Getting out of debt is hard work. It’s tedious, frustrating, and altogether a pain in the butt. On the other hand, paying off debt can be rewarding, exciting, and change your life. It’s inevitable that along your debt-payoff road you’re going to mess up. That’s okay. The most important part is that you’re determined to get back on track.
We messed up a lot when it came to paying off debt. I mean for the first few years, we constantly got off track, racked up more debt, and just didn’t have our priorities straight. It wasn’t until we found a reason why that we were both passionate about that we were able to pay off $20,000 in 7 months. Some of the mistakes we did make though, I hope you learn from so you can avoid them yourself!
Our priorities weren’t always focused on getting out of debt
There were times where we would fall off the debt payoff train and it would take a little while to jump back on it. It’s okay, life happens! We tried to not beat ourselves up over it and just started working towards it again.
Trent and I both love to spoil and surprise each other. For example, in the middle of our debt payoff plan, Trent was about 3 weeks from deploying. He had already bought Blink 182 tickets (his favorite band in the entire world), so I surprised him with meet-and-greet passes and to be able to spend an afternoon with the band! It was probably the best present I’ve ever come up with. You should’ve seen him jumping around and squealing like a little kid!
For me, that was worth it to stop focusing on debt. At the same time, if you’re seriously in debt and cannot afford to make up the payments to do stuff like that, don’t. You really need to take a step back and realize what you’re spending your money on and how you can change those habits.
Sometimes priorities have to change for a little while and that’s okay. We stopped spending money on all of our favorite things for a long time. Our priorities weren’t always focused on debt though. Usually, if I know something will make Trent happy, that trumps the debt-payoff focus. It’s hard to change that mentality, but if you ever want to see success, you need to make it happen.
We failed to differentiate wants from needs a lot of the time
This was a lot of, “I need some new gym shirts” to “a pizza sounds really good right now” five days in a row! This is something we will struggle with from time to time. I think most people do though, especially with such easy access right at our fingertips.
There are ways to help you differentiate the difference between a want and a need. Ask yourself, “if you buy this item, would it have an impact on your life in an important way?” If the answer is yes, then ask yourself, “what impact will this item have on my life? Do I have anything at home that already sufficiently meets that need?” If it would impact your life and you don’t have an item that meets that need already, then yes it’s a need. Any other answer means it’s a want. Almost everything in life is a want.
This doesn’t mean that the new iPhone is a need. You already currently have a phone that works well and meets your needs.
Sometimes you have to sacrifice the fancy stuff for a little while to be able to live the life you want in the long run.
We didn’t have an emergency fund
Ugh, this was a dumb mistake on our part. I knew the importance of having an emergency fund, just never bothered to do anything about it. My car needed new tires, brakes, and an alternator throughout the process of paying off debt. Do you know what we had to do? Charge it. If we would’ve had an emergency fund, we wouldn’t have had to worry about car problems. We would’ve had the money set aside already.
We didn’t stick to our budget
I had written out a budget and figured out where all of our money was going, we just didn’t stick to it. We never once missed a bill though! We just spent more every month than the extra income we had coming in. Part of that is because I would put too much money towards the credit card and leave us strapped.
We didn’t budget properly
When you make a budget, you should really make it a zero balance budget. Make sure every penny has a home. When I would make our budgets, I wrote out all of our bills and subtracted it from the total income. To me, that’s how much money we had left for the month. I didn’t put aside money for credit cards, I just used what was left of our income to pay it off. I thought that we could stick to my idea of spending, but that’s where I was wrong. It was MY idea, not OUR idea.
Another thing I didn’t realize is that you need to watch out for other things that aren’t bills, but still cost monthly. I forgot about extra food money, subscriptions, budgeting for gas, fun money, etc.
If you don’t give every penny a home, it’s going to be much more difficult to get your finances in control. That’s one of the biggest things I learned throughout this process.
We didn’t throw all of our extra money towards our debt
Sometimes if we had Christmas money or I made a chunk with my side hustles, we would use that towards something else instead of throwing it at our debt. Even when Trent got a raise, we should’ve, but didn’t, put that extra money towards our debt. This slowed down our debt-payoff a bit because we were using the extra few hundred dollars here or there to buy new clothes or go away for the weekend. That would lead to us charging even more and landing more in debt anyways.
