Month: January 2020

  • 11 Ways to Make an Extra $1,000 a Month

    When my husband and I got married, we knew we had some financial goals we wanted to meet pretty quickly. 

    Together we had six figures of debt, and we knew we wanted to pay that off as soon as possible. Thinking about making these student loan payments twenty years from now sounded miserable, so we settled on a payoff timeline of about seven years. 

    We also had some big purchases we knew we wanted to save for. We also had plans to give up our apartment and buy an RV so we could travel the country in it.

    We also knew we wanted to buy a home when we got back to Wisconsin, so we wanted to start preparing for that early.

    So I guess you could say we’ve got an expensive few years ahead of us. 

    The best way for us to aggressively pay down our debt and save for our financial goals at the same time has been to increase our income. 

    $1,000 in extra income per month can go a long way!

    In this post, I’m sharing how you can make an extra $1,000 a month to start tackling your financial goals. 

     

    11 Ways to Make an Extra $1000 Per Month

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.

     

    Why is it good to make extra money?

    How many times have you read a personal finance book or blog post that said you should stop buying lattes or start clipping coupons to reach your financial goals?

    Yeah, it might not be terrible advice, and those things can help you to save a few dollars here and there. But are you really going to pay off your student loans or buy your dream house by saving a few dollars here and there? Probably not. 

    Rather than ruthlessly cutting small things from our budget, my husband and I have found the best way to reach our financial goals is to make more money. 

    After all, we really wanted to be able to aggressively pay off debt while also enjoying live music and eating out since those are our favorite things to spend money on. 

    Making an extra $1,000 a month can make a huge difference in helping you to reach your goals. 

    With $1,000 extra income per month, you could pay off your student loans in just a few years rather than the 10-20 years it’s scheduled to take. 

    With $1,000 extra income per month, you could save the downpayment for your dream home in just a few years. 

    With $1,000 extra income per month, you could take an amazing vacation every year and still have enough to save aggressively for retirement. 

    I’m telling you, making extra money is the secret you’ve been looking for!

     

    What are the best ways to make extra income?

    When you first think about it, $1,000 sounds like a lot of money. And don’t get me wrong, it’s definitely more than spare change. 

    But when you do the math to figure out exactly what you have to do to hit that number, it’s actually not as hard as you’d think!

    An extra $1,000 could be:

    • 25 hours per week at $10 per hour
    • 10 hours per week at $25 per hour
    • $250 from four freelance clients each
    • 10 online courses sold for $100 each
    • 8 musical lessons taught for $125 each

     

    START A BLOG

    I can honestly say that starting a blog was one of the best decisions I’ve ever made. Not only is it something that I genuinely enjoy doing, but it is also an amazing way to bring in additional income every month. 

    There are plenty of different ways to make money blogging depending on what interests you. You could make money through affiliate marketing, sidebar ads, working with companies on sponsored blog posts, or selling your own digital products like eBooks and online courses. 

    You can start your own blog or niche site on just about anything. I’ve seen successful blogs in just about every niche you could think of. As long as someone out there is interested in it, you’ve got a potential audience. 

    And for what it’s worth, I was able to launch my tiny personal finance blog into a six-figure freelance writing business.

     

    BECOME A FREELANCER

    When you work as a freelancer, you’re an independent contractor providing a particular service to another person or company. 

    If you’ve got a specific skill set to be a freelance writer, graphic designer, or social media manager, you can find work as a freelancer online. 

    In 2018, in addition to running my blog, I started picking up freelance writing clients. In just a little over a year, I was able to take my freelance writing income from just a few hundred dollars here and there to $10,000 per month. 

    My favorite resource to get started with freelance writing is the online course Earn More Writing. In this course, six-figure freelance writer Holly Johnson teaches you how to get started with freelance writing and make serious money online. 

     

    START A YOUTUBE CHANNEL

    We’re living in an increasingly visual world, so it’s not surprising that video continues to become a bigger and bigger deal every year. 

    And while it might seem like it’s too late to start a YouTube channel (hasn’t it all been done already??), there’s definitely still room for anyone who has something unique to bring to the table. 

    Certain niches tend to really go hand in hand with video, but honestly, people have been successful on video in just about every niche!

