Debt is a scary thing. I remember when I first got my American Express. My credit score had already been established with some help from Mom and Dad, and we were all a little surprised at the amount of credit I was extended almost instantly on my first real credit card. I told myself, “I will not use this unless I have to.” My mom suggested I get it because I may have some business travel after I graduated and hotels needed something on file in case there were damages. I said I would be responsible with the money I was “afforded”. I was dead wrong.
Long story short, through a couple of things beyond my control (clutch going in my car etc.), and a lot of stupid things well in my control (video game purchases), I racked up the debt. I kept being told by people around me, “Don’t worry, do you know how quickly you’ll pay that off when you start your full time career?” But then I got my first real job. Granted, I was still an intern, but I was making more than ever. Problem was, I was also spending more than ever. Just when I began to get traction on my debt, I’d make another poor spending decision, or something on my car would break, or a quick trip to Chipotle that couldn’t hurt that much would occur. I was out of control, and as my future loomed before me, I realized things weren’t going to get any cheaper.
I believe the Lord tends to pull me back into the right direction through convergence of life events. Baylee and I watched this really awesome documentary about minimalism. These guys gave up most of their material possessions after realizing they wouldn’t fill the holes in their lives that could only be filled with experiences. I began listening to their podcast and they mentioned getting out of debt with Dave Ramsey. I began listening to Dave Ramsey’s podcast and learning about how to get out of debt for real. I spoke with my parents at length; who had also began budgeting and offered me tips. Then, close friends of ours lent Baylee and I Dave Ramsey’s financial peace university. It was such a whirlwind, but everywhere I turned, the signs were pointing towards being more responsible with my money.
So that is the long and short of it. I am going to be writing a monthly progress report called “My Budgeted Life”. It will be about my life on a strict budget, lessons I learn, and how I cut costs. This is more for me than anyone else, a means of accountability, a way of reminding myself how much progress I’ve made, but I hope you can get something from this series. This is month one.
Budgets have really negative connotations. “I’m on a budget” usually follows right after “Sorry I can’t insert super fun activity with friends here but…” and it makes people feel like they’re limiting themselves. In reality a budget is a plan. I downloaded an app on my phone called EveryDollar (also a Dave Ramsey thing, I’m essentially surrendering myself to his plan). EveryDollar lets me put in how much income I make, and then I plan out how every single dollar will be spent. This tells me exactly how much will be left over to pay off my debt every month while still covering all the things I need or want to spend money on. They key for me is treating it like a game. How high can I really get that debt payment every month? I treat it like a challenge, and I am taking it head on. My budget helps me do this. It gives me guidelines to spend by, and in turn lets me do the most with my money. This month, I lived off of 35% of my income, and paid 65% towards my debt. Maybe next month, I can shoot for 70%.
This first month has been full of lessons. I’ll share a couple with you here. One huge lesson is how much you truly value all the Lord provides for you. Whether you are religious or not, this pertains. For me, I see my abundance as a gift from the Lord. For others it’s something they’ve worked for. No matter what, don’t take what you’ve got for granted. Baylee and I took a trip to Universal (we had already bought annual passes and can stay in Orlando for free), and we packed sandwiches and cold pizza for the road. To someone who goes out to eat every day that sounds disgusting, but all of sudden I thought that sandwich was the greatest thing in the world. We get to eat. What a blessing!
Another lesson is I’ve learned through this process is that mistakes happen. I made mistakes in my budget. I’m doing this aggressive debt attack plan because I made mistakes spending. Yes, mistakes will happen, but you cannot just accept that. You need to try and do better. For years, I’ve always been the type of guy who has said to himself “I’ve made my bed, guess I’ll just lay in it.” No! Don’t just accept that you made a mistake and be okay with it. Be intentional about what you’re learning and adjust in the future. Whether it’s in budgeting or not, that is how we grow.
My final section of this monthly progress report will always be about ways I cut costs or increased my income that month. They may seem obvious at times, or really obscure at others times, but I’m sharing them because they’re working for me.
The biggest change to my spending habits has been on food. I charged my credit card at restaurants 25 separate times in the month of February before I began this journey. That is almost once a day. In March I went to a restaurant a total of five times. I went to a restaurant a fifth of the amount of times and spent less than 100 bucks eating out in March. The rest of the time, I was meal prepping. Baylee and I would grocery shop twice a week and prepare meals to pack for lunches and dinners throughout our weeks. I made more sandwiches last month than I have in a long long time, but this goes back to my earlier point about valuing what you have. Every sandwich bite was a small chunk out of my debt, and tastes great.
Finally, I began to sell a lot of my stuff to increase income. This wasn’t just because I wanted more money. I mentioned minimalism earlier. I had/have SO much stuff. Way more than I need. This month I decided to donate well over half my wardrobe, and I intend to cut it down even more. At the same time, there were those gadgets or little items laying around that would bring value to others that I hadn’t touched in what seemed like a year. Some stuff that was still in boxes from my last move, because I had never bothered unpacking it. So I sold some things. Made an extra couple hundred bucks, and increased my debt payment for the month. It’s nice living without so much excess just laying around going to waste in my apartment, and it helped me further my own goals.
So that is month one. It has been quite an exciting one! I wanted to tell the back-story and explain where I’m at with this before I began the actual progress report, so I apologize for this post being much longer than the ones I usually put up. The coming months will be shorter and more straightforward. If you have any similar budget stories, or any feedback, or just plain think I’m wrong about something, let me know in the comments below because I love to hear from readers. As always, thanks for reading.