Spring has sprung, and that always has me thinking about spring cleaning! Have you ever considered organizing your financial life part of spring cleaning? Finances can be overwhelming to most of us, papers can take over, and it makes us feel stressed and disorganized. I’m going to show you had to literally organize the mess, and how to set yourself up for future success! 

Clean Out The Papers

This step may be challenging, especially if you don’t have a filing system in place already! It is worth it to take a day and get your papers organized into a system that works for you. Once you do this, every other year’s Spring cleaning (and tax time) will be so much easier.

Shred Old Documents

Anything you don’t need, including tax returns over 8 years old, make sure you shred them! A lot of financial documents have personal information on them, and you don’t want that to fall into the wrong hands! Recycle the shreddings

Make A Filing System

We have a filing cabinet that I store all our old tax returns in, receipts for major purchases like appliances, debt repayment documents, and mortgage documents. They are all labeled in folders.

I also have a smaller file folder where I keep receipts for everything we purchase all year. At the end of the year I get rid of everything we don’t need for tax purposes etc. I keep all our receipts just in case we need to return something, or I want to cross reference with my online banking. 

You don’t have to use the same system I do, make one that makes sense for you!

Check On Retirement Contributions

Another part of your yearly spring cleaning should be going over your retirement contributions. Are you saving enough? Should you be saving more? And has your risk tolerance changed due to your circumstances? 

These are questions you should go over with your spouse and your financial professional to make sure you are on track to retire when you want to.

Update Your Budget

Or make one if you haven’t already. Budgets should be living documents, growing and changing to meet your needs. 

We have been budgeting biweekly for almost a year now, and we budgeted monthly for about 2 years before that. 

Read more about starting a budget.

If you’re looking for a personal finance organizer, check out The Budget Binder! It will help you make a budget, track your net worth, save money and be more organized. 

Get the budget binder!

Update Sinking Funds

When updating your budget, go over your sinking funds and set some up if necessary. We have sinking funds for our power bill, travel, Christmas and a new car.

Some other sinking fund ideas are: 

• Kids sports fees
• House maintenance
• Back to school shopping
• Wedding

Basically anything that will be a large cost in your budget!

Read more about sinking funds!

How To Organize Your Bills

Spending a little time organizing your bills will help budgeting go much smoother. 

1. Write Them Down

As part of your budgeting, you should have all your bills written down and their due dates. This will make budgeting so much easier, because you won’t forget them! Don’t forget irregular bills like annual dues.

2. Change Due Dates If Necessary

I have a lot of my bills come out of my bank account every 2 weeks on payday. By having them come out on my payday, I can’t accidentally spend the money on something else and then not have enough to pay my bills.

3. Automate Savings & Bills

We also have our retirement savings, and sinking funds automated to move into different accounts on payday. It is easy to set up in online-banking. By automating our bills and savings we pay ourselves first, to make sure we don’t incur interest on our bills (and/or debt) and we are saving for the future.

Make Financial Goals

I have been making financial goals either monthly or quarterly for the past 3 years. Making goals helps you stay focused, and helps by giving you a sense of accomplishment when you finally achieve your goal.

Here are some ideas for financial goals

• Pay off debt
• Make / stick to a budget
• Save for a large expense like a house downpayment or a new (to you) car
• Sell items you don’t use
• Build your emergency fund
• Have a no spend week/month

Make A Debt Repayment Plan

One of your financial goals might be to make a debt repayment plan. We paid off $26,500 in 21 months by doing the debt avalanche method. Meaning we paid off the highest balance with the highest interest rate first. 

Some people prefer the debt snowball (the lowest balance) method. Either way, make a plan that includes paying the minimum balance on each debt, and then paying extra on one debt until it is gone.

Read more about debt avalanche vs debt snowball methods.

Get the debt repayment tracker emailed to you for free!

Final Thoughts

I know this seems like a lot of work, but it doesn’t have to be done all in one day! Spread out the tasks, and you’ll be much better off in the long run! This system will help you organize and save money. Happy Spring cleaning!

Unfortunately a financial emergency can happen to all of us, at any time. We see it all the time, people lose their job, get sick, get in an accident, or sometimes there’s an apocalypse and suddenly we can’t leave our homes. Ideally you prepare before these things happen but that’s not always the case! I’m going to walk you through what to do if you have a financial emergency and how to prepare for the next one.

