Our Debt-Free Journey: The First Six Months
Isn’t it amazing how quickly time flies when you’re on a mission? Here we are, six months into our debt-free journey, and the changes are so exciting! If you missed the first post in this series, you can find it here.
If you’re like me, you’ve probably felt the weight of financial worries—maybe even found yourself wondering if there’s a light at the end of the tunnel. At this point, it still seems pretty far away, but we can see it!
When we first began this journey in July of 2024, our total debt was just under $40,000. Credit cards, a car loan, and a stack of medical bills are all tangled up in that number. It felt overwhelming for sure! But here’s the thing: we’ve managed to pay off almost $10,000 of that debt in just half a year. How did we do it? Let’s dive in.
A New Financial Mindset
First, we needed to change how we thought about money. It’s so easy to fall into a cycle of spending without really thinking about the long-term impact. Have you ever bought something just to feel better in the moment? We were guilty of that too. But we realized that we would be happier to be debt-free. For the most part, we’ve stopped what I consider “frivolous” spending. We actually plan our spending, and it helps!
To get started, we asked ourselves: Do we want to have to work forever? (No, we do not.) What are our financial priorities? (To be debt-free and to have enough savings to live a comfortable, but simple, life in retirement.)
These questions helped us align our spending with our true goals, rather than give in to impulse buys. Basically, we needed to redirect our money from impulse buys and unnecessary purchases to debt payments. We do not want any debt going into retirement. That’s a pretty good incentive to manage our money well. If we still have debt, I’ll have to keep working.
The Role of the Clever Fox Budget Planner
Enter the Clever Fox Budget Planner, our trusty sidekick in this financial adventure. Please don’t roll your eyes at the thought of another planner. I know I’ve mentioned how much I love this planner before, but I think it’s amazing! It’s not just about jotting down a bunch of numbers; it lets me see our progress, helps me plan ahead, and keeps me motivated.
Using the monthly budget planning pages, I can see exactly where our money is going and make adjustments. (Like when Princess CocoPuff the chihuahua needs dental work.) I don’t know who designed the Clever Fox Budget Planner, but I’d like to give them a great big hug!
Increasing Our Savings
While tackling debt was our main goal, building a healthy savings account was just as important. We wanted to create a savings to avoid derailing our progress with unexpected expenses. This would include things such as the dishwasher breaking and needing to be replaced, and the dog needing veterinary care. This account also covers things that are occasional expenses: the car insurance that is due every six months, the homeowners insurance every quarter.
Did you know that 40% of Americans would struggle to cover an unexpected $400 expense? We didn’t want to be part of that statistic. I loosely follow the plan in this book to figure out how much to save each month for occasional expenses. It’s an older book, but has some ideas that are useful.
Currently, I manually transfer money to our savings. I’m planning to set up an automatic transfer to our savings account every month, to remove the temptation to spend that money elsewhere.
Cutting Costs Without Feeling Deprived
Reducing expenses doesn’t mean cutting out all the fun in life. It’s about making smarter choices. The first step was looking closely at our monthly expenses. We already didn’t have all the streaming services. We only pay for one. Cutting it out would have broken Grampy’s heart! We don’t stop by the coffee shop. We make coffee at home. One of our downfalls is the restaurants. Grampy loves them. I love doing DIY projects, and thrifting for things for our home.
Honestly, I don’t care for restaurant food most of the time. Our solution probably wouldn’t work for everyone, but we each have an “allowance” for the month to spend however we wish. So if Grampy wants to go to a restaurant, he does. He always gets takeout, brings it home, and enjoys it in his comfy recliner while he watches a show. I’m happy because we aren’t overspending on restaurant food, and he’s happy with his combo plate of Mexican food. If I want to go thrifting or buy supplies for a project, I use the money set aside for it. This way, we avoid overspending, but can spend a little on things that make us happy.
I’ve also been incorporating some new recipes into our meal planning. It can be easy to get stuck in the rut of making the same few meals, and so I’ve been trying to change it up. Have you tried exploring new recipes with your family? You may find a new favorite!
A note about groceries…
I changed from a monthly amount for groceries to a weekly amount. This keeps us from having nothing left in the budget during the last week of the month. To keep things simple, I lump groceries, personal care items (shampoo, over-the-counter medications, etc.), cleaning supplies (laundry soap, dishwasher tablets, etc.), paper goods (bath tissue, paper towels, etc.), and pet food and supplies all into the groceries/food category. This also includes if we go out for a meal together or with the kids or grandkids.
I raised our grocery budget through the holidays and am now lowering it. I’m also planning meals to use up what’s in our pantry and freezer, as well as incorporating more soups, stews, and chilis.
As a home childcare provider, I am reimbursed for two meals and one snack for each child per day through the Child and Adult Care Food Program. I buy the groceries for my daycare with our groceries and use the standard meal deduction for daycare meals on my taxes. Trying to separate out what is just used for the kids would be way too much work! When I receive my reimbursement, I subtract that amount from my grocery spending at the end of the month. I feel like doing this gives a pretty accurate amount for what we spend for groceries for Grampy and I.
Roadblocks Along the Way
Of course, no journey is without its bumps. We’re getting older, and there are medical bills for this and that. Fortunately, they aren’t huge bills that are adding anything to our current debt total. We can pay them in full when they come in. It just makes a bump in our budgeting road to have extra bills come in. It was painful to do, but I’ve started budgeting more for medical bills each month, and lowering spending where possible in other categories.
One of the biggest challenges for me when budgeting has always been maintaining motivation. It’s easy to start strong, but how do you stay committed? I have a terrible habit of starting strong and then sort of drifting away after a while. It hasn’t happened so far. If anything, I am even more inspired. I think it’s helpful for me to have a date that we plan to become debt-free. It helps keep our “why” in focus.
Granny’s Tips for Your Journey
If you’re considering starting your own debt-free journey, here are some tips based on what worked for us:
- Reflect on Your Financial Values: Understand what is truly important to you. This will direct your spending and saving decisions. What you do with your money today is important for tomorrow. The saying “Save for a rainy day” is good advice!
- Utilize Tools Like the Clever Fox Budget Planner: Having a tangible way to track progress is invaluable. Find a tool that works for you and use it consistently. You can write out all the budgets in the world, but if you don’t go back and log your spending, make adjustments and keep planning, it’s hard to make progress.
- Automate Savings: Make saving a non-negotiable part of your budget. Even small amounts add up over time.
- Review and Adjust Regularly: Life changes, and so should your financial plan. Set aside time each month to review your progress and make necessary adjustments. And log your expenses at least weekly! It’s easy to trick yourself into thinking you haven’t spent “that much” on little things.
- Stay Inspired: Whether through quotes, a vision board, or a supportive community, find what keeps you motivated.
Embracing the Journey
As we look back, the first six months of our debt-free journey have been amazing. We’ve not only reduced our debt but also gotten a deeper understanding of our financial habits and are working to change them for the better. The journey is ongoing, but the progress we’ve made has us feeling hopeful for the future, and excited for retirement!
If you’re on a similar path or considering starting, know that you’re not alone. If you’re facing a large amount of debt, it can be scary to start. Remember, it’s not about perfection, but progress. Just start. Even the act of starting is progress. Celebrate every step forward, no matter how small, and keep your eyes on the goal. Your future self will thank you.
Until next time, happy budgeting!
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