Three years ago, I was nearly $60,000 in debt. I had a Bachelor’s degree that didn’t appear to be worth its weight in salt and a job that couldn’t cover a fraction of my monthly bills. I was terrified.
Today, I am closer to complete financial freedom than I ever dreamed possible. Last week, I paid off my last remaining credit card balance. This two-part post is a celebration of this incredible milestone in my journey.
In part one, I explained how I got to that terrible place. In part two, I will explain how I’m getting out of it (and how you can do it, too).
————————————————————————
1. Change the way you think about spending money. For most of my life, I believed that money was made to be spent. I believed that I *deserved* to spend every dollar that I earned on some material thing that would “make me happy.” I coveted material possessions—clothes, jewelry, electronics, cars. What I realize now is that money is not meant to be spent. You only need to earn enough money to survive. You should have enough money to buy only what you need. There is no need for excess.
“You’re not your job. You’re not how much money you have in the bank. You’re not the car you drive. You’re not the contents of your wallet. You’re not your fuc*ing khakis.” (Fight Club)
This shift in mindset is hard to adjust to at first. You may not like the reactions that you receive from people. Believe me, I’ve been called cheap a few times, but I pay no mind to it. I would choose cheap over poor any day.
2. Keep a budget. I highly recommend using Mint.com. I started using it in September and it has been one of the most transformational and useful tools throughout my journey to financial freedom. It allows you to sync up all of your accounts (loans, checking, savings, etc.) in one place. Then it keeps track of every transaction that you make and sorts/organizes all of the data for you. It allows you to track your spending over time and by category. It gives you incredible perspective and insight about where your money goes each month/year. It has been a truly eye-opening experience for me.
If you’re unwilling to try Mint, you can keep a budget on a spread sheet or even by hand. However, the important thing is to be completely conscious about where every dollar you spend is going.
3. Use a debit card. To reap the full Mint.com experience you should use a debit card for every purchase you make. Using the debit card will automatically flag each transaction you make into the appropriate category. So if you go to Shoprite, it will get marked as groceries. If you go to Home Depot it will get marked as home. If you stop at the gas station it will get marked as automobile, and so on.
I use my debit card (linked to my checking account) for almost every single transaction that I make. I also have all of my monthly bills (like my auto insurance, utilities, and gym membership) automatically debited from the same checking account each month. It makes keeping track of my spending that much easier. Plus, I do not like dealing with cash. The debit card is quick, easy, and is accepted almost everywhere now.
Whether or not you use Mint.com it is a good idea to use a debit card simply because you can review all of your purchases and purchase amounts on your monthly statement. Trying to keep track of receipts is a hassle that I don’t have time for.
4. Pay off credit cards and cut them up. Paying off my credit cards was my first priority. For awhile I tried “credit card surfing.” Let me just tell you from experience, it’s overrated and it really doesn’t work. The idea is that you surf from credit card to credit card by transferring balances. A lot of companies will give you 0% APR for 6 months if you transfer your balances over to them. After the 6 months, you “surf” to a new card with another promotional rate.
The problem with this tactic is that it gets messy quickly, it becomes difficult to keep up with, and if you lose track you will end up getting burned by high APRs, finance fees, cancellation fees, etc. Also, it probably doesn’t look great on your credit report if you’re opening up a new card every 6 months or so.
It is much safer and wiser to just stop using credit cards! My theory is simple and has taken me very far: If you can not afford to buy it, then you can not afford it. Period. It is simple logic.
5. Eat in. This is one of the easiest changes to make, but it also comes with an enormous, positive impact. When I started closely tracking my spending habits, I was shocked to see how much I was spending on eating out. A meal at a decent restaurant goes for about $25 per person. If you eat out twice a week, that is $3,120 a year. If you grab lunch out during the work week, it’s about $8 a day. That’s $2,080 a year. Put those together and you could be spending $5,200 a year or more on dining out! That is outrageous and completely unnecessary.
Since I started eating in and packing lunches, I’ve taken my monthly food spending from $500 down to $200 or less! Over time, that means enormous savings. Check out 5dollardinners.com for some awesome, inexpensive recipes. I love it! Also, investing in a crock pot was one of the wisest decisions I ever made—chili, sausage & peppers, and goulash will be your new (delicious, cheap) best friends. (Here are some more tips for eating healthy & mindfully.)
6. Direct deposit money into savings every month. This is my final—and perhaps most important—tip. When I began my journey to financial freedom, I opened a savings account with ING Direct. It is an easy-to-use online savings account and it gives you interest on the money that you save. It also allows you to set up easy direct deposits.
