I don’t know about you, but I didn’t grow up learning about financial responsibility. As a kid, that’s “adult stuff” and as a teen, I was too focused on going to the mall, slumber parties, being a nerd, and if so-and-so liked me back. I didn’t get to think about budgets, credit, bills, savings, and what any of that stuff was going to be about. I had my first job, and sure, I started to take on more responsibility. I had to pay for my first car to get fixed every single time it broke down (97 neon coupe, and it was a glittery green that should be illegal). I was able to buy Christmas gifts for the first time. I could pay to get my nails done. Ooh. I was learning nothing.
Then I went off to college and learned more nothing about financial responsibility, because I GOT GRANTS AND SCHOLARSHIPS FOR EVERYTHING. And then during the Summer semesters, my financial aid office was so kind as to provide me with LOANS of both the subsidized and unsubsidized varieties. I had no idea what any of it was, really, other than I would pay them off when I got my big paychecks with my big degree. Fair enough. Thankfully I didn’t go too deep in the hole with my loans, but in college I still didn’t understand what it was like to live within my means because my means were defined for me. This dorm. This cafeteria. This tuition.
Out in the big, real world, I started to have a lot more choices and pressure. Real pressure. If you add that to any kind of emotional turmoil, which I had plenty of, then you have a recipe for financial mistakes. We tend to rush instead of plan. We tend to jump instead of think. And then we get to fix our messes, and it takes double the effort it would have taken to prevent them.
All this to say, at 28, my big goal is to be debt-free by 30. I don’t have a husband or kids yet. I have a job that pays me more than my current overhead costs, which means I have extra to pay things off with. But I’ve gotten radical.
And I’m writing this particular blog today because TODAY, I paid off one of my bigger debts accounts! And it’s gone. Gone forever. Now let me give you some tips of what I’m doing that is helping me. Here are my 10 helpful tips.
This seems like a funny place to start, but forgiveness is where it’s at. I had to forgive a lot of people for a lot of things that got me here, at 28, striving to get financial freedom. I had to forgive myself for not knowing better. I had to forgive those who were supposed to teach and model this stuff for me, and didn’t. I had to forgive those who contributed to my mistakes. I had to forgive people who took advantage of me instead of helping me. Lots of forgiveness. And when you can release the shame, anger, and judgment off of it all, you become spiritually debt-free and THAT is the most important thing. Jesus paid it all, and I get to say ‘amen’ to that.
Yes. I do believe God has the resources to help me in ways I will never understand. He has looked into my heart and has decided that He loves me, and I have decided that I will trust Him to help me with everything. Both the things I can’t do by myself and the things that seem to fall on me to do. I prayed and passed my tests in college. I prayed and got the job I have. I prayed and He has given me help that is truly miraculous, financially giving me “deals” and rebates and sometimes unexpected checks in the mail. He’s given me fresh ideas, too. And He’s taught me to live on less… which is my next point.
America will tell you to buy stuff and have lots of stuff and when you have too much stuff, to get a storage so you can keep your stuff! If you let materialism guide you, it’ll guide you to debt and messiness and hoarding and frustration. Media will never tell you to save that money or to give away things. Be well aware of what you value as important and why. I started questioning my motives before making purchases, and that helped me a lot! I stop to ask myself if I need it, if I really like it, and if it agrees with my goals. Do you feel like you have a lot of stuff? It’s helped me to go through and give away my excess: lots of clothes, shoes, books… I made sure I’m not hoarding anything. Now, I have room to see what I need, and I feel more organized… which is the next point!
4) PULL THE ROOTS
I looked at my life and I found parts of it that were out of order! Frustratingly so. And I got to dig into those issues and find the root causes of why those parts of my life were out of order.
I found that for the most part, I kept making very spontaneous decisions that were throwing off my goals. I would randomly go out of town, for example, and then get tired, then get frustrated that my room was messy because I kept having to pack and unpack, and oh where did that extra money go (gas, food, etc)… see the problems here?
I needed to ask God why on earth I felt like I needed to make those spontaneous decisions and what I learned is that I didn’t feel satisfied. And also that I think it’s the most fun to be spontaneous. So… I got to pull those 2 roots out: one being that lie of not being satisfied in Christ, having a quiet night at home. Second lie is that only spontaneous things are fun: which isn’t true! I can plan for fun things instead (more on that in #6). What are some places in your life that are out of order? What are the root causes?
5) LOVE YOURSELF AS YOU ARE
Confession: I thought that I HAD TO get my nails done, have a tanning membership, get my hair highlighted (the expensive way), and that these things were necessities because I was born female. And 4 months before I went on my big mission trip, I realized with a sinking feeling that I had been wrong. Yep. That was old me. I wanted to compare myself to others and win. I wanted to feel prettier. Stronger. Skinnier. Tanner. I wanted to be more put together than others, so that I could feel like I wasn’t the total loser that sometimes I truly feared I was. And ya know what? Insecurity was super expensive.
