When I committed to starting my debt free journey and setting my future self up for financial success, I had to change a lot of behaviors. Making these changes are the essential first step in changing habits around money.
Success with money tends to be more about mindset than math. Behavior plays a huge factor in determining the state of someone’s personal finances, and many people are blind to or refuse to change their bad behavior in order to put themselves in a better financial position.
Why Do We Make Poor Financial Decisions in the First Place?
So many of us make poor choices due to our egos: we want to drive nice cars or take vacations or go out to restaurants because we feel we deserve these things, even if we can’t afford them. But at what cost? Don’t we deserve financial stability, not living paycheck to paycheck, peace of mind about retirement?
For others, it could be due to poor mental health. Sometimes it’s too exhausting to get out of bed and cook. Pushing a few buttons to get a McDouble chauffeured to your house is way easier.
I really had to dig down and remind myself that any sacrifices I make now will benefit future me. As much as I love going out to eat with friends, I love sticking to a budget more. As much as I loved driving my Charger, I love not having to make monthly payments more.
So what do I do differently now? These 9 things have impacted the progress I’ve made on my debt free journey so far:
Track Every Dollar In and Out
This step is non-negotiable for me. Every purchase, every transaction, every payment gets logged in my budget. I log my income, expenses, and debt payoff progress on my crisp, color-coded sheets.
Budgeting holds me accountable and ensures my money does what I want it to. Check out my budgeting template and see for yourself. If you have no idea where to start or even what to include in a budget, check out The Beginner’s Guide to Budgeting.
Have an Emergency Fund
Not having an emergency fund is a recipe for disaster because if disaster occurs, it’ll be made even more disastrous if you have no money on hand and have to go into more debt. Now that’s what I call a disaster!
I started with a $1000 emergency fund and it’s grown to about a month’s worth of expenses. The goal is to save up at least 3-6 months of expenses just in case anything unexpected occurs. Always be prepared!
Order Groceries Mostly Online
With food being as expensive as it is these days, I’m doing all I can to save money on groceries. If you’re an impulsive shopper and buy whatever fancies you regardless of what’s on your list, it adds up fast.
Lately I’ve been ordering my groceries online using services. It’s helpful to simply search for items I need, which really cuts down on adding extra goodies to my cart. Delivery fees can add up, but they may get waived if you spend a certain amount. Just make sure you’re only buying what you need, not adding extra to not pay for shipping.
Bring Lunch to Work
I used to buy my lunches from a cafe in my office building and justified it because I was “only” spending $5 or $8 or $13 at a time. Pretty good deal for lunch, right? But those small amounts culminate over the course of a month.
So instead of spending an extra $100 or so per month, I pack my lunch. Now, I can make multiple servings of a meal, have some for dinner and take the rest for lunch, all for about $3 per serving.
Do My Own Hair/Nails
I would love to get my nails done every few weeks and have a professional dye my hair for me, but the cost adds up. I decided it wasn’t worth it for me to continue paying for these services at this stage of my life.
I’ve cut those expenses out and simply started doing them myself. I do my own nails and I’ve recruited my boyfriend to dye my hair. The only service I still pay for is getting a haircut every other month, which is about $40-$50.
Plan Expenses In Advance
Whenever I can, I try to plan out upcoming expenses so I’m not surprised. If I know that I need an oil change or have to buy a birthday gift for my mom or take one of my cats to the vet, I will write it into my budget for that month.
I can’t always anticipate every expense, such as getting a red light ticket (f*ck you, Nassau County) or paying a copay for an emergency trip to the doctor, but planning as much as I can in advance helps keep me from going over budget.
Make Multiple Payments
Throughout the month, I make multiple principal-only payments on my debt. Rather than making my extra payments in one large sum once a month, I spread it out to help reduce the amount of interest that accrues.
Keep My Savings in a HYSA
For years I kept my savings in a regular savings account which earned a pitiful amount of interest. Less than 1%, in fact. This did absolutely nothing for me or my money.
I did some research and transferred my savings to a High Yield Savings Account (HYSA) which earns me 4.35% APY. I store my emergency fund in this account and instead of just sitting there, it earns some interest while still being accessible if I need to make a withdrawal.
Don’t Listen to Broke People
This may sound harsh, but I don’t listen to broke people when it comes to money. Now don’t get me wrong, I’m technically broke myself and have a negative net worth. But if someone isn’t actively trying to improve their financial situation, I have no reason to take their money advice.
I want to listen to people who make good financial decisions and have similar money goals as me. I’ve listened to bad advice in the past, simply because I was uninformed and thought being in debt was normal and fine. Never again. It’s not to say these people are bad, but they may not recognize how their mistakes have affected their finances, and I can’t have bad advice slowing down my debt free journey.
My Progress in My Debt Free Journey
Now that I’ve incorporated these 9 things into my life, I’ve seen a big improvement in my financial situation. I didn’t do everything all at once, it happened gradually over a period of months as I learned, researched, and found what worked for me.
With the same trial and error, you can find what works for you. No one’s financial situation or debt free journey looks exactly the same. We all have different circumstances, needs, and goals. The important thing is making the changes to set yourself up for future financial success.