6 Debt Lessons from Readers // Debt Free

>> Wednesday, September 6, 2017

I wanted to take today to thank all of you for your advice on our money situation. So many readers have either commented on the blog or Instagram, or sent me private messages about what they did to start their own debt-free journey. It’s helpful for a few reasons. First, it makes us feel much less alone. I don’t know why, but we sometimes assume we’re the only people dealing with money issues. We see people jetting off on expensive vacations, buying much fancier houses, sending their kids to snazzy private schools, living vacation fantasy lives, etc. and we assume we’re the only people in the red.

But you know what they say about when you ass--u--me things.

In the end, it’s good to focus only on us because that’s what will get US out of debt. I think focusing on other people can only be harmful in some ways because -- despite how we’re pretty good at avoiding this trap -- there’s this whole peer pressure component to life, right? Keeping up with the Joneses, even if you aren’t in that game. It sort of filters into the subconscious. Of course my kid should have X, Y, and Z. Of course we deserve X, Y, and Z. But a lot of this stuff means living above means, etc.

As a silly example, Stephen and I are both feeling like we should not have immediately gone out and replaced our central air system last year. I know why we did -- we had just brought Eloise home, my hormones were saying YES WE NEED IT NOW, and we had grown accustomed to having it, like many other people have in our area. But if we’re being honest, we could have popped a few window units in the bedrooms and probably been fine. After all, that’s how I grew up. That would have cost a few hundred versus a few thousand . . . and we may have been able to borrow some from family or friends for a year or two while we surveyed the options.

I digress.

The second reason it helps to hear from you guys is because some of you have DONE it. You’ve gotten out of debt, gone through the trials, and come out the other side to tell the tale. Hearing success stories and the hard work it took to get there is inspiring. Anyway, I wanted to condense some of the best tips/advice we received into a nice 6-point list.

// 1: Do get creative 

One reader pointed out that her house went up in value significantly since she bought it. She considered selling and using the profits to pay off debt. This is interesting because it’s something we’ve considered doing as well. We love our home, but we often feel like we could be happy in a smaller, less expensive house. That said, our own property value has stayed relatively stagnant, so I don’t think we’d gain much this way. Regardless, I thought this example was interesting. If you’re really in debt, you can do creative things . . . and even turn your thinking upside down about life. This is one reason, for example, the tiny house movement is so popular.

Other readers warn that investments like houses may be good ones to hold onto, especially if getting rid of your home significantly affects your quality of life. It’s a hard balance to strike. And this is just one way of getting creative. We’ve experimented with becoming a one-car family in the past. It’s something I wish we could stick to, but our area isn’t exactly pedestrian friendly and Stephen is gone a lot of the time for coaching.

// 2: Do give up extras

This is one area where I feel like we cycle between good points and bad. When you’re paying off debt, just cut the fat already. Stop going out to eat. Stop buying random stuff to fill your house or that emotional void (emotional shopper here!). Do pitch everything you can toward debt -- even if that means using Christmas money, etc. for a while. This isn’t to say you can’t EVER enjoy the finer things in life. But I know myself, and I often give into the whole “I deserve this” because of some insignificant accomplishment or pure laziness. Make meals at home, seek out free entertainment, keep your eyes on the debt-free prize.

// 3: Do remember that “small sacrifices add up”

I suppose this extends on the last tip, but it’s a different way of looking at just denying yourself things. A reader shared on my Instagram that “small sacrifices add up” and I liked that train of thought. It’s more positive than STOP ENJOYING EVERYTHING. Even if you can piece together one additional payment through giving up your daily coffee habit, it’s worth it. Gather together those pennies where you have them to save.

// 4: Don’t deplete savings. 

One of the popular debt-free methods encourages people to completely pay all money to the debt monster. But many of you shared that keeping zero or even just $1,000 in the bank for emergencies seemed like too little, especially with a family or house, etc. I agree.

How much should you keep? It’s personal and depends on where you live, your life situation, etc. Some say to keep $3,500. Others like to have a $5,000 safety net. We personally have about three months of our living expenses in our bank account. The reason for some much is because my income is variable. It’s tempting to shift this money around . . . but I feel like we’ve run into bad luck and needed these funds.

// 5: Do consider getting help

One reader mentioned that she and her husband see a financial advisor. I don’t know why this isn’t something we’ve considered in the past. But the advisor helped them figure out a game plan for attacking debt according to interest rate charges. Not only that, this advisor was also able to help the couple allocate funds toward their 401K and pay minimums on debt . . . but through some financial magic earn more interest on the 401K than was being charged on the debt, if I’m explaining that correctly.

// 6: Don’t get discouraged

This might be my favorite piece of advice. Don’t get discouraged if progress is slow. You may not be able to pay off massive amounts quickly. I feel like we’ve all seen the stories of paying off $100K in like six months. For many most people, this just isn’t feasible. Heck, we don’t quite make that much money . . . in a year. So not amount of scrimping or saving would give us that type of wild success.

Another reader explained that debt ebbs and flows throughout different stages of life. Don’t look at all setbacks as failures. I think that’s a good point to end this post on. If you have more to share, I’d love to hear you thoughts in the comments! I would like to add more of the tips into a part II post -- the next one will be some more specific things people shared about their debt-free adventures.

Happy Wednesday!

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