- Don’t put on the heat until it’s absolutely freezing. We got through several winters just by layering, going under blankets, and keeping our curtains open during the day to naturally warm up our place. Our highest heating bill was $39.76, which was actually our last bill.
- Ditch cable and go for Netflix, Prime, or for sports enthusiasts, get Sling TV. These are all options that are a fraction of the cost of cable.
- Bring a packed lunch to work, and stop eating out. Not cooking your own food is a budget killer.
- Just drink water. Not only is it healthier, it’s cheaper than soft drinks, sports drinks, or flavored teas.
- Make your own coffee at home or drink the office coffee.
- At one point, I didn’t wear makeup for two years just to save money to put towards debt.
- I also started cutting my own hair and giving myself manicures and pedicures.
- My husband and I stopped going to the movie theaters, and if we do go, we go to the very first showing, which costs $9.50 versus $13.50.
- Don’t get caught up in FOMO. Everyone is different. There’s just no need to keep up with your friends, neighbors, or co-workers. You will eventually get there. It may not be today, but you will.
- Don’t upgrade your digs until you’re out of debt or have saved enough for a down payment on a house. Upgrading to a luxury apartment complex because you want to treat yourself or because you want to experience living in such a place just eats up your chance to save, and will make paying off debt longer.
When I was knee deep in debt, I read countless personal finance sites and ‘get out of debt’ blogs in search of inspiration to help me towards debt freedom. My favorites are:
- Six Figures Under. A mother documents her family’s journey in getting out of $130,000 in student loan debt. They were living in her in-law’s basement before buying a home after paying off their debt.
- Frugalwoods. Although this couple was not in debt when I started reading their blog, their frugal lifestyle was inspiring to read about. They were able to purchase their homestead out in Vermont, and currently living their dream life.
- Financial Samurai. Sam shares a great deal of his own knowledge on personal finance. He started out as frugal and a super saver who eventually retired from investment banking to become a fulltime blogger.
- And Then We Saved. Anna, the main blogger, got me into cutting my own hair because she was doing it to save money. Her site also inspired me to stop making unnecessary purchases, which I still do today even though I’m debt free.
- Dailyworth. Dailyworth is a personal finance site targeted towards women. They put out a good amount of content for daily inspiration. I still look at this site from time to time.
- Learnvest. Similar to Dailyworth, Learnvest also puts out a good amount of content for daily inspiration.
When I graduated college and entered the working world, I didn’t really have my foot in the direction that I wanted to be in. I sort of took a job that was somewhat related to my major and pretty much stayed there for a solid 6 years because for one thing, the economy was so bad and because I had limited my job search to only the South Bay. I pretty much rode out the economy doing this one job, thinking I was doing the right thing, all for the sake of stability and for paying down debt when in actuality my ‘stable’ job didn’t pay me so well. It turned out that my new job kept giving me a raise each year with generous bonuses, and this was how I was able to pay off debt so quickly and save so much in a short amount of time.
So for anyone in a rut thinking they have to stay in their dead end job to pay off debt, don’t do it. You might as well jump right into your career or into something that you’re passionate about because your hard work and commitment will eventually payoff. I can’t tell you the countless times I thought about how my dead end job was going nowhere. I didn’t get a raise for the 6 years that I was working there and my year end bonuses were minuscule compared to what I’ve been getting now. It’s so important to know your worth and to know when it’s time to move on.
I knew I wanted to get rid of as much debt as possible and with a working class salary, I knew I could only do it by living a frugal lifestyle coupled with a budget. For a solid 5 years, I packed a homemade lunch to work everyday and drank just water. No soda, no tea, no frills. Often I’d skip out on co-worker invites to lunch because I just didn’t have that kind of money to spare. Obviously, there are trade offs. I didn’t get to bond with my co-workers or form lasting friendships. However, being debt free was my goal and so sacrifices had to be made.
While friends of mine started having babies and purchasing homes, my husband and I held off to save more money, pay off debt, and focus on our careers. Yes, time is not on my side and I’m often told this when asked why I don’t have kids yet, but it’s a choice I’ve chosen for future peace of mind. Healthcare is not cheap. At least not in my area. My healthcare deductible is $12,500 so that’s basically how much it’ll cost to birth a baby, which doesn’t even include first year baby costs. So as much as I would have loved to start a family a few years back, I just couldn’t bring myself to deplete our savings and possibly go into even more debt to have one. For others this may be a suitable risk to take, but for me, apparently I can still wait a little longer. And even if we had the money to cover our baby’s birth, the cost of daycare is astronomical in my area which would cost more than our rent.