After God helped me to understand my worth in Him, I went 3 years with my natural hair color, no fake nails, no tans, and… I felt beautiful and I saved some major cash. I recommend the freedom. And now I dye my hair red for fun. Do you find yourself spending money because of insecurity? I promise you that you’re better than that. Take great care of your body, rest, eat healthy, exercise, and trust that God made you so beautiful, because He definitely did.
6) PLAN AHEAD
This is where the rubber meets the road: I started to really plan ahead. That included FOOD, TRAVEL, COFFEE, FUN. Those were my four main spending categories that truly truly leaked my extra cash if I didn’t plan ahead. It is imperative that I eat. But that means I need to eat what’s in my pantry, and cook ahead. It’s FUN to plan ahead, though! I get to choose my menu of what I’ll be eating that week, and then follow through. I can try new recipes. And buy things I like at the store.
Planning ahead also means I put ‘travel’ on the calendar and have a budget for it! And when my Starbucks gift cards run out, I get to manage my coffee budget, because one thing is right: I reward myself. I like to go see movies, and find myself in new cities. God has given me an adventurous heart. But it doesn’t have to translate to reckless spending, and I can make space for adventuring every once in a while. Next month, I’m going to a wedding in North Carolina, and I’m so excited! I’ve already planned and set aside what I’ll need, and it’s not “out of control” or what I would call “spontaneous.” How do you plan ahead? Do you reward yourself?
7) KNOW YOUR SITUATION
For me, it helped to get all my accounts in front of me, to put my budget together, and look at it all in the same place. I did that through my amazing bank, Wells Fargo, which has a “my spending report” feature online. What also helps me stay on budget is Dave Ramsey’s website. I do pay the monthly fee to have access to his software for the Total Money Makeover, but it’s really great to keep up with everything in one place while I’m managing debt repayment.
Dave Ramsey has also released a free budgeting tool called Every Dollar, and he has lots of free resources on hand. It’s much, much better to look at your spending rather than to avoid it. ALSO: part of knowing your situation is taking responsibility for your cost of living. You can downsize. You can rent out a room. You can cancel certain bills that aren’t needed like, CABLE. You’re paying to live where you do, and if it’s too much, move somewhere smaller or more affordable.
8) EDUCATE YOURSELF
If you have a financial question, like whether or not you’re ready to buy a house, or if you should consolidate all your loans…. educate yourself! Don’t follow in blindly. Don’t go in with no plan. Honestly, I’ve learned a lot when it comes to making financial decisions from Dave Ramsey’s resources, and I highly recommend his articles. I currently rent, so I don’t have a mortgage to manage at this point. If that’s you, then get information so you can make decisions according to your situation.
On the flipside, educating yourself is also a huge part of financial freedom. Do you have the degree/certifications to do the job that you truly want to do? You should invest in that, and yes, it is an investment of both time and money, but it does pay off to get a job that you enjoy and that can put you on a whole other pay grade. I’m thankful to be able to use my degree and what I studied to do, and it was definitely worth the while for me.
9) EMERGENCY FUND
This and Jesus. You guys. Having a $1k emergency fund has saved me so many times. Oh, I need a new tire. Oh, I have to pay a deposit. Oh, I have an obligatory random chunky expense and ouch… it’s not coming from my checking, and it’s not coming from my credit card. It’s this third, miraculous place that holds: dun dun dun… emergency cash. And you put it back. You put. You put. You put. IT. BACK. As soon as you can, and you forget about it. You don’t even think about it. Shhh. It’s not there. GET AN EMERGENCY FUND. No joke. If you have a family, the recommended amount to have tucked away is proportionate to your expenses for 3-6 months. Again… it has saved me, big.
10) TARGET DEBT
So this I learned from Dave Ramsey, but you should have a particular method to paying off debt. He recommends the “snowball” where you pay your smallest debts off first, putting all your extra money (after you have your emergency fund) toward the smallest debt and paying minimums for the other accounts. Then, once that first debt is paid off, you do the same with the next smallest. That creates a snowball, where you’ll find yourself making some huge payments on your very last debt. Also, you feel like you paid things off and there’s a momentum and excitement, because accounts are actually closing along the way.
I did something a little bit different and I paid off first one of my debts that had the biggest interest rate. So now that’s paid for, and I’m back to the snowball method! What’s your method of targeting your debt? Are you being intentional and paying more than the minimum?
These are 10 things that helped ME. They may not relate to you, but I wanted to put them out there anyway. I didn’t have this advice when I was younger, and I wish I had these tools sooner. My personal goal is to eliminate extra bills so that I can get more prepared for life transitions and babies and all the things that are coming up in God’s timing, and so that I can be powerfully generous with finances. I pray that God will help you in getting all the financial breakthrough you need, so that you can turn around and bless others in their times of need.