I started out small, depositing $50 a month into my savings. As I learned to keep my budget tighter and tighter, I increased the amount that I put into my savings each month. Currently, I am putting away $500+ per month and hope to get closer to $1,000 per month in the very near future.
When you direct deposit the funds, it comes out automatically. It is painless because you don’t have to do a thing. Because it’s automatic, after awhile you don’t even notice that it’s missing. (I remember reading that on another blog several months ago and thinking, “Are you out of your mind?! I’m not going to miss it? Yea right!”) But I can honestly say that after a few months, you adjust to the missing money. You truly do not miss it once it becomes normal for that amount to be deposited into savings automatically each month.
It has been one of the best decisions that I’ve made and because I’ve worked so hard to get to this place—I don’t touch that money! I am keeping it there for a rainy day or to pay off my student loans someday in one fell swoop.
————————————————————————
As I stated at the start of this post, three years ago I was almost $60,000 in debt; I was twenty-three years old; and I was scared to death. Today, I have my finances under control! I am on the road to financial freedom and you can get here, too. Truly, it is not as hard as it seems. With common sense and a bit of dedication, it will happen. Paying off my last credit card balance was like taking chains off of my wrists for the first time in seven years. The feeling was completely priceless. If I can do it, anybody can.
So, what are your financial goals? Have you ever been in financial prison? How did you free yourself? If you’re still there, what are you going to do to break free?
I’m so sorry for your loss. It’s so, so hard. I wasn’t ready to have another cat for 4 years after mine died suddenly.
Last winter within 3 weeks I lost 2 of the women I was most close to in my family/life – it was unbelievable and shocking. I held their light close to me, but I also let myself mourn, am still mourning every day. It’s profound, that kind of loss. But they created me, they gave me life, and I am so grateful.
@ Verhext – Is your first name Tamera? That is gorgeous.
Thank you so much for visiting & for your kind words. I am so sorry to hear about the loss of your cat & about last winter. I can not imagine how difficult that must have been. I’ve never experienced loss like this before. I’ve been blessed thus far. As difficult as this has been, I know it is happening for a reason — I am stronger for it. Perhaps I am better prepared for what is to come next.
The fact that you look at your situation with gratitude is just beautiful. It speaks volume about you as a woman, as a wonderful soul.
I am really happy to have met you & look forward to know you better.
xo,
Dena
This post is beautiful. I lost my father only three months ago, and it’s been pretty difficult but everyday I remember him, how funny he was, and how much of him is in me and I keep walking.
@ Carol – Thank you so much for sharing your story with me. I am so sorry to hear about the loss of your father, but I am inspired and amazed that you are able to look at the situation in such a positive, beautiful way. “He is in me and I keep walking.”
You are amazing. Your father must have been (must be) so incredibly proud of you.
I have a cat that means the world to me. I feel she is a once-in-a-lifetime cat and a soul mate. I’m very protective of her.
Something odd has been happening in my house, and it has changed how I view death.
We have ghost in our house. It’s not a human; it’s a cat ghost. It jumps on our beds at night and walks and purrs. I have a housemate and I asked him one day if he ever felt like a cat jumped on his bed, only to see nothing.
To my shock, he said said “Yes!” Just like me, he feels the impact on the bed and feels it take a couple of steps – and then nothing.
One night, it jumped on my bed with such force that all the springs creaked. I always think it’s my own living cat when it happens. A few nights ago, it jumped up and walked the length of the bed, purring the whole way. Thinking it was my cat for sure, I said “Hi Sweetie” and raised my hand to pet her, but nothing was there. I turned the light on and walked all around the room. My cat wasn’t even in the room.
The ghost cat will never jump on my bed as long as my cat is sleeping with me. It will only come when she isn’t in the room, which means it only happens once every week or two because she is usually with me. One night, my cat fell asleep on the sofa. When the ghost cat jumped on my bed, I thought it was her coming to bed. There was nothing there, so I checked the living room and my cat was still on the sofa.
I own two cats and I am involved with a cat rescue organization. I don’t have any idea where this cat ghost came from, but a couple of friends have suggested that maybe it was drawn to me from seeing me care for other cats.
I did some internet research on this and found that many people have had this experience. I even saw a book about ghost cats on Amazon. A lot of the reviewers said the book made them cry because most of the stories involve cats coming back to visit their owners.
