How I went from not quite being able to pay off the credit card each month to zero credit card debt and more than $1700 in extra student loan payments every month

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It started in an airport. I was traveling for work and I had left the library book I was reading in the seat back pocket of my previous flight...I had three more flights to go and an overnight stay in a hotel by myself in a town where I knew no one. A new book was essential to my personal survival over the next 36 hours. I headed to the airport newsstand. Immediately my eyes alighted on You Are a Badass at Making Money by Jen Sincero... and a choir of angels began to sing. A higher power compelled me to buy this book. 

It was quick read - I finished it during the course of that short work trip - and it changed me. Those pages made me think differently about my life in general, instilling both a fierce desire to constantly self-improve and “go to the spiritual gym” as Sincero puts it. I resurfaced from those pages with an unshakable determination to stop being broke.

My poor husband didn’t quite bank on picking up a different wife than the one he had dropped off at the airport two days previously, but he got on board with the let’s-not-be-broke plan with only minimal nagging.

Nothing happened at first other than I felt awake and alive to new possibilities. And perhaps that’s why, a few weeks later, I stopped cold when I came across one particular Instagram post. A friend does bullet journaling and she had ‘grammed a photo of the following quote in her lovely calligraphy: “People treat money like sex...they don’t talk about it.” -Liza Witonis. My client had tagged this Liza Witonis’s insta handle and I clicked through to learn she was a “wealth coach” that specialized in working with women and couples.

In Sincero’s book she talks a lot about getting a life coach (granted, a smart business move for someone who makes her living as a life coach), and while I hadn’t seriously considered this piece of advice, I still went to Liza’s website and signed up for the free consultation call. During that call with Liza I felt instantly at ease and as I was telling her my story - mountains of student debt, can’t quite pay off the credit cards, my brother’s upcoming wedding in Mexico and having no idea how to pay for the trip - I started crying. I hadn’t realized how much money stress was weighing on me before.

I became convinced that hiring Liza was a good idea. We hadn’t been able to fix our money problems ourselves and putting a little skin in the game (i.e. putting another $2500 on the credit card to pay her fee for six coaching sessions) was a way to ensure that we actually change our habits and do the work to get ourselves into a better situation.

The process was psychological (examining our history, language, attitudes, and habits surrounding money) and practical (she gave us the BEST spreadsheets for budgeting and tracking debt payoff). And we did do the work. We discovered what was important to us and what wasn’t and how to allocate our spending according to our values. We learned that a budget is a living document and now we create a new one monthly and interact with it almost daily. And we realized that budgeting, while it sounds restrictive, is actually incredibly liberating.

At one point between sessions I wrote to Liza to ask for book recommendations. I could feel that the fire created within me by You Are a Badass at Making Money was beginning to die down. She recommended The Total Money Makeover by Dave Ramsey and now I’m a devotee. The results have been truly remarkable.

Using Dave’s plan with Liza’s patient, kind, and softened approach to guidance we have paid off both our credit cards, a personal loan from my mom (that was more than 10 years old! My poor, patient mother!), and a more than $10,000 toward that mountain of student debt for a total of $17,661 paid off in just six months. We also have a $1000 emergency fund saved, monthly savings goals toward less-than-monthly expenses (like Apple Music, doctor visit copays, and routine car repairs), and we saved everything we needed for a six-day trip to Mexico for my brother’s wedding. It was amazing...and actually, traveling while actively tracking my budget made the whole experience way more enjoyable because I knew there wouldn't be unpleasant money surprises when we got home!

So happy and relaxed in Mexico cause we paid for the trip in cash!

We are also actively working toward helping our four-year-old son to be a personal finance whiz from an early age so that he doesn’t find himself in his parents’ shoes. (In fact, we’ll be starting Brain Arts’ Financial Literacy for Preschool-Aged Humans next month, so stay tuned!)

On next week’s blog we’ll be interviewing Liza so you can get insights directly from her, but I’ll close with the top five things that helped us get on a better, and way less stressful, track with our personal finance. 

1) You need to make a budget every month and stick to it.

This is non-negotiable. And it’s actually pretty fun (especially if you derive a weird sort of pleasure from spreadsheets like I do). But best of all? This has been the number one thing that has minimized our stress and fear surrounding money. Don’t just have a vague idea of where your money goes (or worse, find yourself wondering where it went) TELL it where to go and set yourself free.

2) It doesn’t make sense to keep money in a savings account when you have debt with a higher interest rate.

We had always had the notion that we should be saving, and we were, but what we didn’t realize is that our savings account (where we were saving money for ourselves and our son’s college fund) is actually losing money. Not only does its less than 1% interest rate not even come close to the amount of interest we’re accruing on our student loans (not to mention what we were accruing on credit cards) it doesn’t even keep up with inflation (about 4%). So we took what we were saving for our son and put it in a 529 plan, and then put our other savings toward our debt, paying off our credit cards and a big chunk toward my mom in no time. Now we’re not worried about interest on those debts because they are gone! Hooray!

3) Get your values in order.

I was appalled when I realized how much we were spending on restaurants and take-out...and we don’t even do it that often! What’s more, we don’t really CARE about eating out. We weren’t doing it for the experience, or because we’re serious foodies, we were doing it for convenience and out of laziness. When we put the kibosh on meals out we found that we don’t even miss it, and we’re saving SO MUCH MONEY. It just wasn’t that important to us. What are you spending money on that’s actually not that important to you?

4) Learn to tell yourself no with goal-setting.

When I was courting my husband (and I was really broke then) I decided to get all his family and friends together to pitch in to buy him a new (and much-needed) laptop computer (complete with Adobe Creative Suite, Microsoft Office, a carrying case, and a heavy duty external hard drive). I personally pledged $500. This was a big challenge for me and $500 seemed like a huge sum, but I found that when I had that goal in mind it was easy to walk by my favorite mani-pedi place untempted, and it was a snap to tell myself I didn’t actually need an iced tea with dinner, that water was fine, or to say no to eating out in the first place and eat at home instead. When you have a specific financial goal in mind it is much easier to tell yourself no to all the little temptations that might slow your progress.

5) Speaking of progress, track it.

We have a complex debt payoff spreadsheet that we look at regularly and we also have a simple piece of paper on our fridge where I update each month how much we’ve paid off. It’s hugely motivating to see how far we’ve come.

Even though we still have a long way to go (the student debt mountain is really no joke), we have a plan, and we are making progress. And most importantly we are back in the driver’s seat when it comes to our finances. We are in charge of our money, our money is not in charge of us and that feels AMAZING.

So tell us - what are the things that help you stay on the right track with your finances? What’s your financial literacy journey?

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