The Dreaded “B” Word
That’s right, the Budget.
That’s probably not the word you were thinking of, but the word “Budget” can still be considered a swear word to some people. I was one of those people until I realized that a budget has been one of the best things to ever happen to my life.
I never thought I needed a budget. I paid my bills on time, rarely had an overdraft fee, and could go out and do things if I felt like it. And if something came up, I could use a credit card for “emergencies”. Here’s a hint guys: a credit card can make anything feel like an emergency (example: my TWO vacations to Mexico that I just HAD to go on). Another hint: paying bills on time isn’t a budget. It’s better than just throwing money out of my car window as I drive down the road, but it’s not a budget.
Financial Peace University completely changed my thought process. I no longer wanted to have to pay for choices that I made in the past. I no longer wanted to spend more than half of my monthly income on debt payments and wondering how I got into this mess. No more debt dragging me down like dead weight. And I think I did something pretty incredible.
I’ve paid off $4,400 of debt in 45 days.
$4400 of debt is dead and gone, out of my life forever. On the FPU page of the Dave Ramsey website, there’s a statistic that states the average couple pays off $5300 in debt in the first 90 days. Please note, couple means two people. I am a Single Sally, therefore, I am not a couple. I’m also only $900 short of what the average couple pays. Do you know what that means? It means I did a happy dance in my chair as I typed this sentence. It also means I’m going to toot my own horn for a few days. It absolutely means that if I can do it, you can do it.
Here are my Top 6 Tips to make it happen:
- Treat your budget like your BFF. My budget has become my Bible. I have it with me at all times, in all forms. As I’ve mentioned previously, I’m using the Every Dollar app to create a zero-based budget. The app works on my phone, and I can also use it on my laptop. It’s so easy to use, and it takes me about 10 minutes to set up my budget for the month. I also have a “Budget Binder” that goes with me everywhere. It’s the paper version of my budget and allows me to mark things down, cross things off, make notes, and doodle. I’m consistently updating my budget and making sure that everything is being tracked.
- Use a Zero-Based Budget. A zero-based budget is a budget formula that ensures that your income minus expenses = 0. There’s a reason this budget is working so well for me. It gives every single dollar a purpose. If I assign $200 for groceries for the month, then $200 is all I have, because all of my other dollars have already been assigned to a budget category. Now this is not to say that I can’t make changes to the budget, but if I do make a change, my income-expenses should still equal zero. If I want to take $20 from my grocery money and add it to my restaurant money, I need to make that change and reflect it on my budget app and paper copy.
- Treat your debt like it’s the villain of your comic book. One of the most motivating factors to paying off my debt, is that I hate the idea of having debt for the rest of my life. I want it gone, and I want it gone as fast as possible. Debt is preventing me from doing the things that I want to do, like buying a house, going on vacations, cutting out my part time job, and saving for retirement. It makes me angry when I think about it, and the best solution is to get rid of as quickly as I can. For me, that means taking on extra hours at my part time job, selling things online, and cutting my budget to the bare minimum. But it’s worth it, because the progress is real.
- Sacrifice what you want now, to reap the rewards later. I know, this one sounds super cheesy. But I’m telling you, it works. I used to have the mindset of “I want it now, I’ll buy it now”. And I no longer live that way. I’ve given up a lot of budget items that I thought were a necessity to live. No more Chick-Fil-A every week, no more unlimited Amazon Kindle budget, no more impulsive clothing purchases. If it’s not in the budget, I don’t buy it. And you know what’s crazy? I’ve adjusted, and it was easier than I anticipated. Once I realized that freeing up $100 in fast food gave me an extra $100 to tackle my debt, I was hooked. Cutting my budget to as a little as possible gives me a thrill. It’s like a game of Limbo – how low can I go? Figuring out a need versus a want, means I can go pretty low when I need to. $100 grocery budget for the month? No problem, PB&J all day. No more Kindle books? I better get a library card. I figured it out and am making the sacrifices now, so that later, I can do what I want and not feel the pangs of regret and guilt that I got so accustomed to feeling.
- Have a rock solid support system. This is key. If you don’t have someone cheering you on, it’s easy to get sidetracked. Luckily, my mom has been my biggest cheerleader. Whenever I call or text her to share my latest victory, she’s just as excited as I am. My coworkers, especially my Work Mom, Kim, have also been great at pushing me forward. She keeps me focused and is consistently telling me how proud she is of my progress. There is no comparison to surrounding yourself with people that can lift you up when you feel like you aren’t making progress, or to remind you of what your goals are, or just to kick you in the ass and make you work hard when you start to get lazy. Find your support system, and let them lift you up when you need the extra strength.
- Set a goal and let it drive you. I have a long-term goal to be debt free by 30. And while that’s pushing me forward, it’s also crucial for me to have mid-range and short-range goals to keep me motivated. My short term goal is to pay at least $2000 towards debt each month. By December 31, I want to pay off $15,000 in debt. Those goals are what motivate me to continue making my budget, keep posting things to sell online, and to keep picking up those extra hours at my part time job. I have something to work for, and it keeps me going when I wake up in the morning and want to call in sick, because I’m feeling worn down. It keeps me pushing through when I wake up tired and lazy, and just want to run through the Dunkin’ Donuts drive thru for an iced coffee.
It’s not always easy. In fact, it can downright suck when I just want to forget the budget, walk into Target, and spend all my money in the office supply section – I’m a sucker for good organization items. But I’m sticking with it. Because I know I can, and because the results are real.
$4,400 is gone. 2 credit cards are paid off. 2 medical bills have disappeared. My budget isn’t a swear word, it’s a superhero.