(Originally posted on The $76K Project on 10/25/2017)
Although I started writing this blog back in June, we officially commenced our debt repayment journey six months ago, in April 2017. Our financial overhaul was inspired by a sudden, deep desire to offload our $76K in debt (consisting of credit cards, student loans, and a small car payment) so that we didn't have to go through our entire lives with that weight on our shoulders.Something needed to change. We made a plan, constructed a budget for the first time ever, and dove in. Somewhat miraculously, we've stuck with the process for half a year. We've made plenty of mistakes along the way, but we've also made significant progress, something we'll share in more detail at the end of the month.
Maybe you're at that point, too. Maybe you're ready to take action and ditch the debt. If so, this post is for you. We can hardly call ourselves financial experts, but we do feel like we've learned some lessons that might be relevant to others who are on a similar path or who want to start their own debt-destroying journey:
(2) Budgeting is key. It's key for us, anyway. It helps us plan out our expenses and avoid accidental overdraft of our bank account (something we used to do on a fairly regular basis). It took us a while to configure a workable budget - the first two months or so were admittedly a bit of a mess - but nowadays, we know what our monthly bills entail and when they're due, and we're taken by surprise far less often.
(4) Debt repayment requires difficult, sometimes painful decisions. As it turns out, when your salary is limited and you have debt repayment goals, you can't have everything you want. For instance, Fortysomething would love a new iPhone to replace the cheap flip phone he bought when his old phone died, but it's just not in the budget right now. (He's a total tech geek, so the whole flip phone thing is quite un-fun for him. I don't blame him a bit for feeling that way.) Vacation to a distant locale next summer? Probably not. New work clothes to replace my worn and fading work shirts? It can wait until the new year. Rental car when we visit relatives over Christmas? Nope, we'll just have to ask my dad if we can occasionally borrow his minivan. Fewer dinners out? Just the way it is now.
(6) A side hustle can be a game changer. I've written extensively about our side hustles, gigs that bring in a few hundred extra dollars each month. Our regular income doesn't leave much room for savings - so instead, we use our side hustle earnings to beef up our savings account (once we reach our savings goal, the extra cash will go to debt repayment). It's a lot of extra work, and it's totally decimated my beloved evening Netflix veg fests, but I regret none of it. Aside from generating extra income, it gets my mind off of my regular job, gives me a chance to do something I love, and makes me feel more job secure. I highly recommend a side hustle if you're paying off debt.