I am truly fascinated with the world, beyond a way that words can describe. Doors open and close in unlimited directions, and there is opportunity creeping it’s head in and out of all situations.
Despite my obsession with culture, history, and world travel, I’ve yet to cross an ocean to interact with the one thing that intrigues me more than anything else. I come from a middle class family that never really traveled, although I’ve tackled most of the United States since I was old enough to adventure on my own.
As I sit down and analyze all the places I want to go, and all the experiences I want to create, it’s apparent that my focus is on world travel and foreign cultures. The languages, lifestyles, foods, religions, landscapes and history all lead to immediate fist-pumping throughout my brain.
Life is too short, and I really do believe that way too many people take it for granted. I am refusing to be that type of person.
So, for 2015, I’m further analyzing exactly why I haven’t lived out my dream, and I’m taking the next big step to make it happen. Last year I kickstarted my journey, and I realized that if I had a network of amazing people all over the world, it would undoubtedly help me in my world travel endeavors. I created that network through the podcast.
This year, I’m confronting the big bad money demon who thinks debt is necessary. It’s not, bra.
I’ve always saved a little for trips across the country, planned moderately, and returned with incredible memories but massive credit card bills. No matter how much money I tried to put away for a trip, it ALWAYS ended up being much more expensive, and the amazing experience turns into a fireball of stress trying to stitch my financial life back together. I don’t want to have any more cry baby pity parties with myself.
What would life be like without debt? What changes would you make in your daily routine if you knew you didn’t HAVE to work constantly just to pay your monthly bills and live hand to mouth?
Well, having more money doesn’t necessarily solve the problem. I think more money just makes you more of who you are. If you are a raging alcoholic with a gambling addiction, you will probably just drink more alcohol and gamble more. If you are an honest charitable person who wants to change the world, more money will help you achieve your goals on a much larger scale. The world is yours either way.
So, without debt, I would travel the world and mingle with foreign cultures. Sorry, I WILL travel the world and mingle with foreign cultures. I will see where I can contribute to the good of the world and those underprivileged cultures in ways much larger than myself.
So how do I get rid of my debt if I only have enough to pay my current bills?
I’m not a debt annihilation guru, but the formula I’ve brainstormed in quite different from just “cutting back spending.”
It’s in the planning, mindset, focus and doing.
You might already have the mindset if you are reading this, and you might already have a plan in place, but are you focusing on it and actually DOING it.
It doesn’t matter if you are a starving artist, musician, entrepreneur, wantrepreneur, single parent, college student, or bugs bunny… unless you were born into gold throne, you have faced battles with money and debt.
Think about the ONE thing you want more than anything else. Would having more money make that dream more of a reality? It would definitely be a step in the right direction.
It starts with being honest with yourself and analyzing the problem. For me, it’s the debt I racked up when I got sucked into the “good american lifestyle.” Go to college on loans, buy a car and house on loans, take a job I don’t enjoy so I can pay for things I don’t need to impress people I don’t like. Sound familiar?
It didn’t take long for me to realize that wasn’t the life for me, but the aftermath is still present with the debt.
Everyone has a situation that is different, but I’m going to walk you through exactly what I’m doing in 2015 to eliminate $15k in debt before December 31, and I have ZERO money from work left over to spare after paying my bills. Notice I’m not trying to pay off 5k or 10k, I’m going for the whole chunk in one year because I know it’s possible. People do it all the time. This isn’t a proven method, it’s an experiment, but I’m going to prove that it can and will work.
The thought process:
- How much debt do you actually have? (I didn’t include my primary mortgage in this because it’s an equity investment.)
- Between my student loans, basement loan, car loan and second mortgage, I owe about $15,000 in principal.
- How much will it cost if you make the minimum payments throughout the life of the loans?
- Multiply out your minimum payment for each loan by the amount of payments you have left. If I make the minimum payments until the loans mature (some through 2018), It will cost me over $30,000! That’s $15,000 more! WTF banks.
- How much money do you pay PER YEAR in minimum payments?
- For me, those loans add up to $706.20 per month, which is $8,473 per year. If I’m paying $8,473 per year, then in just 2 years I am paying MORE than what I owe as a total for all my loans..yet some of the plans don’t end until 2018! Starting to see the picture??? If you have more debt than $15k, it may take more than one year of planning to pay it off, but the point is to create a trackable plan that will help you save ASSTONS of money over the life of the loan and ultimately bring you closer to your dream that much faster.
