not happy with my living situation.
After I threw myself a pity party, I decided to stop messing around and accomplish my goal! I also decided that I needed to move out by the end of the year. With the decision being made, I was able to quickly pay off my credit card, and work toward paying another 10k of my student loan. Everything extra that I received was going towards debt. Tax refunds, real estate income, work bonuses. I didn’t meet my goal of being debt free, but I did learn a lot of lessons.
Lesson #1: Make decisions not only thinking about finances but also the emotional effects the decisions can cause.
This was a good lesson to learn early on. It’s not only about becoming debt free (money), but also about being happy and enjoying the journey. If you cut everything that you enjoy out, you are probably going to loose motivation very quickly and quit. There needs to be a balance. Find what you can live without and what you can’t. This will allow you to save but also enjoy the journey.
Lesson #2: Have an accountability buddy.
I have a friend that is going through her own debt free journey. We kick each others butt when we are loosing track of the goal. This helps when you loose motivation. They are there for you and you are there for them. It helps to hear each others success and failures. Last year combined we paid in total debt about 60k!! Things are better when you work together toward the same goal. We are still motivating each other and pushing ourselves to reach our goals.
Lesson #3: The only way to see results is to Budget and stick to it.
This is something that I am still learning. Budgeting doesn’t come very natural to me. I am the type of person that mostly just spends without thinking. Thankfully I am not into shopping or electronics. My vice is going out to eat and drinks. I am working on getting better at this especially on the weekends. I am working on sticking to my entertainment budget and not going over it like I usually do. Budgeting is good because it helps achieve your goals. This is like a road map you create to get yourself out of debt. This helps you see what’s coming in and what’s going out. This helps you stay organized and motivated. The more you stick to your budget, the more motivated you are and the faster you reach your goals.
Overall I still have a long journey ahead, and learning this lessons are a good start to launch me to success. Never give up and loose track of the main goal. I will continue to work hard to reach my goal. I am sure there is a million more lessons to come and obstacles to overcome. With a good plan, a good budget and a lot of motivation anything can be overcome.
