We read a lot of personal finance blogs. No joke.
While reading them, we marvel at the resolve that some bloggers had toward getting their finances where they want them to be. It takes a lot of work to keep your budget in check, and grow your savings.
So, in honor of these amazing people, we decided to start a series, Financial Journeys, where we’ll take a minute or two to ask our favorite bloggers how they got to where they are and what they learned while doing it.
To start, we spoke to Fabulously Broke, who is a shopaholic, but also a saver. She writes over at Fabulously Broke in the City. She got out of $60,000 in debt in what seemed like the blink of an eye.
Read on to find out how she did it.
Q. So when did you realize you had a financial problem?
When I graduated. I actually started before I had my official graduation, and when I opened the student loan numbers and totaled everything up, it was around $60,000 of debt.
They also made it so it would span over 10 years, and even then, it was a debt repayment of around $800/month.
That’s when it hit me — I am earning $65,000 gross as a salary per year, but I have to pay back $60,000 while trying to pay for rent, food and living expenses. I just knew I didn’t want to be paying a loan for 10 years, especially at $800/month with the interest rates it was at (5% and 7%).
Q. What was the most important thing you did to reach your goal?
I started a budget and started tracking my expenses. It was eye opening how much I thought I was spending, in comparison to what I was actually spending. It was like night and day. I’d assume it was $150 a month for food, when in fact I was spending $300. Things like that.
Other things that helped: I read PF books (The Millionaire Next Door), and that’s what sparked my realization that the path to wealth and getting out of debt was not to make lots of money, but to be smart about your purchases, cut back on spending and save.
After that, I started a blog – Fabulously Broke in the City – chronicling my debt repayment, and it helped keep me on track, plus elicited a lot of support & help.
Financially, I lucked into a job that was 100% travel. So I traveled a lot, and as a result, the client was paying for me to live in the city to be a consultant. After I got rid of my apartment and became a bit of a minimalist modern nomad, that saved me a lot of money on food and living expenses (the basics), for a while.
Q. Did you make any mistakes while working on paying off your debt? How did you overcome them?
Plenty of mistakes. I didn’t understand how to be frugal — I was never taught, and I didn’t even know the word existed. In the beginning, I was spending on things that I shouldn’t have purchased, because I had no clue or a fraction of a clue on how to figure out what I needed to buy, what I wanted to buy, and what I was impulsively buying.
I was also a reformed shopaholic — I still love to shop, and have to hold myself back! I really needed to understand my true motivation for doing what I did, and eventually near the end, I realized that saving money and making it was not a strong motivation and becoming a minimalist was much more empowering for me.
Q. Why blog about it? Why tell everyone your story?
I just want everyone to understand that it’s okay to make mistakes and it’s okay to not be perfect at the start of your life. Just like wearing sunscreen, it is never too late!
They can get out of debt and stop the spiral just by adjusting their lives bit by bit, until they don’t even miss their old life full of false necessities.
I particularly want women of all ages to be empowered to really understand their own money. It’s not enough to shuffle it off to your parents, or to your partner. YOU have to know what is coming into your bank account and more importantly, how it’s being spent.
There is no one more interested in your money, than yourself. It can seem intimidating at first (I was totally confused and lost), but it is really as simple as knowing how much you make each month after taxes and payments, and not spending more than what you bring home.
Q. If you could go back, what would you change?
Before entering college? I would have understood what it meant to be frugal. I thought I was living like a student, but I really wasn’t. I also would have paid more attention to my money when I first started drawing a paycheck at 16.
After leaving college? I would have not gotten an apartment in hindsight. I would have waited to see what 100% travel meant and then saved myself thousands in rent.
While getting out of debt? I wouldn’t change a thing. All the mistakes I made when I went on a shopping binge here and there, were all steps towards learning how to discipline myself.
Q. What’s the first piece of advice you’d give someone – it can be about anything.
- Money-wise: Start a budget and track your expenses, so that you can have ample savings to weather any storm.
- Career-wise: Work isn’t everything. Climbing the ladder is nice, but it isn’t for everyone so don’t feel like an oddball if you don’t follow convention.
- Love-related: Don’t settle for Mr. Okay.
- Family-related: They’re only trying to help, so be patient with them.
Q. What’s your next goal?
To save lots of money and keep living on a basic $1,000/month budget.
I don’t have a set figure, but I want to work toward the goal of never having to be under the thumb of a paycheck, or a slave to money. The only way out, is to save lots of it so I can say “No thanks, I don’t need this job.” any time I want.
For a concrete goal, this year I’d like to stay under $20,000 in expenses, but seeing as things have already derailed in January and February, due to the fact that I am a freelancer and not really able to separate work expenses from life, I may have to amend my goal, but we’ll see.