Unexpected Financial Events

You know how one day everything is totally fine and then you’re hit by a truck? It happens! No one really expects these things to happen (that’s what they’re called unexpected…) but everyday people incur large expenses or income loss. Some examples:

• Car accident – need to replace or repair the car unexpectedly
• Medical emergency – hospital bills and loss of income
• Natural disaster – damage to your home & belongings
• Job loss – loss of income
• Divorce – loss of one income / lawyer fees
• Worldwide pandemic – loss of work 

See how often some of these things happen to people we know? This is how Walter White turned to making drugs… which made for great TV, but not so good if it’s your real life. 

What To Do During A Financial Emergency

There are really two types of financial emergencies: one time (large) expenses like a bill, and loss of income. Here’s what to do in each scenario. 

One Time Expense

If it’s a one time financial emergency like a car repair/replacement or a medical bill here are the steps to take:

Figure Out How Much You Owe – Add up all the bills associated with the unexpected expense

Look At Your Current Finances – How much do you have in savings that could go toward this bill? 

What Can You Do To Make Up The Difference – Can you work some overtime? Sell something that is sitting around? 

Work It Into Your Budget – If you know you need $500 by next month, then you’ll have to work on how to save $250 each paycheck (if you’re paid biweekly) Read how to biweekly budget!

If The Difference Is Substantial – If you won’t be able to make up the difference quickly, you’ll need to look into payment plan options, or in extreme cases; borrowing. 

Loss Of Income

If you’ve lost your income, or your income is reduced, here’s what to do:

Start With Your Budget

If you’ve already been budgeting then you’ll have a leg up, but if you haven’t you’ll want to start with figuring out how much your income will be in your new situation.  Read about how to make a zero based budget.

Prioritize The “4 Walls” – When starting to make your budget, make sure to prioritize the “4 Walls” first – Food, Utilities, Housing and Transportation. These are the things you absolutely need to make sure you have food on the table and a roof over your head.

Pause Sinking Funds – If you’ve been saving for Christmas, travel, etc. in a sinking fund then consider pausing to make your ends meet. Read more about sinking funds

Stop Extra Debt Payments – You may need to stop your debt snowball or debt avalanche right now in order to make ends meet. Still pay your minimum payments, or if you can’t, try the next step.

Negotiate With Lenders – Some lenders will be able to help you if you tell them your situation. You can usually defer mortgage payments (which adds them on to the end of your term), and you may be eligible for interest only payments on things like student loans.

Research Government Programs – You may be eligible for employment insurance (EI) which will pay you while you look for work. If you are off work due to a disability or sickness, there are programs for that as well. You can access local food banks to help you put food on the table. Please don’t be scared to get help if you truly need it, these programs are in place for a reason! 

Be Wary Of Loans And Credit Cards – For the love of all that is holy please do not go to a payday loan place. You will owe them forever, please please please do not go there. Also try to avoid using your credit card to make up the difference in income. You will have to pay it back eventually. 

How To Prepare For A Recession

What exactly is a recession anyway? Basically a recession is a decline in economic activity across the market for 2 or more quarters. It happens when the total value of the goods and services produced (called the Gross Domestic Product, or GDP) is in decline. Usually this comes with an increase in unemployment, a decrease in the housing market and a decrease in the stock market. 

A recession may be coming, but they are impossible to predict! If it does it may have an impact on your finances, especially if you lose your job due to cutbacks. It doesn’t have to be the end of the world, here’s what you can do to prepare yourself for a recession.

Pay Off Debt

One of the best things you can do to prepare for a recession is pay off your debt. If you can’t get it paid off, get it down as low as possible. Not having a debt payment while suffering a job loss will make life so much easier!

Build An Emergency Fund

If you don’t have an emergency fund, now is the time to think about building one. Never invest your emergency fund. If your emergency fund is invested 1) it’s hard to get to because you’ll have to wait a few days to withdraw, and 2) when the markets go down, so will your money. Keep your emergency fund in a high interest savings account where you can transfer the money to your main bank account quickly online. How much you’ll need is personal, and depends on your budget, but if you’re trying to save quickly, save as much as possible!

