Tiny House, Tiny Living, The Tiny Life.

How We Paid Off $59,000 in 24 Months

There’s no easy, fast way to pay off your debt. It takes a lot of hard work, sacrifice, and focus. The good news is that it is possible, no matter how overwhelming it may seem, and the end goal is worth it.

March 17, 2014: I was sitting at my dining room table surrounded by bills, sick and tired of making a decent income, but having nothing to show for it. The stress of juggling payments and the fear that there was going to be more month than money had gotten the best of me, and in that moment I knew we had to make a change.

You may look at the title and think to yourself, “Well if you paid off $59,000 in 24 months that must mean that, on average, you were putting just over $2,400 towards your debt each month.” Putting that amount (37% of our take home pay) wouldn’t have been possible if we hadn’t been willing to change our behavior as well.

Getting Real With Your Spending Behavior:

I added up the debt and had no idea where that money had been spent or what it had been spent on. We didn’t have any fancy clothing, we don’t have a home filled with the latest and greatest technology, our furniture was mostly purchased second-hand, and our car was certainly not the fanciest (not unless you consider a well-loved Honda Odyssey fancy).

So in order to see where the money had  gone and where the leaks were in our spending, I decided to do a six-month spending analysis. I grabbed six months worth of credit card statements and bank transactions and got to work. I quickly realized that we were the “death by $20” types, meaning we would spend $20 here or $20 there. Although that amount doesn’t seem like much at the time, it quickly added up.

Take Responsibility:

overspendingWhen married, in debt, and stressed, it was easy to blame the other person and their spending behavior for getting us into the mess that we were in. Completing the spending analysis put both my husband and I in the position where we had to take responsibility for our part in the problem.

We could see exactly what we had spent over the last 6 months. The truth hurt but it was in front of us and the numbers didn’t lie. Once we saw the holes in our spending, and took responsibility, we were now able to come up with a plan to get out of the mess that we each had a part in creating.

Develop a Budget Where Every Dollar has a Name:

The biggest part for us in our journey of becoming debt free was to get on a monthly budget where every dollar was given a name. We started at the top with our income and worked our way down through our expenses until we got to the end. Any money left over each month was then thrown at the debt.

We preferred the debt snowball when determining which debt we wanted to attack first. In the debt snowball, you list your debts from the smallest balance to the largest balance and then start paying them off in that order. We loved the traction we felt as those smallest debts got paid off quickly.

Cut, Slash, and Free Up Your Income:

In order to be able to put an even larger amount on our debt, we looked for ways that we could cut our spending. We slashed our average monthly grocery budget by $200 a month by meal planning, shopping with a list, and making as much as we could from scratch. We cut our clothing budget by shopping at the thrift stores and the clearance racks. We only bought what we needed and skipped the things that we wanted.

Stick With The Budget

budget moneyOK…This was a hard one at first. We really needed to get into a routine and pattern that worked for us when it came time to checking in with the budget. When first getting started, I had a budgeting app that was on my phone that I checked in with at least once a day (sometimes, several times a day…I’m a bit of a numbers geek).

Writing a budget is one thing, but checking in with the budget is the important part. We had written budgets before, but as the debt rose, it became clear that a budget isn’t a set it and forget it tool. Your money will not magically behave just because you put some numbers down on paper.

Get the Biggest Shovel Possible:

Aside from getting on a budget and sticking with the budget, finding extra work and making extra money was hugely important in us becoming debt free as quickly as we did. When you want to get out of debt so bad you can taste it, sacrificing some free time to work extra hours or a get a second job in the short term is a great way to put your debt pay-off into overdrive.

Stay Focused on the End Goal:

During our debt free journey, it was tempting to take a break, and enjoy some of the extra money that we now had by working extra jobs. We knew though that if we stopped, getting back on track was going to be even harder, so we had to stay focused on the end goal.

We reminded ourselves of our “Why?” Why we wanted to get out of debt. What a debt free life would look like and feel like. We tracked our progress and made every purchase intentionally by asking ourselves, “Do we want this item more than we want to be debt free?” When you know where you’re going and why, getting there becomes much easier.

