If paying off your debt quickly and finally having a savings is a goal yours, help is here.
Kendall, from Perfect Cents Living, gives tips and tackles mindset issues that are probably hindering you from reaching your financial goals in this episode of the Real Happy Mom Podcast.
Check out the post below or listen to the complete episode using the links above.
Kendall is an everyday wife and mom that finally looked at her finances and saw that she and her husband made an excellent combined income, but couldn’t understand why they were struggling with money.
When at tax time would roll around, Kendall would see the final number for their income and think where the heck did it go?
On top of that, they had about $41,000 in debt. After taking a serious look at their finances, budgeting, and making some changes, Kendal was able to pay off $30,000 in 12 months.
From this experience, Perfect Cents Living was born.
Perfect Cents Living in a finance blog that teaches how you properly manage money so that you can get ahead with your finances and reach their big money goals.
The blog also helps Kendall to stay accountable to her finance goals.
From her blog, Kendall developed a coaching program where she helps women all over the world with their finances.
How to get on the same page with our spouse when it comes to saving and paying off debt
More and more women are handling the finances in the home.
If your husband is not on board with changing financial habits to reach significant goals, that is fine.
When Kendall first started her financial journey, her husband was not on board with what she was initially trying to do.
It wasn’t until Kendall’s husband saw her dedication and commitment that he started to take notice and started to buy-in.
So, what should you do if your husband is not on board? Just get started.
Just start like implementing any type of positive changes in your finances that you can think of whether that’s creating a budget. Whether that’s just becoming aware of your finances.
Or making an extra payment towards debt or transferring an extra 50 bucks to savings. Whether that’s anything like anything that you can start to see a positive change in. Just start.
Over time your husband will see what you are doing, and it will open the conversation up about finances.So, what should you do if your husband is not on board with saving and paying off debt? Just get started.Click To Tweet
Another thing is to have a conversation about money.
Many times when moms are the ones handling the finances, it can get overwhelming with doing the budget. Or maybe you feel like your husband is not supportive, but it actually that he doesn’t know what is going on.
Just simply saying, “Hey, I would love it if we would like to sit down together and try to figure this out. I’m a little bit stuck in this area.” Or something like, “I would love your input on this.”
These kinds of statements open the conversation, but it doesn’t sound like you are nagging.
Plus, men always love to help and find solutions.
You want to remember not to have that conversation if you’ve just got home from work, and you’re both tired and exhausted. Don’t bring it up.
Be mindful of what’s going on when you bring up the conversation. Try to set aside a set time for both of you to meet together for a money date.
Set up 10 to 15 minutes to talk about your finances, goals, any areas that you’re struggling with while on the money date.
How to save and not pull from savings every time something comes up
A lot of people encounter this problem where there they’ll transfer money to savings and then it doesn’t stay there.
They keep pulling from it. They’ve gotten a little bit overzealous with transferring the money.
Then at the end of the month, the money that was initially there isn’t there anymore.
To help with this, you have to sit down and budget all of your expenses so that you can see how much you can save.
Even if you can only transfer $10 to savings to get started, that’s a start.
The biggest thing to note is your savings account is not going to grow unless there is an emotional attachment to it.
So having savings to have a savings account isn’t a good enough reason.
What are your reasons for saving?
Do you want to have a nice vacation?
Do you want security and know that you have 3, 6, or 9 months of living expenses in savings?
Are you saving for a down payment on a house?
Are you saving for Christmas gifts?
You want to be able to have a reason for saving so that you are more likely to save and get excited when your savings start to grow.
Change the name of your savings account on your bank account so that you know what you are saving for.
Like “2020 trip to Tahiti” or “Down payment on a dream home.”
When you see that you’re like, Oh my gosh, yes, give me all my money. Like putting that in there, you know? So that’s a really fun trick to kind of trick your brain to get that money into savings.
When I changed the name of my savings account to the “Christmas Fund,” that’s when things became fun.
At first, I was putting $20 or $50 in the account every time I got paid.
Then I started noticing that the balance was an odd number. So I would try to find ways to make the account an even number.
Then it became a game to get to $500 or $1000 as fast as I could.
When you ask yourself, “what do I have to do to get the account to $500”, your brain will start to find ways to bring that account balance to $500 for you.