Remember your sinking funds that you may have paused? They can become emergency money too!

Read More About Emergency Funds

Live Within Your Means

Living within your means is how you’ll get through any financial tough times. As long as you do not spend more than you earn, you’ll be in a great place when the markets turn around. You may have to cut out things like travel, eating out and other non-necessities for a while in order to make ends meet. 

Read More About Living Within Your Means

Consider Upgrading Your Education

Now may be the time to upgrade your education or change fields. Consider fields that are in demand at the time.

Focus On The Big Picture

It can be scary to see the markets take a nosedive, but now is not the time to cash in your investments. Especially if you’re young and 10+ years away from retirement, think of it as “stocks are on sale”! You’ll be able to buy more shares which should be worth more in the future. Keep investing!

Final Thoughts

Financial emergencies and recessions can feel scary and impossible to recover from, but the reality is they happen to all of us and things can and do turn around eventually. 

If you plan in advance, you’ll be better able to respond when the next financial emergency hits. If you’re experiencing this right now, just know you are not alone!

What is Lifestyle Creep?

Basically lifestyle creep is what happens when you make more money, and you also spend more money. It often happens when people get raises because they have more income, they start spending more and more. It can start small, like going out to dinner more often, then buying more expensive clothes or shoes, then it turns into buying a fancier vehicle and possibly even a bigger house. As you can imagine buying a more expensive car and home can have a huge negative impact on your ability to save money. 

Even worse, some people use credit cards to spend more than they make. This is definitely the worst kind of lifestyle creep since you will have to pay it off eventually. 

But I Deserve It!

This is almost always the reason behind lifestyle inflation. You get a big raise, you work really hard so you deserve that (insert thing here… house, boat, fancy car, designer bag, etc.). No doubt you do work hard, but spending it on wants isn’t always the best way to use your money. You don’t have to stop shopping altogether, but balance is key.

How To Avoid Lifestyle Creep

Luckily there are so many ways to avoid lifestyle creep from negatively impacting your finances. Most of them are pretty easy to implement too!

Make A Budget

I’ve said it before and I’ll say it again, a budget is the best thing you can do for your finances. I do a bi-weekly budget and pay myself first by saving money every paycheck for retirement, travel, gifts, etc. By making a budget I know exactly how much money I am making and spending. By budgeting every paycheck I am checking in with my money often and I can make adjustments if necessary. Check out this Youtube video on exactly how I budget:

Budget In Fun

Not budgeting in any fun money is a surefire way to make sure you never stick to your budget. Every month my husband and I get some personal fun money, and we also budget in some fun activities with friends. You can make sure you budget in your coffee with friends, date nights and vacations, then you are not missing out on the fun but you are still accomplishing your money goals!

Automate Savings

Every payday we have money that automatically transfers into our savings accounts and retirement accounts. Making your transfers happen on payday means that you’ll pay yourself before you spend the money on wants. Automated means you don’t have to think about it!  Check out how I organize my money here: 

Take Advantage Of Employer Matching

If your place of employment has an RRSP matching program (Canada) or 401(k) matching program (USA) then you should be taking advantage of it! Usually your employer will match any contributions you make up to a certain percentage. If you contribute 6% of your income, that means any raise you get you’ll be automatically investing more as well! 

Keep Your Goals In Mind

Having a money goal helps you keep focused. When we were paying off debt we used this tracker on our fridge so that we knew we were making progress! Now that we are debt free, our big goal for 2020 is to save $10,000 for a new car! I love the charts from my friend over at Debt Free Charts, a lot of them are free! Start printing and watch your goals come true. 

Read More: How we paid off $26,500 in 21 months

Final Thoughts

Some lifestyle creep is generally okay, like going from living in an apartment with 3 roommates to living in your own home with a spouse, but the type of lifestyle creep where you are just buying more expensive items because you got a raise is going to significantly impact your ability to be financially independent and debt free. 

In reality,

It's not your salary that makes you rich, it's your spending habits - Charles A. Jaffe
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When I posted that we became debt free in July, I had a few people ask me if we are mortgage free too. In short, no we are not mortgage free, but we have made some changes to be mortgage free faster. First I’ll rewind to getting our mortgage, and then tell you what we’re doing now to be mortgage free faster and save so much on interest.

