7 Things I Did to Face Debt and Take Charge
Written By: Amanda Courtney
Talking about money and budgets is never fun… I’ll go first.
I will never forget going with my mom to pick-up our food stamps from the local office and then standing in line at the grocery store to use them, only to be judged by the woman at the cash register. I was in the third grade. It wasn’t long after that when I heard my mom talk about this thing called bankruptcy and needing to borrow money from my grandparents.
My mom, being a single mom without any sort of child support coming in from my dad, never had disposable income or even enough income at times. There was no money for extra luxuries and I knew that, so I didn’t even ask. Instead, I would ask my friends to “borrow” a dollar here and a dollar there – many of my friends were so gracious in knowing that they would likely never get it back – I will never forget those friends and their endless generosity and graciousness.
College came and so did the pile of debt. In addition to my lovely student loans, I went down the credit card rabbit hole. If I received a paycheck, I spent all of it and then some. I spent more than I had, I didn’t save a dime, and I scoffed when anyone mentioned the idea of tithing. Savings accounts were for “rich people” and I was not destined for the life of a “rich person”, or so I thought.
At 28, I met my now husband. Early in our relationship, we discussed finances. During these conversations I found myself intimidated and embarrassed and unworthy. He had no debt, had a healthy savings, faithfully tithed, and always lived within his means. Reluctantly, I shared my truth – even though my voice shook.
I explained my debt – all of it. I spoke honestly about my history. I was afraid, but I didn’t need to be. Rather than judge me, he looked at me with love and understanding and offered to help. He told me I would be the one doing the hard work, but things could change. For the first time, I knew a life of debt and bankruptcy and poor money management didn’t have to be my story. I could break the cycle and change my family history.
I started by building a budget. The word budget always made me angry and sad – mostly because I was afraid of facing my harsh reality. Alas, I began the hard work. Here’s what I did…
1. I wrote down my monthly income. I get paid once a month, and though the paycheck may vary by a few dollars, I generally know what to expect.
2. I immediately allocated 10% to charitable contributions – I give to my home church as well as some friends who work in ministry which requires the raising of monthly support and also to a non-profit close to my heart.
3. From there, I wrote down every expense… Rent, Car Payment, Student Loan(s), Credit Card(s), Cell Phone, Insurance, Utilities, Gas, Food, etc. I was pleasantly surprised to see I even had some money leftover.
4. From there, I established a regular contribution to a savings account, regardless of how small, and even gave myself a monthly allowance of fun money.
5. Once debt was paid off, I move that allocation to other debt and to savings, so as to increase my debt payments and my savings.
6. In an effort to best monitor my spending on Gas and my Fun Money, I take out cash and have dividers in my wallet to separate the cash based on the category. If there is gas money left over at the end of the month – it goes into my fun money. For fun money, once the cash is gone, it’s gone.
7. If I happen to get an additional or extra paycheck, I generally tithe 10%, put 30% in my large savings and 30% in my small savings, and allow myself 30% for fun. Depending on the amount, I will change those percentages to also include an extra student loan payment.
In less than 2 years, I paid off over $13,000 in consumer debt, built up two savings accounts – and this was all while living within my means and faithfully tithing 10%.
I continue to live on the same budget I built almost 5 years ago. The dollar amounts have changed and some categories have changed, but I still do the same process every month. EVERY. MONTH.
This photo was taken in Santorini, on our ultimate dream vacation to Rome and Greece- a trip we diligently saved for and was about to pay for, IN CASH … with money left over!
Financial Health doesn’t have to be someone else’s story – regardless of where you are in the journey. If I can do it, anyone can. It isn’t always easy, and sometimes it is really hard, but the hard work is worth it. You can have financial freedom and have financial wealth – YOU CAN!