Making a budget is not an easy or very fun thing to do. Most people refuse to do it for various reasons. My reasoning was I thought I could make all the calculations in my head. I thought I could know an average amount of what we spend on regular bills and an average of what we spend on food. I figured with some self discipline both me and my husband would only spend money on essentials with very few wants in between. I am not too proud to admit that I was wrong, very wrong.
Me and my husband were constantly worried about finances. It was on our mind all the time but we never wrote it out. That just created a constant worry if we could afford certain things. When we weren’t sure if we could afford it we said, “Put it on the credit card and we will just pay it off as soon as we can”. That was also a big mistake because all we did was build up debt that we weren’t even sure if we could pay back anytime soon. We were living off of more money than we were actually making.
It got even worse when we had home project difficulties. We had bats flying around our bedroom, living room, basement, etc. We had a leaking roof and unfinished closets just adding to the bat problem. Medical expenses because of a bat that attacked me in the middle of the night. We were at our wits end with all the unexpected repair costs and stress. All we did at the time was rack up more debt in the attempt to solve the other stress related problems.
Let me backup and share some details with you that could be enlightening. We didn’t realize we had a problem with finances. We thought we were in control. We had some student loans, we only had one credit card a piece, and we had a mortgage when we first got married. At the time we thought, who doesn’t have student loans, credit cards, and a mortgage these days. We will work to pay them off like everybody else.
We eventually gained two vehicle loans and some house project loans during the whole crisis with the bats. Each time we gained a new loan I tried my best to brush it off by saying, “We are still doing ok, and we will work to pay it off soon”. I never really calculated exactly what each of these loans would mean for us in the long run. Each loan or line of credit is adding interest. We are paying more for each item/service in the end by having to delay payments over a longer period of time with a loan or credit card. If we had saved the money before making the purchase we would have paid less.
Our biggest problem was I never really ran the numbers by writing them down on a piece of paper or on a budgeting app. I want you to see how something so simple can build up so fast. I thought I had all the numbers down in my head but I really didn’t even grasp it at the time. Here is the debt I accumulated to give you an idea of where I was and where I am today.
When I got married in 2018:
My Average Credit Card $200
Average Husband Credit Card $1,000
My Student Loans $33,500
My Husband’s Student Loans $9,702
Mortgage $160,050
Total except for the mortgage: $44,402
Total: $204,452
When crisis hit in 2019:
My Average Credit Card $3,000
Husband’s Average Credit Card $2,000
Transferred Money To My Dad’s Credit Card $5,000
My Student Loans $25,270
Husband’s Student Loans $8,502
Roofing Loan $7,891
My Auto Loan $8,050
Husband’s Auto Loan $9,413
Mortgage $155,000
Total except for the mortgage: $69,126
Total: $309,252
Total in April 2020:
My Credit Card $0
Husbands Credit Card $800
Transferred Money To Dad’s Credit Card $2,867
My Student Loans $19,017
Husband’s Student Loans $7,907
Roofing Loan $0
My Auto Loan $4,384
Husbands Auto Loan $7,948
Mortgage $153,927
Total except for the mortgage: $42,923
Total: $196,850
The only reason we have been able to pay off as much debt as we have was because we worked harder. We asked for help from our families who took on some of our debt or gave us money to repay it. Which is humiliating and sad that we even had to ask for help. We had higher basic living costs than we had income each month at some point. When I realized we were digging ourselves into a pit I started writing out a budget. It was then that I realized our income wasn’t enough to cover the expenses. That is when we developed a long term and short term plan of how to get free from the overwhelming debt.
The long term plan is to get out of debt so we no longer have those expenses each month. The short term plan has to be reworked every month. Every month we decide where to spend all of our income. Each month we figure out what category needs more of a budget to spend than others. We cut corners wherever we can and save money each month. Sometimes that means turning off lights in the house, unplugging electronics from the walls, taking shorter showers, and reducing food waste. All of which is obvious but not convenient to the average lifestyle we were living before the year 2020.
Yes, we are still in debt. Yes, we are still paying it off. It takes time and work to get yourself to a place where you can be happy with your lifestyle and be debt free. You have to sacrifice the higher things in life now to have freedom later. I discovered that fact when we were at risk of not being able to pay our mortgage and we thought we might lose our home.
That is how I had to go broke before I agreed to make a budget. When you get to that turning point I hope you will learn to make a budget so you can one day live debt free with emergency savings. I plan on being completely debt free one day. Until then I will consistently work hard to pay off that outstanding debt to get closer to the end goal. Debt can build up faster than you can pay it off, that is why you have to write down the numbers. Do yourself a favor, pay off your debt and don’t add to it or you could lose everything you hold dear. Just like we almost did in 2020.