Getting Our Mortgage

We bought our house in September of 2015, just about a month and a half after our wedding. We did our home inspection a week before the wedding, and the night before I was faxing paperwork to our mortgage broker. I don’t recommend this timing! I am self employed so it can be a bit harder to get someone to lend you a lot of money. We had saved enough for a 5% downpayment and found a house we loved. Side note: I definitely would recommend saving more for a down payment. You can find all my advice for first time homebuyers here. 

We ended up getting a mortgage for $242,113.20 amortized over 25 years. Our interest rate is 2.64%, which we locked in for 5 years. If we paid monthly for 25 years we would be mortgage free in September of 2040! I would be 50 years old before becoming mortgage free. 

Changing Our Mortgage To Accelerated Bi-Weekly

The first change we made was a relatively simple one to make. In fact, if you do nothing else, I would recommend making this change because you’ll hardly notice it. We changed our mortgage frequency to accelerated bi-weekly. Meaning our mortgage payment comes out every 2 weeks, so twice a year we have 3 payments in the same month. If you get paid bi-weekly and line up your mortgage payments with payday, you’ll hardly notice the extra payment because you’ll also have an extra paycheck that month!

Just from making that small change in our payment schedule, we automatically shaved off  2 years and 8 months off our mortgage, but more importantly we saved $10,699.26 in interest! Can you imagine being debt free almost 3 years sooner plus saving over $10,000 in interest just with a simple switch to accelerated bi-weekly?! 

Need help budgeting? Read all about my zero-based budgeting method and grab a free budgeting worksheet!

Changing Our Payments

In January of this year, I decided to add a little extra onto our normal payments, by rounding it up a little bit. At that time our balance was $214,524.31. If we had kept going on our accelerated bi-weekly plan we would be debt free in 19 years from then. I decided to round our payments up approximately $50 biweekly, which brought our debt free date down by 2 whole years, and will save us $6389.38 in interest. 

If we continue paying $50 more biweekly we will be mortgage free in January 2036. Which is 4 years and 8 months sooner! 

The Future

Many people in the personal finance world are aggressively paying off their mortgage like any other debt but I felt it was more important to be saving for retirement so the magic of compound interest could work for us.

Of course interest rates will change and it’s impossible to know what the future holds, but I’m quite certain that we will be mortgage free before September of 2040. We will be renewing our mortgage in the coming year, so I’ll be sure to update you on what happens.

Pin it for later!

Holy crap you guys, we have been debt free for one whole week now! Of course I planned on writing this sooner, but the day after we became debt free I left to go to my hometown for a little staycation with my best friend while she was in town. I decided not to do any “work” which included not even picking up my laptop once. Sorry to keep you waiting!

First I want to thank you all for all the love we got this past week and throughout this whole process. I truly think that if I hadn’t put this blog out there in the world that we probably would not have stuck to our goal. Thanks for being our accountability partners!

I want this post to be a summary of our debt repayment journey, so I’m going to start at the beginning, if you’re more interested in what’s happened in the last 3 months, and what’s next, just skip down a few paragraphs.

Declaring War On Debt

In September 2017, this blog was only a few months old. Being a personal finance blog I was just getting my handle on budgeting monthly and I knew it was time to start tackling the debt. After we added it up, our total at the time was $26,556.64. If we continued to pay the minimum payment on that debt it would have taken us 7 years to pay it off. We decided we wanted it gone in 2 years or less, which meant we had to average about $1200 a month to pay it off, which was a good chunk of our monthly income. 

We decided to do the avalanche method to pay off our debt, so we set our sights on the National Student Loan which was $21,009.14.

Our plan was to budget monthly and always add any leftover money from the budget to the debt, as well as using any “bonus money” to pay it down faster.

Read Also: How To Make A Zero Based Budget

3 Months Of Debt Repayment

(October- December 2017)

The first 3 months of paying off our debt felt really good. We managed to pay $3395.58 in those first 3 months, which felt especially amazing because it was leading up to Christmas. We had a few bonuses because of a rebate from Efficiency Nova Scotia for putting in a heat pump (which we had paid cash for) and I had a mistake on my paycheck that lead to me getting $800 back. I remember going into 2018 feeling excited about our progress so far, and made it my goal for 2018 to be under $10,000 in debt.