So instead of thinking, “I will never get my Christmas account to $500,”, think “what can I do to get my Christmas account to $500.”
Mindset changes to tackle debt
One thing that I hate thinking about is my student loan debt.
Before talking to Kendall, I avoided looking at the number because I would have panic attacks.
I felt like my student loan debt was so massive that I would never be able to pay it off in this lifetime, at least.
Kendall shows that the first step to tackling debt is to be aware.
Many times the reason why people struggle with their money is that they don’t know their numbers.
Become aware of the balance, the interest rate, and monthly payment can go a long way.
Next, you want to know the amount that you owe in student loans and know that that number is just that—a number staring back at you.Reframe your thoughts and beliefs about the debt. Instead of thinking about how terrible your student loans are, remind yourself that you were able to get an excellent education. Or you're able to go to your dream job.Click To Tweet
Then you want to reframe your thoughts and beliefs about the debt.
Instead of thinking about how terrible your student loans are, remind yourself that you were able to get an excellent education.
You’re able to practice the profession of your dreams.
Or maybe it allowed you to gain experiences that are helping with your job today.
I think I have a very different approach to debt than a lot of people. I believe that your debt is neither good nor bad. Like what makes it good or bad is what we believe about it. So that’s kind of why you’ll never find it like a, um, like a consistent argument for what is good debt and what is bad debt.
Take time to reframe your mindset and the way that you think about debt.
Once you have your mindset in check, it is time to start taking some action.
I know that some people don’t think that a $5 payment or a $10 payment doesn’t make any difference. So they think, why even do it? But it really does over time. You have an extra five bucks, put it on your student loan. Yeah. It really does add up in the long run.
Use a tool like Undebtit to estimate how long it will take to pay off your debt based on the different payment amounts.
You can play around with the payment amounts and see how much an extra $10 payment would make. Or if you used your bonus to pay down the debt, what would happen.
Also, you want to surround yourself with people that have the same goals as you.
If you don’t have friends or family members that have the same goals, connect with people on social media.
Utilize the #debtfreecommunity on Instagram to get inspiration and motivation.
A twist to the snowball method of paying off debt
The snowball method is a method for paying off debt that Kendall used to pay of $30,000.
To do the snowball method, list out all of your debt from the smallest balance to the largest balance.
Don’t pay attention to the interest rate; only look at the balance.
While you’re making the minimum payments on all of our loans and credit cards, start with the lowest balance first and try to make as many extra payments or larger payments on that as possible until it’s paid.
Once that first balance is paid off, you take all that money that you were paying towards that small balance, and you apply it to the second one.
So now you can make a larger payment on the next balance.
Every time you pay a balance, you apply the payment that you were making to the next balance. Over time that amount gets bigger and bigger and hence the snowball.
The snowball method is a popular method used by Dave Ramsey.
Although Kendall believes that Dave Ramsey’s methods work, she doesn’t feel that there’s a one size fits all approach to personal finances.
Plus, personal finances are just that. Personal.
Kendall believes that you can still have a beautiful lifestyle and pay off debt.
Versus the Dave Ramsey method, which suggests eating rice and beans and living on as little as possible.
Kendall was able to pay off $30,000 in debt while still maintaining her lifestyle and traveling often.
Like we didn’t change our lifestyle that much like that during that year that we paid off that 30,000. We took our honeymoon that year.
So we went to Ireland and Scotland and my husband went to Costa Rica for a bachelor party. We went to North Carolina. We live in California. Then some camping trips.
So all of those cash paid not on credit cards. Cash paid just by managing our finances better.
In addition to the snowball method, Kendall made sure to budget and managed her finances wisely.
Many times when people hear the word budget, it is usually a negative feeling associated with it.
The reason why people don’t budget is that they think it’s way too restrictive and they don’t want to live that way. When in reality, that’s like, it’s the complete opposite. Like a budget gives you permission to spend. It’s not restrictive at all.
If you are ready to get serious about your finances, take Kendall’s Wealthy U course with me.
Links mentioned in this episode
- The episode on Christmas prep and savings
- #debtfreecommunity on Instagram
- Snowball Method – Dave Ramsey
- Perfect Cents Living
- Kendall on Instagram – @_kendallhamilton_
- Kendall’s course
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