Your Turn!

  • What does financial freedom look like to you?

What’s Your Wisk?

Today we have a new video about changing the little things in life that bother you.  This quick little hack has made my life so much better and it’s as simple as asking…. What’s Your Wisk?

 

how to live a better life

How Minimalism Made Me Rich

I’ve experienced so many benefits of a minimalist lifestyle – but one of them that attracts so many newbies to the minimalist movement is the ability to save a ton of money. These are five ways that minimalism made me rich:

How Minimalism Made Me Rich

1. I Stopped Spending Money On Stuff I Didn’t Need

Pre-minimalism, I’d spend insane amounts of money every month on things that I didn’t need. I’d stock up on cheap jewelry from Forever 21, random decor from Target, and tons of tops that I decided later that I didn’t like. Now, I go to the store with a plan and only buy what I need.

2. I Got My Time BackHow Minimalism Made Me Rich

I stopped going out to eat or get drinks with friends who weren’t benefitting my life. I realized I had so many “let’s get drinks” friends, but the people in my life who truly added value were those close relationships. I saved heaps of money by cutting out the “let’s get drinks” friends and spending time primarily with my close friends and family. The bonus was that I didn’t tend to spend a lot of money when I’d spend time with those close to me.

 

3. I Started Working For Myself

I started a side hustle which turned into a (mostly) full-time gig. I started earning money from various sources and all of that added up to a substantial income. Not only is this type of work more flexible (time-wise and income-wise), I have the ability to do it from anywhere. Having an online business usually means low overhead costs, flexible schedules, and the ability to scale your income.

4. I Travel Full Time

It’s a common myth that travel is super expensive. In the last two years of traveling full time, I have spent less per month than I would spend living in the United States. The United States is an expensive, first world country; a lot of the countries that I visit are much less expensive. I lived in Thailand like a queen for $700 a month. Living for less means that more money goes into savings.

How Minimalism Made Me Rich

5. My Lifestyle Became More Sustainable

Aside from having a side hustle (which turned full-time), saving money on things I didn’t need, and being more flexible with where I live, I’ve also gained more money from minimalism because of the little lifestyle changes I’ve made. I have simplified my meals, cut out unnecessary foods from my diet (I’m looking at you, sugar), and simplified my daily life (which cuts back on spontaneous meals out). By making little changes to the way I live, I’m able to save heaps of money every month.

These are just five ways that minimalism made me rich. Becoming a minimalist helped me easily change my lifestyle, figure out what I want out of life, and save tons of money.

Your Turn!

  • How has minimalism made you wealthier?

Beginner’s Guide to Prepping – Should You Prepare?

The cold wind howled with a chill we hadn’t felt since last winter. We bundled up and threw a couple of extra logs on the fire. It all seemed pretty normal for a late fall day in Idaho. But the temps kept dropping and then everything went dark. The house was cozy, but I knew that without power to keep the furnace running, the outlying rooms would start to get cold. I gathered the kids and their bedding close to the wood stove, and we hunkered down for the night.

 

wood heat

 

Are you prepared if the power goes out? What if there is a storm and you can’t go to the grocery store? Our story could have panned out much differently had we not been prepared.

Maybe you don’t face the threat of harsh winter storms or hurricanes but chances are you rely on the income from your job. What if you were to lose that without notice? Would your family go hungry?

No Pay!

Several years ago when the government was busy arguing over the federal budget our family went through two periods of no pay. During those times we had food to eat and money to make our payment. It was scary because our lives were in someone else’s hands but we didn’t fear whether we could feed the family. Our family ate like kings as co-workers applied for unemployment benefits.

 

home-cooked meal

 

Through all of these experiences, we have learned how important it is to be prepared. Does that mean that you need to build a bunker and stock it with two years of freeze dried meals? No. You can prep without being a doomsday prepper.

You want to stock up on some essentials – where do you start?