6 Months Of Debt Repayment

(January-March 2018)

In the first 3 months of 2018 we were able to pay off another $4386.60, bringing our total debt down to $18,455.41. It felt so good to be in the teens! Our 3 pay month in December helped us put an extra $1400 on the debt in early January, and but then at the end of January we had no extra money to spend. In February we challenged ourselves to our first (and so far only) No Spend Month, which we were able to put an extra $1200 on top of our regular payment of $780.80. I also created the debt repayment tracker that month, which has been on my fridge ever since!

9 Months Of Debt Repayment

(April – June 2018)

In the second quarter of 2018 we were able to pay off another $3691.14. Those 3 months we didn’t do too much besides pay the regular payment of $780.80 and put a little extra money toward the debt. I had just gotten back from Vegas and we had booked a trip to Florida as well. Originally I had thought about not traveling during our debt repayment journey. The people who follow Dave Ramsey would have told me not to, but we decided that we were okay with traveling because we weren’t going further into debt to travel, and most of the travel money was coming from my tips anyway. 

I think it was around this time that I decided that personal finance is personal, and we were on track to meet our debt repayment goals, so we traveled!

Read Also: Why We Aren’t Following Dave Ramsey Exactly

1 Year of Debt Repayment

(July-September 2018)

At this point we thought we were half way into our journey, even though we had paid off more than half of the debt at that point. I was nervous to move up our debt free date in case we didn’t make it. In the 3rd quarter of 2018 we paid off $4450.12 by making our regular payments and putting all the extra at the end of the month on our debt. Summer is a little bit slower for me at work so I remember feeling discouraged by my lower income, but ready to make the most of my busiest season – leading up to Christmas.

15 Months Of Debt Repayment

(October-December 2018)

By the end of the year we were under $10,000 in debt, meaning I had hit one of my big goals for 2018. Thanks to a 3 pay month in November, we paid off $3645.66, so we were sitting at $6987.54. I had also sold some things online which gave me a little extra cash to put on the debt as well. Around this time I had started my Facebook community: Money Talks with Will Save For Travel, and everyone in there has been a great source of inspiration and support. 

Join The Money Talks Community on Facebook

18 Months Of Debt Repayment

(January-March 2019)

Going into 2019 I was certain that we would be debt free before September and I made my new goal to be debt free by the end of June. We didn’t have a lot of extra money these months so it was mostly just our regular payments plus an extra $200 in January. At the end of March we had officially paid off the National Student Loan and were down to just the Nova Scotia student loan, which was interest free. We owed $3812.30. I remember feeling excited that the National Student Loan was gone, but I also started to feel frustrated that we were not done yet. $3800 felt like such a small amount that I just wanted it to be over. I briefly considered draining my Tax Free Savings account which is my emergency fund to pay it off. Thankfully my Instagram followers talked me out of it, and we stayed the course. 

21 Months Of Debt Repayment

(April-June 2019)

I was pushing for us to be debt free by the end of June. I needed this part of our journey to be over, and it felt like it was dragging on forever. In April my husband got a tax refund of just over $1000 but I didn’t put it on the debt right away. We had drained our baby emergency fund to pay for repairs that our car needed, so I held onto his refund just in case something came up. In April we only managed to pay $650. May was a 3 pay month for us and I was excited to put a big chunk onto the debt, and we were able to pay $1665 at the end of May. By the beginning of June our balance was $1497.30 and I was trying to find a way to be debt free at the end of the month. I knew we weren’t going to have that much extra in our budget which lead me to finally using my husband’s tax refund to pay off most of the balance.

At the end of June my final payment would bring us to being debt free! Of course my regular payment date is the last day of the month which was a Sunday, and Monday was a holiday for Canada Day, so our final debt payment FINALLY came out of our account on July 2nd making us debt free! 

So, What About Your Mortgage?

I got a few comments online that we aren’t really debt free because we still have a mortgage. While I am inclined to agree with them because a mortgage is technically debt, we didn’t include it in our original goal because of 2 reasons: we would incur penalties to pay it off early, and it’s such a huge number I know we would get discouraged and give up.

