I found some things I could do on the side to help bring down my debt faster using my hustle, but I also had to learn how to manage my main source of income. This involved creating a budget,finding strategies to stick to it, and finding ways to conserve as much money as possible.
There are a lot of different perspectives on budgeting online, and ultimately I had to make a plan that worked for me. Enter google sheets. I used google sheets because it gave me access to my budget on the go and was similar to Excel. I created multiple pages on the sheet. One page was devoted to my budget for the next 6 months and another page was a running list of my credit cards and their balances so I could keep track.
At first budgeting was extremely challenging, more from mental/emotional position. I knew HOW to budget, but I had so many credit cards I could only devote small amounts my main source of income to each one. This is why my side hustle was so important. My side hustle helped me quickly eliminate line items in my budget that were credit cards.The more credit cards I eliminated, resulted in more “disposable” income I had to contribute towards my remaining credit card debt. When I started my journey I had about 20 different line items, 11 of which were credit cards. Now I am down to eight, two of which are credit cards.
One money management lesson I have learned is that I need cash in my wallet to spend on things like gas, groceries, household items (laundry soap, paper towels, etc.), small inexpensive meals out, over the counter medication, make-up, etc. Things that are hard to account for and track. It might seem like these are not a big deal, but believe me they add up. These items account for 15% of my total monthly budget. I call this line item “cash for expenses”, and at the beginning of each pay cycle I pull that amount of money out in cash. Until I get all of my debt paid off it is the same amount every month. By pulling out cash, I can easily see how much is leaving me and how much I have left to last me until my next payday. It also forces me to time my purchases ensuring I only get what I need from the store until my next pay period.
I also had to learn to curb my spending habits. I LOVE TARGET!!!! But every time I went to Target, I spent money on nonessential. I would justify this because I had their red debit card, which saved me 5% and I used their cartwheel app, which saved more money. Saving money was awesome, BUT I really wasn’t saving money, because I was buying non-essential things like a pair of shoes or a sweater. I learned there is a BIG difference in saving money on purchases vs. saving money in your wallet. This meant, I had to stay away from Target. If I didn’t it was torture and put me in a very vulnerable position.
I also had to start cooking at home, which I love. Enter the grocery delima. I also LOVE PUBLIX. At first I thought, well I am spending money on food which is a necessity, but I was spending as much on food as I going out to eat. This wasn’t helping me accomplish my goal. I had to find a way to conserve as much money, while getting the groceries I needed. I wasn’t willing to give up Publix completely, so I subbed in Sam’s Club for some of the items I need and used frequently. I now buy things like meat, toilet paper, paper towels, trash bags, coffee, and milk from Sam’s Club. It was very easy to blow my entire discretionary budget on one visit to Sam’s, so I had to space out my purchases. I also watch the Publix ad and other grocery items from them like veggies, coffee creamer, and side dishes. A note about Publix BOGO’s…Do the math! Sometimes buying their store brand is actually cheaper than the sale. For example: 1 bottle of Publix brand ketchup is 1.59, but they have a BOGO on Heinz Ketchup 2/$4. In this case, the Publix brand of Ketchup (as long as it is the same size) is actually the better buy.
The final thing I learned is that my budget could not be 100% lean, it had to have some fat in it from time to time. Meaning, there were a few times (and by few I mean two) I made conscious decisions to spend money on nonessential items. One of those items was a bike and another was an annual Disney pass. I knew if I was going to make it to my goal, I had to “cheat” a little, but with each of these items I thought about making the purchase for about 3 months before actually going through with it. I selected these two items because they would provide a long lasting impact. The bike was $100, and the annual pass was around $400 total-a $100 initial fee and $25 per month for 12 months after that. Each time I did this of course, my financial coach (aka Daniel) was not very happy, but the bottom line was it was my money and my decision.