 

Scenarios to consider Cooking during disaster

  • Your climate – What are the extremes in your area? If you lost power during one of those extremes what do you need on hand?
  • Power outages – Can you still cook? What discomforts will you suffer? Will your animals have water?
  • Economic distress – What if computer networks fail and you cannot use your debit card?
  • Job loss – Can you feed your family for the next three months as you find work and wait for the first paycheck?
  • Natural disaster – Flood, hurricane, tornado, earthquake, wild fire, extreme heat, extreme cold. Every year part of the US is hit with a natural disaster. If one hit your city would you be prepared to weather that storm?

 

After considering different scenarios choose which ones you feel you need to be prepared for. Now decide how you can insulate your family from the effects of those situations.

 

 

Job loss is a risk everyone faces, even if you are self-employed. Does your family have provisions to get you through a hard time? I have heard people talk about losing work and going home to bare cupboards. How do you choose what to spend that last paycheck on? Will you get work fast enough to continue paying your bills?

How much do I really need?

dry goods storage

I like to keep at least three months of food on hand at all times. Six months or more is even better! That way if the car blows the transmission you will have a lot of breathing room. Of course, a savings account goes hand in hand with all that we are talking about.

Having food storage is like a dedicated savings account that is set aside just for feeding your family. If you are buying food and preserving it while it is in season, you will have a great return on investment!

Keep these items on hand
Food

  • Cooking supplies
  • Water
  • First aid supplies
  • Medication
  • Toiletries
  • Feminine hygiene products
  • Diapers
  • Gasoline
  • Propane
  • Flashlights
  • Batteries
  • Fire wood
  • Clothes line or drying rack
  • Bushcraft knife
  • Tools to make repairs

 

Your Turn!

  • What preps will you start building up today?
  • What gaps do you have in your preps?

6 Things We Gave Up to Get Out Of Debt

In order to get our consumer debt paid off, my husband and I had to be willing to give up some things. We had to consider what aspects of our spending behavior we needed to change so that we could hit our goal as quickly as possible.

Here are the six things that we decided to give up in order to help us pay off our debt:

“Browsing” at our favorite stores:

The more time I spent browsing, the more I realized that there were items out there that I didn’t even know I “needed” and ended up buying. When I did our spending analysis at the beginning of our debt journey, what I found were my weaknesses for Target and the drugstore. That’s where I tended to get into the most amount of trouble when it came to spending impulsively.

I quickly realized that if we were going to get out of debt, browsing in those stores wasn’t something that I could be doing any more as too much money was getting wasted on items I didn’t need.

Shopping without a list:

Whenever I shopped without a list, my focus was easily diverted to all of the other things that I might “need”. In order to cut back on the amount we were spending, we learned that we needed to not only shop with a list, but stick to the list.

Shopping with a list included more than just groceries. When we need clothing, or anything else for that matter, I’ll do an inventory of what we have and then come up with a list of what we need so that when we go into the store we are not as easily distracted and wasting money on items that we don’t need right now.

New clothes:

Instead of shopping at the regular retail outlets, we now shop for new-to-us clothes at the thrift store. In doing so we have saved a lot of money, cutting our clothing budget in half. In order to save even more money, my favorite day to shop at the local thrift store is on their 50% off day.

Convenience food:

One of the biggest ways we saved on our grocery budget was to give up many of those convenience foods that are pre-made or pre-packaged. Many of these processed or pre-made foods tend to be overpriced and you can do it yourself for a lot cheaper. We make our own bread, pancake mix, hot cocoa mix, side dishes, and pizza. Not only is it just and easy to make these things, it’s also comforting to know exactly what’s in it.

Free time:

In order to get our debt paid off, we were also willing to give up some of our free time to generate an extra income, giving us more money to throw into our debt snowball. Both my husband and I have our respective “side hustles” that allow us to use our talents or interests to earn even more money.

Living life without a budget:

budget money

Living on a budget focused our spending and allowed us to gain control of our money. Having a plan for our money allowed us to see how much we needed to live and get by and then how much money was left that we could throw at our debt. Once we got on a written monthly budget, we truly felt as if we had gotten a raise because we were now telling our money where to go instead of wondering at the end of the month, where it went.

Your Turn!

  • What are you willing to give up to get out of debt?

 

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