Later when I found the Total Money Makeover by Dave Ramsey, he suggested tackling the mortgage after all other debt, and building a large 3-6 month emergency fund. 

I do plan on paying off our mortgage early but it’s not going to be a priority for us right away. We will be renewing our mortgage next year and at that time I plan to come up with a game plan to pay it off early. Right now our mortgage sits at $210,045.77. We are already paying it off faster by paying it bi-weekly.

What’s Next?

If we were following Dave Ramsey’s baby steps, our next step would be saving a larger emergency fund which would keep us from going into debt again if one of us were to lose our job or otherwise not be able to work. However that’s not really our plan. Our next goal is to save money for a new car in the next 1-1.5 years. We’ve had to do a lot of work on it this year and it will likely need to be replaced by then, so we are saving so that hopefully we won’t have to acquire much (or any) debt to get a new car! 

My next focus is also going to be on building our retirement fund. My goal is to increase our RRSP contribution to 10% of our income for now, since we are just figuring out budgeting after debt! Likely we will increase this in the future but I wanted to make sure there was some cash flow available for saving for the new car.

Overall it feels great to be moving on from the debt repayment journey. I can’t wait to see what happens next!

Share it to inspire others!

Right now our debt is sitting at $3162.30, or about 12% of our original debt. Being that we’ve already paid off so much, I would think that the last 12% would go by super fast, but unfortunately it feels like it is dragging on.

I think what’s making it seem so tough is that every dollar we can put on the debt makes a big difference. I have been hoping to be debt free by the end of June, but I’m still not sure if that’s going to happen. So this week I realized that I think we’re suffering from debt repayment burnout.

Debt Repayment Burnout

Burnout typically happens to those of us paying off debt. You’ve been working so hard and probably depriving yourself of things that you wanted to buy so that you can pay off your debt faster. I think it makes it easier to realize that other people go through this too!

Dealing With Debt Burnout

I won’t lie to you, the last month has been harder than I thought. But there are some things you can do to help:

Keep your eye on the prize

I keep reminding myself of why I want to be debt free, and what my life will look like when we finally pay off the debt! I can’t wait to travel more, and hopefully be more flexible with our time.

Celebrate small wins

We don’t do enough of this! Celebrating small wins can help keep you motivated because you really feel the progress. Just don’t celebrate by spending a ton of money

Track your progress

We have a progress tracker on our fridge! It is a great reminder to see how far we’ve come, and also serves as a reminder of our goals.

If you want your own debt repayment tracker, it’s available here with all my free resources!

Share your journey

I think one of the best ways to stay on track is to have a group of people to share your debt free journey with. Obviously I’ve chosen to share with all of you, but it could be a few close friends. Having people to talk to when you feel like spending can be so helpful. Check out #debtfreecommunity on instagram if you need some inspiration!

 

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Exciting news! I’m so excited that we finally paid off the National Student Loan! 18 months ago paying off all this debt seemed like a dream, but now we’re down to just $3812 left on the Nova Scotia student loan and hopefully that will be gone by the end of June. Couldn’t have done all of this without the support and the inspiration of the #debtfreecommunity! . . . #debtfreejourney #debtfreegoals #debtisdumb #debtfreedom #daveramsey #daveramseybabysteps #daveramseybudget #budgeting #thatbudgetlife #livingthatbudgetlife #budgetingtips #moneymanagement #personalfinance #personalfinanceblog #personalfinanceblogger

A post shared by Jenn Neilson (@willsavefortravel) on Apr 6, 2019 at 7:15am PDT

Budget in some fun

You can’t expect to go years without spending any money on yourself! Budgeting in fun is so important to staying on track. It may seem counterintuitive to spend money on fun things when you are in debt but depriving yourself for too long only leads to you rebelling and spending money eventually.

What’s Next?

We’re still working away at the debt! With this month having 3 pay checks, I’m still hopeful that we will be able to pay off a good chunk of what’s left of the debt! If you’re suffering from debt repayment burnout let us know in the comments so we can all cheer each other on!

I’m sure we can all agree that eating out and cable aren’t essential, but where’s the line? How much is acceptable to spend, and on what?

I’ve been saying to you for a while that I believe personal finance is personal. I also believe there is no universal waste of money. What you spend money on should be things that are important to you. Those things are different to everybody.

