Mindful Tips for Getting Out of Debt
Our friends Fred and Emily Miller got themselves out of a lot of debt, and did it pretty quickly. Their story is pretty amazing/inspiring so I asked Emily to share some of their suggestions for changing your life to simply your money. Here's what she shared, enjoy! -Allison Rhea
Why get out of debt?
Sometimes I’m floored by this question. American culture says debt is fine, and even that a little bit is necessary.
Here are just a few reasons why it’s better to be debt-free: debt brings more risk, less flexibility, and less guilt-free dream-following.
I’ve met people who said they were “sticking it to the man” by following elaborate dreams and just paying minimums on their debts. But when I was in debt, that was my definition of slavery: reaping all the rewards now, but paying for them forever instead of just once.
This post isn’t to persuade anyone that getting out of debt is a good idea. But for people who do want to become debt-free, I can at least share the story of how we got out of debt.
1. Keep your goal at the front of your mind.
Without goals, your motivation dies. For me, being debt-free was the goal in itself. I could look at a cookie (most days) and say, “No, I want out of debt more.” The goal motivated me to change my spending.
It took my husband Fred about four months into our hardcore, debt-ridding journey before he found his motivation: he wanted to be able to invest. The thought of doing all this painstaking penny-pinching just to save for a house or a retirement fund was boring for him. But investing motivated him. He would look at his own cookie (aka: guitar gear) and say, “No, I want to invest more.”
2. Do what’s sustainable.
Eliminating debt requires some serious sacrifice. You have to find your pieces of sanity. I wasn’t going to be sane if we were lackadaisical about our debt, but I also wasn’t going to be sane if we never indulged a little. The dollar theatre, hour-long trips to Anderson for a Frisch’s hot fudge cake … not glamorous, but they were fun. When gas is cheap, take a sanity drive. Whatever it is, make your mental list and hold tight for however long it takes.
It took us about 13 months when we really put the pedal to the metal to get rid of $30K. We’re DINKs (Double Income No Kids), but even so, life got in the way of our plans. So in the nitty-gritty of it all, we wavered between a combined income of $54k and $73K that year. We had just graduated college, so we just kept living as if we hadn’t, money-wise: We kept a slim budget and didn’t upgrade too quickly to “adult status.”
3. Find a good tool.
And we used Simple Bank. Simple Bank should hire us. We’ve turned so many friends on to how easy it is to use for a budget. You know Dave Ramsey? Simple is Dave Ramsey 2.0. You have a debit account, and you can allocate money in your account to virtual envelopes (Simple calls them Goals - how fitting!!). When you spend money from your account, you can debit that cost from a specific goal. You have a “Fun” goal of $150 a month? You bought yourself that cookie instead of boots – let’s say a gourmet one, just to make it interesting – for $5. You now have $145 in your “Fun” goal.
That easy. No cash, envelopes, or calculating. Just cold hard proof that you need to slow down on eating out, or you find leftover money that you could be putting toward your debt!
There are some things though that Simple can’t do for you, like staying realistic about your budget. Pull out all the bills, even the ugly habits that you have, and then challenge each one. Is it your sanity or is it your crutch?
4. Give Yourself Grace.
Finally, learn to forgive yourself when you misstep. This was the hardest part for me, but operating out of guilt the whole time is not going to make being debt-free quite as sweet as enjoying the journey to get there.
My apologies that this isn’t a strict outline of the perfect budget for getting out of debt. But this is what you’re going to go through. The process is shaping me and still teaching me things. But most of all, don’t make it a chore. Make it a season, a goal, an adventure.