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At FinCon19 we spoke to Jen from The Budget Bounce about her experience paying off her debt. Here’s what she shared –
We have paid off $42,000 so far, to the end of August.
We paid off medical bills, we paid off auto loans, we paid off a few credit cards and in there, partial payments to a family loan, back child support. We have not paid anything on student loans yet, that is coming next year.
We really were forced into it. We are the statistic of the family that had a lot of income but was not managing any of it. We did not have a budget for 9 years, and we were slowly moving towards the tipping point where things were going to get really ugly and it was slow moving. Then my husband got sick. In the first paycheck, we had nothing in the bank, we had no check from him and we could not pay off all of our debt payments. We actually did not change anything for 6 months, it got worse and worse. Then I had my “sick and tired of being sick and tired” moment when I got 7 collection calls before noon on a Saturday. I broke down in front of my husband and said: we have to go on a budget. Once we did that, we were able to start cleaning up our debt. We had to get control of that.
My husband was really sick and I could not talk to him about this at all. I was very private about what was going on, the only people that knew about my husband not working and being sick were my parents, my sister, and her husband. I finally had to tell my manager because it was affecting my performance at work. That was it, I was not talking about it. It was weighed down so heavily and I needed and outlet. When I had my moment in January 2018, I went to Youtube, looking for Dave Ramsey stuff, and I saw real people talking about their journeys to get out of debt. I though I do not want to talk to my family about this and I do not want to talk to my husband so I will do this. I pulled into work one morning and pulled out my phone and just started talking for 2 minutes and that was my first video.
I have a couple who email me regularly to give me updates on their progress. I have had people tell me that “your story is so inspiring”. We had $252,000 in debt when we started, so we paid off $42,000 of that – which is a very large amount. People are thinking “I am getting crushed under $80,000 in debt, how can I ever possibly do it.” The fact that we have such a very large number is very encouraging to those folks. This was regardless of what was going on, because things were still coming crashing down around me. At the time I started my channel, I could hardly get through a video without crying. They are seeing that I was very transparent about that, and despite all the odds it can be done. Some are out there already doing it. Other come to me and say “I found you and now I know there is hope.”
The very first thing you need to do is have a budget. I know it is such a bad word, and has such a negative connotation for so many people. But a budget can save you, it literally saved us. I had been on one many years before and it worked great, when I was single. WE had never done it as a couple, and 9 years of not doing that, led to the mess that we were in, because we are two spenders. Whether you are a spender or a saver, you have to give every dollar a name and an assignment. You have to put it to work. If you are not doing that before you are getting that money, it is going to do its own thing. A budget is absolutely crucial.
After that point once you get an idea, it takes a couple of months to figure it out, where am I actually spending my money. Then you need to focus on , how can I get my debt paid off faster. If you feel it is going to slow, you have to think, what if I throw an extra $20 on it. Then you look at your categories and figure it out. I am not saying stop the lattes – that is getting a bad rap these days right? I am saying where can you do better? In general. Every $5 or $10 that you do better each month adds up over time, and before you know it you will get so much momentum and it will be easier. Whatever things you thought were so important before will no longer be that important later, because you debt will become your focus once you get some momentum.
I think it is very important to talk to you kids about the decisions that you are making with money, you do not have to give them all the details and of course it has to be age appropriate. But once they start in junior high and high school they comprehend a lot of things that are not being said.
So the thing that we did when my husband got sick – our youngest was still living at home, and we talked and we decided that we needed to be very open with him. Of course he knew that his father was ill, but to understand the impact this was having on us financially. We did not decide to have this conversation until we got control of things. So that spring of 2018 we actually sat down and had a conversation about the mistakes we had made and about the things we were doing to try to fix it and what impact it was going to have on us as a family including him. He bought into it, so I think that is really important. You can start that much sooner than we did. You can start it very young, have those age-appropriate conversations so they understand what the ramifications are, what are their choices and the consequences or benefits of making one choice over another.