I love getting my lashes done, and to some that is a waste of money. To me subscription boxes are a waste of money because I probably won’t use everything in it.

How Much Should I Spend On Non-Essentials?

This will of course depend on your income, whether or not you have debt, etc. If you go by the 50/30/20 rule, then 50% of your income goes to essentials, 30% to wants, and 20% to savings.

If you don’t spend 50% of your income on your needs then you may be able to funnel a little more into wants.

That’s where I think this graphic is a little misleading. If you make $30,000 a year, then yes $18,000 is a lot of your income. But the “average american” income is about $56,000 a year, so $18,000 is about 31% of their income, meaning it mostly plays by the 50/30/20 rule if you assume that the other categories are allocated properly.

Read more about budgeting here

What If I Have Debt?

If you follow Dave Ramsey, then he would say that if you have debt you should be gazelle intense in paying it off. However I don’t agree, as you’ve probably noticed, we’ve been traveling while paying off debt. If you have a small amount of debt that you believe you’ll be able to pay off quickly, then maybe it makes sense for you to knock it out of the park for a few months. We knew we would take around 2 years and I didn’t want to be eating ramen for a year and a half in order to pay it off faster. Not giving yourself any money for wants for a long time may also cause you to binge spend, which isn’t good for your mental health or debt repayment progress. I’m a fan of the marathon-not-a-sprint mentality!

Why So Much Hate For Non-Essentials?

Personal finance bloggers and financial experts love to throw things like takeout coffee under the bus because people often say that they can’t afford to save, when in reality they are overspending on things that aren’t a “need”. While I totally agree with them, I don’t agree that you should have to live as frugally as possible in order to save money as long as your needs don’t take up too much of your budget. With a properly balanced budget you get to enjoy life and save for the future!

So What IS A Waste Of Money To You?

These graphics can be helpful if you use them to evaluate your own spending and see what you think a waste of money is. I think the best part of managing your money is that you take control and you can allocate funds into whatever you want. If you think $189 a month on drinks is ridiculous, then cut it out. If you meet friends for brunch once a week and love the quality time with them, then keep doing it (as long as you aren’t going into debt to do it)!

As for us, we’re going to keep traveling, going out to eat occasionally, and I’m going to get my lashes done because money is also for enjoying life, not just paying bills.

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All we have left now is the Nova Scotia student loan, which thankfully is interest free.

This was the main reason we chose the debt avalanche instead of the snowball, because the National student loan was a higher balance and was charging interest.

In case you haven’t been following along since the beginning, we started this journey in October 2017 with $26,556.64 in student loan debt. We made it our goal to be debt free by September 2019.

Want to read our other updates? Check them out here:

3 Months, 6 Months, 9 Months, 1 Year, 15 Months, Debt Free!

By December 2018 we still owed 6987.64. Today we owe $3812.30! I’ll break down how it went:

December: We made our regular payment of $780.80

January: We made our regular payment of $780.80 and then an extra $200 which was leftover from our budget for the month.

February: Made our regular payment of $780.80

March: There was only $283.30 left on the national student loan, so we paid that and then the minimum of $80.80 on the Nova Scotia student loan. We were also able to put another $200 on the NS student loan.

So What Now?

Well May is another 3 pay month for us so I’m anticipating putting another big chunk down on the debt. We should have our taxes done soon and if there is any return we’ll put that on the debt also. This month we set a lower grocery budget and took out cash to help us stick to the budget, so I hope there will be money left over this month as well.

I think with some sacrifice we’ll be debt free by the end of June! I can’t wait for this part of our journey to be over.

I couldn’t have done all this without the system we created to budget monthly and track our progress. You can get our worksheets by getting The Budget Binder on etsy!

To all of you that have been following along and cheering us on, thank you. It means so much to have this community behind us!

I’ve always been a frugal person, for as long as I can remember. My dad basically raised us that way. He was always a big influence when it came to budget and spending our money well. So I was very fortunate to have started off on the right foot. 

My debt began in 2009 when I started my first year of University in Moncton, NB. It was 5 and a half hours away from my small hometown in Cape Breton, which meant I had to find somewhere to stay and figure out how to manage my finances in a much bigger way. Thank God I could apply for student loans, because I definitely did not have enough money to pay for my tuition.

