Three years ago, I started a journey to get debt-free. All of my adult life, I have had some sort of debt. It was the “normal” debt (credit cards, auto, mortgage). When I began my journey as a newly single lady, I knew I had to get more control. What I have found on this journey is that many of us seem to live just a little above our income. This puts us in a vicious circle of paying one thing, creating new debt, paying it down and on and on. When I met my dear husband, I found there is a better way to live. So for the past three years, not only have I been living below my income level — I have been dumping debt. I am now to the point I will be debt free in three months.
When I started the journey, the first thing I did was sit down and see exactly how much debt I had. I was shocked when I saw the real numbers. Although I had always knew about what my bills were, I really wasn’t doing much to get out of debt. Debt is normal and everyone has it, right??? The number scared me — I didn’t even have any mortgage debt and I was almost $40,000 in debt. A large part of this was my car which I had just purchased — brand new. I also had multiple credit cards I had used throughout my divorce. This turned out to be about $10,000. It was time to get serious.
The first big change I made is I started using cash for most purchases. What I found is I didn’t spend nearly as much money when I really saw what things cost. The other thing we do each month is put our budget in writing. As a part of this budget process, I notate the cash line items. I get paid twice a month, so I break our budget into two parts.
Before beginning my debt-free journey, I used to eat out every day. Most days, this was at a “sit-down” restaurant. I was averaging $15 a day for lunch. This is more than $300 a month — just for eating out at lunch. Once I realized this, I stopped doing this immediately. I still occasionally eat out, but it comes out of my “personal” budget. This is the same budget I use for hair care and any other pampering. I on purpose made this dollar amount as small as possible to make me think before I do. This extra money went directly to paying down the debt.
Groceries were another weak area for me and frankly my dear husband, who is more frugal by nature than I am. We both felt we were a little out of control on grocery spending, so we came up with a monthly dollar amount comfortable for both of us, but less than we were spending. I divided this number two and it is the amount of cash I withdraw each month for this category. For both of us, our grocery spending went way down because we had a finite amount of cash. Again this “extra” money goes toward debt.
As you all know, not every month is the same and there are some months where you know you are going to spend more. How we managed this is any cash leftover at the end of the month stays in the envelope. We then use the extra cash on months we have bigger grocery expenditures. In our case, we had a nice little amount built up as we went into the holidays. We also budgeted a little bit extra in December for all of the holiday gatherings and parties.
We do still use a card for gas purchases. There are a couple of reasons for this. First, when you go to get gas, it is so much easier to pay at the pump. The other reason is we really track our gas purchases and adjust our budget on a monthly basis. I have a very long commute to my full time job and it is important to stay on track.
Just by realizing what I was really spending and changing it to a cash mentality, I was able to add this “extra” money to my debt. As the months turn into Spring, I will talk more about how I dumped all my debt and got to where I am today. I hope you enjoy my journey.