Now I’m not saying to hold off on having kids. If having children is one of your top priorities in life, then don’t let debt stop you. But at the same time, it’s good to be responsible and have a plan so that you know you can at least provide for a family.
I’ve made trade offs to stay motivated with debt repayment. Like I’ve said in previous posts, I didn’t have laser focus and I probably could’ve paid my debt off 2 years earlier than I did. But everyone is different, and to stay motivated I chose a little self care. I eventually created a clothing budget for myself because I was wearing the same things over and over again for the past two years. The time had come for me to refresh my wardrobe for the sake of my sanity and self esteem, which by the way, is a whole other post in itself because I went through a journey in finding my style. But not to digress, I also added an entertainment budget. My husband and I needed some date nights because we’d been holed up for months at a time in our apartment trying to be as frugal as possible all so we could throw as much money as we could to our debt. However, we were itching to try new restaurants and create new memories together, which we eventually did in addition to planned and saved for vacations. So yes, we balanced having a life with debt repayment for the sake of our sanity and mental health, but of course all done within budget and within our means so as to not dig ourselves deeper in the red.
Not only was self care important, I also wanted to save money. Even though it took 2 extra years to pay off debt, I also saved in hopes for a down payment on a house. However, with current housing prices in the Bay Area these days, home buying will probably not happen anytime soon. Instead, I’ve opted to put a sizable chunk into the stock market and have a portion as an emergency fund for both me and my husband.
Now I’m not advocating for people to follow my same debt repayment journey. I just hope that by sharing what kept me motivated, others will stay motivated on the path to debt freedom. For me, I needed a balance.
I never want to be in debt again. If I can pay in full, I will. The constant worrying, the stress, or the anxiety are all not worth it for me to dive right back in to say a car payment. Without the hard lesson learned, I probably wouldn’t have my current mind set. I would be wasting my hard earned dollars on frivolous things like $5 lattes and spur of the moment trips. In fact, I would probably still be in debt taking my sweet time paying it off. Thankfully that didn’t happen, and here I am today proudly proclaiming that I’m debt free.
In the six long years of being serious about paying off debt, I learned that budgeting is key. It showed me how much money I could put toward debt, which then taught me the value of my hard earned dollars. It put my frivolous spending into perspective, which now I don’t do. These days I ask myself, “Is this worth it? Will this add value to my life? Is this reasonably priced? Can I find a better deal?” I’m basically a bargain hunter, and I don’t like paying full price for anything. Although I covet a luxury handbag, I can’t bring myself to buy one knowing there are cheaper alternatives and because majority of the price is on the branding versus the craftsmanship.
So instead, I save and now live within my means. I’ve learned that I don’t need much to be happy in life. Simple pleasures like a cup of coffee, putting on a face mask, watching Youtube, taking a walk outdoors, or even listening to music is enough to bring me joy. All the other stuff in life is just icing on the cake.
Debt gave me a lot of anxiety. I was constantly depressed because of it, and I was sick and tired of trying to keep up with the Jones.
Obviously, I made poor choices in my early twenties. I wanted it all –a nice wedding, a beautiful dress to walk down the aisle, a showstopping venue to wow my guests, a diamond ring to show off to friends and family. You know, the whole nine yards. It didn’t stop there. Then I also thought, “YES! We need a timeshare!” And this is when I had my “Aha” moment.
How did I just accumulate all of this debt?
It was a hard lesson to learn, but one that has truly changed my life forever. After I paid off my credit cards, I vowed to not keep a balance, and to this day, I’m still going strong. Instead, I utilize my credit card for mileage points and cash back rewards.
So unlike other millennials who have their parents to fall back on, I don’t have the same luxury of mom and dad bailing me out. Rather, I only have myself to rely on and basically savings. I can’t even rely on my husband because he’s so terrible with money. To make things work, we pay our own bills and keep separate checking accounts. That’s just how we’ve been able to keep our marriage happy and equatable, and why I was determined to eliminate my debt –so that when the next recession hits, I won’t be stressing out like the last time.