I was smart about it from the get-go. The biggest tip I can give someone is this:

Do Your Research

I wanted to know everything. I wanted to learn the difference between a student loan and a bank loan. And I wanted to understand what a line of credit was, and whether or not I would need one. Most importantly, I wanted to make the best financial decision I could, even before I started accumulating debt.

When it came time to make the decision, I went with a student loan. This was by far my best option. Not only could I wait to start paying after I had graduated, it also had the lowest interest rate – not to mention you can pay it over a (VERY) long period of time if you need to. I can’t say enough about the assistance the government offers to students and graduates. I wouldn’t be where I am today without the financial assistance program.

Want to read about Jenn’s journey to pay off student loans? Start here! 

Apply For Assistance

The worst thing that can happen is that you don’t quality. But if you DO quality, your life will be so much easier.

And speaking of applying, I highly encourage you to apply for any grants that you might be eligible for. That is a big reason why my debt is considerably smaller than that of my peers. I successfully received dozens of scholarships and bursaries throughout my years in University. Despite this, I still applied for student loans every year, half out of fear, but mostly out of preparedness.

I didn’t want to graduate with a university degree and have no money left in my bank account. I knew it would take time for me to find a job so I wanted to have savings. And since the interest rate is so low on student loans, I knew it was my best bet to receive the funds and save them up in a high interest bank account until I found a reliable income source.

Start Saving Now

It doesn’t matter whether you thought of saving in advance like I did. What matters is that you start saving now – whenever that now is for you. There is no wrong time to start saving. Things will only get better from here on out, and you need to make the necessary efforts if you want to see change in your financials.

I may have saved money throughout my years as a student, but that wasn’t the most challenging part. The hard part comes from saving money to be able to repay debt.

How To Save Money To Repay Your Debt

The three things that allow me to continuously save money to repay my debt is as follows:

–    Meal Planning

–    No Spending Challenge

–    Self Control

Meal Planning

I’ve written a LOT about meal planning over the past few years on my blog, Tiny Adventures Journey. To sum, it is an easy way to save money and reduce food waste. All you have to do is start planning. (As a side note, I offer meal planning services to help people get started and stay on track with meal planning!)

No Spending Challenge

You can find more information about No Spending Challenges over on my blog as well. It’s more of a short-term goal to help reduce (or eliminate) shopping habits.

Self Control

It’s a tough battle, but we all need to practice and work on our self control. This ties into both meal planning and no spending challenges. If you don’t learn how to self-discipline, you will never succeed. So start with one thing at a time, and take as long as you need. But don’t give up.

Carmen LeBlanc is the owner and blogger behind Tiny Adventures Journey. She writes about sustainability, minimalism and frugal living, among other things. The goal she and her boyfriend are currently working towards is to finish building their Tiny House, documenting the whole process and the experience of living in it afterwards. Follow her on Facebook or Instagram to learn more.

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Pay Off Your Debt

The first step to being outside the norm is getting out of debt. We are getting close to the end of our debt repayment journey and I’m SO excited! You need to decide that debt is no longer an acceptable way to get the things you want. We still use credit cards but always pay the balance, and since credit card debt was never our thing, we decided we felt okay keeping them. If you’re in credit card debt, you may want to cut those things up while you get a handle on things!

Pay Cash For Your Car

This seems crazy but hear me out on this: you do not need to have a car payment. I know car payments are widely considered a “normal” part of life, but what else could you do with a couple hundred dollars a month? We plan to save for a new car after our debt is gone.

Dave Ramsey advises people to pay cash for a “beater” car, then keep saving. When you have enough, trade in your beater car and use the trade in value plus the cash you’ve saved to buy a nicer one. You can do that until you have the car you want!

Pay Off Your Mortgage Early

Not many people can save enough to buy a house in cash, but you don’t have to have a mortgage for 25 years! Even paying your mortgage biweekly instead of monthly shaves years off your amortization period. Buying a smaller home helps too!

Go Without “Normal” Things

How much money do we spend on things so that we “fit in”? Or look good on instagram or whatever? I used to spend a lot of money on things that were popular, but now I’m looking for quality.  

Live like no one else until you can live like no one else
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What are you willing to change to be financially free?