I can’t deny that this has freaked me out, but it has also given me a gift. If this unknown cat can visit me from the other side, then I know I will always be connected to my own cats and I will meet them again. I can no longer speculate on the sad possibility that life ends at death.
I hope this brings you comfort. As weird as it’s been, it has brought me comfort.
@ Lori – Wow! Thank you so much. You know, this does bring me comfort! In fact, I have a similar experience and you’ve helped me remember it. See, my godfather inherited my great grandmother’s farm/boarding house many, many years ago. He has lived there ever since. Now if ever a house were haunted–this is it. And moreover, it’s not the entire house, just the upstairs.
The house is well over a hundred years old. Every time I go upstairs the hair on my body stands on end. it can be ten degrees colder up there than it is in the rest of the house for no explainable reason.
Anyway, ten-twenty years ago my godfather had frequent parties. One night his friend stayed over and in one of the upstairs bedrooms. In the morning my godfather asked his friend how he slept. His friend replied, “I slept fine except for that your cat jumped up on the bed all night and walked around on my legs.
Well, needless to say–my godfather didn’t have a cat. His cat–Gypsy–who was more like a member of the family than a pet had died a few months earlier. To this day — every now and then — she still visits.
It’s sort of incredible, yes! But somehow it is soothing. We are never really alone.
Thanks again for sharing. Please visit again! <3
Oh boy! The cat hasn’t walked on me yet, but as time has gone on, the incidents have gradually become more strong and undeniable. The purring only happened recently. But there was always that unmistakable sensation that only a cat makes when it jumps on a bed.
I am agnostic. I tend to think there is a God, or at least that there is something out there, but feel no need to define it. I’ve known people who have told me of personal ghost incidents, and as long as I knew them to be a truthful person I pretty much believed them. And many of the stories were wonderful, uplifting and positive ones with deceased family members.
It was those stories that made me think there was an afterlife. But I’ve also allowed myself at times to entertain the idea that maybe death is the end even though that made me sad. I guess I was trying to keep an open mind.
Now I can’t even consider the idea that there is an end at all!!! When it happens to you personally, it’s different than when you hear it from someone else.
Oh, and it’s funny that the upstairs was colder. Usually upstairs rooms are a lot warmer since heat rises. Glad my experience helped. I was a little afraid you’d think I was off my rocker. 😉
I choose the light! Great entry…very timely for me as well, although not the death of a beloved animal, the death of a beloved relationship. The past few months have been difficult, and it looks like things will not work out as I had hoped. That said; this article points out the need to continually strive, build, and create light, even what may seem like a dark hour. Thanks Dena.
@ Brian – I am so excited to hear that you’ve chosen the light. Great decision, friend. I’m sorry to hear about the death of your beloved relationship; but it sounds like you are in the right place to move forward and create even more love in the future. Thank you so much for stopping by, for sharing, and for helping me to spread the light. You are wonderful.
So sad to hear about your pets! Take care of yourself girl, and allow yourself the time to grieve. They really become like our children. x
@ Amy – Thank you, love. It has been incredibly difficult — I didn’t know what to expect as I’d never been through this before. It is not often in life, but this situation was in reality WORSE than I ever imagined it could be. So much pain.
But, I am healing. Every day is a bit easier than the one before. I’ve found a way to replace the grief with love.
Thank you so much for this post. We lost our 14-year-old grey tabby Zoey on Thursday. She had a mammary mass removed a year ago and the disease returned and spread to her lungs so we had to make the decision of letting her go.
It’s extremely difficult right now but I have saved this post as a reminder of how to move on when I am ready. I have definitely been replaying all her crazy, silly, funny antics over in my mind and I know one day they will not be so bittersweet.
@ Mary – I am so sorry to hear about Zoey. 14 years! I can only imagine what that sort of bond must be like. Just through your words, I can tell that you loved her deeply and that she knew it.
I will be thinking of you & sending love your way. Stay strong and I am so happy to know that this post helped you in some small way. xo
wow…dena i was crying reading your post about your pets….i saw the picture of your little doggie…and it reminds me of our lulu…i don’t know how i would be able to handle it…but i guess from your readings we must move forward…i know i will need to come back to this sometime in my life…thanks dena
@ Roberta – It is without a doubt the hardest thing that I have gone through in my life. When I lost my Mika I didn’t even want to go on. To this day, when I get reminded, it is like a knife to my heart. Extremely painful. I just do my best to replace the pain with love. It’s the only way to go on.