The importance of putting all of your extra money towards your debt is because you’re used to living on your normal income now. If you get extra, well that’s a bonus that should be used to pay back any debts you have. I know it’d be nice to spend it on a nice weekend getaway, but unfortunately, those are out of the question for now!
Trust me, once you’re able to take your vacation, buy your new clothes, etc. debt free, it’ll be so much more rewarding and you’ll enjoy it more than you would if you were to charge it! We spent over two months traveling throughout 2018 and didn’t go a penny in debt because we already had our debts paid off AND saved so much more. Let me tell you, those were the most rewarding travels because I didn’t even have to check my bank account or worry about paying it off later. If we would’ve thrown our extra money towards our debts sooner, we probably would’ve been able to start our travels earlier.
If you throw all of your extra money brought in towards your debt, these goals are only going to be obtained more quickly. Extra money can be your tax returns, raises, birthday/Christmas/graduation money, side hustles, or anything else that isn’t part of your regular income.
We continued to use credit cards
I believe this is a common issue for a lot of people. It’s difficult though! You see that number and you want it gone really badly and quickly. Because of this, you throw as much money as you possibly can towards it. Then you realize a week later that you have to start using your credit card again because you’re already out of money.
It’s like riding a roller coaster. There’s excitement of seeing the total amount drop. Then the disappointment before the next pay period realizing we had charged it right back up. It was a never-ending cycle that caused a lot of stress and a couple fights.
What I recommend is to make yourself realize that paying off debt is a marathon event, not a sprint. You will not be able to snap your fingers and pay off your debts. It’s hard work and when you finally are out of debt, you’ll never want to go back into it because of the struggles you had while paying it off.
If you want to stop using your credit card, look at what you spend on a monthly basis, decide what you can stop spending so much on, and then decide on a reasonable amount of money that can go towards debt. This will leave you with enough money to spend throughout the pay period, but you won’t have to charge up your credit card.
You must learn self-control.
We weren’t fully communicating with each other
I would pay too much money on the credit card without telling Trent. Trent would not check the bank account and charge more on the credit card. Neither party was innocent. Communicating finances with your partner is hard. It can be difficult to tell them how you truly feel about something. I had a hard time asking Trent to stop his impulse spending. He had a hard time understanding why I was so obsessed with the credit card debt.
We eventually realized that if we were going to actually make this happen, we had to come up with a plan. We each decided on an amount of spending money per week that would allow us to spend guilt free. This is something we have been doing this for a couple years now and haven’t lived paycheck to paycheck since.
I wasn’t consistent with my side hustles
Working on my side hustles helped me bring in a lot of extra income. The only problem was that I wasn’t consistent. I would do it for about two months at a time and then get bored. Then I’d stop for another two months and then pick it up again. This cost us a lot of extra money that we could’ve used to pay off debt.
Trent already works full time and I don’t work at all, so these side gigs were really important to gaining extra income!
The most lucrative side gig I had, and still have, is reselling clothes on Poshmark. I started out just listing old clothes in my closet and then moved onto going shopping at thrift stores and finding great brands and styles for cheap and reselling them. I can normally flip an item anywhere from 5x-10x what I paid for it!
To learn more about reselling, check out my strategies for making more sales on Poshmark.
We didn’t focus on our why
With everything you do in life, you have to have a reason why. That’s what gives life meaning. Your reason can be as little as wanting to save for a new Michael Kors bag to as large as living debt-free life and to never have to worry about financial issues again. If you have a partner, it’s crucial that you both agree on a reason why.
Our why was to travel the world debt-free. There is nothing that sparks joy in us more than traveling together. Our deal was that once we got out of debt, we’d start saving to go on trips and be able to take at least one large trip per year.
Life gets in the way sometimes though and it’s easy to lose focus on your why. For us, our first international trip was pushed back three different times due to our schooling and Trent’s first deployment. This was extremely discouraging. We wanted this more than anything.
When you experience the disappointment of having your why ripped out of your reach, it definitely turns you off to the idea of working towards it. A few months later, we’d get ourselves excited and start working hard for our why again. Something you need to always remember is why you’re doing this. When you’re feeling discouraged, find a way to pump yourself back up again.