- How much will it cost you per week to pay off the sum of your debt in 1 year?
- Divide the total of your debt by the 52 weeks in a year. 15k / 52 = $288.46 per week.
WOAH! How in the hell am I going to save $288.46 per WEEK when I’m already flat broke after my monthly bills?
Yes, I can target more business through work and make more revenue, but there is no certainty. Plus, I am creating separate goals for work, and I want my debt to be destroyed with a combination of daily habits, obedience, and creativity in new forms of savings and revenue.
This is where having a coach pays off.
I asked Jacqueline about my thought process, and how I can actually make it a reality. I was shocked when she said it can easily be done, but I’d have to frame my mind to make it possible.
She says Play it like a game!
The amount of money we spend on impulse buys, extra groceries, luxury items, restaurants, socializing, holidays and all other lifestyle situations is the absolute answer to this problem. You have to reframe your mind to see the value in EVERYTHING, and then create ways to save with that value.
It’s like shopping and making decisions for gold. Instead of thinking negatively about how much it will cost you, think positively about how much you will save.
If you find something that you NEED to buy on clearance, and you buy it, take the difference and put it in your savings because you WOULD HAVE spent it anyway if the item wasn’t on clearance. If you find something you WANT, think about if you truly need it. If not, don’t buy it and put the money in your savings.
If you really want to go out to dinner one night, think about how much it will cost and then put that money into your savings instead. Maybe even give yourself a challenge of making what you would have ordered at home, and then put the difference in your savings (that way you can have both AND improve your cooking skillllllzzzz.)
If there is something that you buy often, contact the manufacturer and see if you can get a discount if you buy in bulk. You will be surprised to see how many companies will give you 10-50% off for direct ordering in bulk quantity, and you can put the difference of what you would have spent in your savings. 😉 Even if they say no, who cares? Atleast you tried, and trying is what matters! I just bought a bulk quantity of health teas with a 45% off coupon code for buying eight or more at once. I now have enough for the year and don’t have to think about buying it again, and I put the $130 I saved in my debt free fund.
As you continue to build this game into your daily habits, it will become something that you think about in every situation that money is involved. You will not only start to see the savings add up, but you will also begin to notice that you actually have more money than you ever thought, it was just all being sucked out into the want-economy.
At first, it will be much slower and harder to hit your weekly goal, but you have to tweak your milestones to gradually incline on the way. Since I’m aiming for $288/ week, I started my weekly goal for the first month out at $100 and slowly increasing them up to $500 towards the end of the year. As time passes, your mind will be reframed to see the opportunity in every situation to save money. It’s like Easter egg hunting for bling bling.
Tracking your progress is insanely important, so I want to share with you the spreadsheet that Jacqueline and I created for tracking my progress. You could do this in many different ways, but this method works for me.
Here is a screenshot of my weekly and monthly goals, which adds up to $15,200 for the year:
Here is a screenshot of the current spreadsheet I’m using to track my goals.
This spreadsheet is posted live HERE so you can track my progress and hold me accountable 😉
You can find view and save a blank version of this spreadsheet with the link below if you want a copy for yourself. If you have a website, you can embed your own google spreadsheet onto it. Shoot me an email if you want to know how. It’s super simple.
Enter the total that you want to save at the bottom, and then keep track of how much you have saved by logging each item and the amount. It will add up totals for the month and year and help you stay on track.
I didn’t get this going until week two of the year, but I’m on track with my goal so far. I’ve started selling all the useless belongings in my house through my minimalism transformation, and I even found some old electronics that were broken and sold them off for parts. You can see I’m tracking even the smallest savings i.e. I saved $7.00 on fandango tickets.
I opened a second savings account with my bank that doesn’t allow me to withdraw out of, and I also created a money box in my house which I can’t remove funds from without either a chain saw or Macho Man himself. At the end of the week, I add up what I saved on purchases and transfer the money to one of the accounts.
So, it’s your turn. Play the game with me. Create your plan to save money and start tracking. It’s actually obnoxiously fun and one of the most rewarding games you will ever play. Before you know it, you will be debt free, fist pumping, and on your way to opening up new revenue streams to create the life of your dreams.
Remember, there is no failing here. It’s a game to see how much you can save. Anything is better than nothing 🙂 Down with the big bad erroneous debt monsters!
Mountains can be climbed one step at at time. May the fist pumps be with you.
PS- if you have a story about saving money or paying off debt – say HOLLA in the comments below! I want to hear what worked and what didn’t. 🙂