    If YouTube sounds right for you, I recommend finding an online course on video and editing. With so much competition out there, people really expect high-quality videos. 

    Start sharing your creations with the world, and before you know it, you’ll start bringing in extra money. 

     

    BECOME A VIRTUAL ASSISTANT

    One of the awesome things about the rise of online businesses is that it’s created an entirely new career — Virtual assistants. 

    A virtual assistant (aka a VA) is an independent contractor that provides administrative services for online clients. 

    Plenty of online business owners hire VAs to help them in all areas of their business. Some do really basic administrative tasks like responding to emails, while others might have a more narrow specialty, like running someone’s Pinterest account or doing all of their social media scheduling. 

    You can find VA jobs on just about any job board these days. You can also join Facebook groups for business owners and find anyone looking for VA services. 

     

    START A SERVICE-BASED BUSINESS

    Plenty of people make extra cash by offering services to people in their community. If you have a talent, chances are other people are willing to pay you for it. 

    For example, the photographer my husband and I hired for our wedding actually does that as a side gig, and she has a different job she works as her full-time job. 

    She’s at the point where she’s definitely making more than $1,000 per month, but you’ve gotta start somewhere! 

    A service-based business could also be something as simple as mowing people’s lawns in the summer or shoveling their driveways in the winter. 

    Plenty of people offering service-based businesses start off just to make some extra money and then end up going full-time later on. 

     

    TEACH ENGLISH ONLINE

    Another easy way to make $1,000 per month is by teaching English online. You can do this by using a site like VIPKID. 

    VIPKID is an online education service that connects kids in China with English teachers. And no, you don’t have to be an actual English teacher to join. 

    On VIPKID, you can make up to $22 per hour teaching short half-hour lessons to kids. The best part is that you can make your own schedule, meaning you can make an extra $1,000 per hour in your spare time between other commitments.

     

    START AN ETSY SHOP

    If you’re crafty, Etsy can be a great way to make some extra money every month. Etsy is an online marketplace where you can sell anything that is handmade or vintage.

    You can sell hand-made items on Etsy, like jewelry or knitted items. You can also sell digital items. Plenty of people sell printables and spreadsheets of all kinds. 

    I had an Etsy shop as a part of my business model for a number of years, and it was a great way to make a little extra money every month. 

     

    JOIN THE GIG ECONOMY

    One of the best things about technology today is that there is no shortage of apps you can download and immediately start making money. 

    These apps exist in what is called the gig economy, where you make money by picking up gigs.

    One way to make money with apps is by driving for Uber or Lyft, where you make money by driving people around in your own car. You’re basically a freelance taxi, and you can pick up a few rides whenever you’ve got time. 

    You can also make money online by delivering things. Apps like DoorDash and GrubHub allow you to sign up to deliver food. Other apps, such as Instacart pay you to go grocery shopping for other people and deliver their groceries to their homes. 

    There are also gig apps that don’t require driving anyone or delivering anything. Sites like Rover, for example, allow you to make money by pet sitting or walking people’s dogs. Sounds like a fun way to make money to me!

     

    TEACH OTHERS A SKILL

    You might be noticing a trend with this list, but the gist of it is that you can find a way to monetize just about any skill. 

    Depending on the skill, you might be able to teach lessons in your community. 

    For example, let’s say you’re skilled at a particular musical instrument. Chances are there are people in town who are interested in taking lessons. 

    If you’re teaching people locally, you can start sharing your services on social media. You could also offer a few lessons for free and ask those people to spread the word about your services. 

     

    RENT OUT A ROOM ON AIRBNB

    If you have an extra room in your house or a house or apartment you’re not always using, you could make extra money by renting it out on Airbnb. 

    This can be a great way to make a bit of extra money without too much of a time commitment. 

    Even if you don’t live in an area with a ton of tourism, there are almost certainly people coming into town for events, businesses, or to visit friends and family. 

    I know it can sound super sketchy to let a stranger come stay in your home with you, but you can screen the people who stay with you. Plus, someone coming to visit the city is probably going to be spending most of their time out, so you won’t run into them too much. 

    I’ve even read about people who rent out their apartments during their city’s tourist season and then just crash with their parents anytime someone books the place. 

     

    GET A SECOND JOB

    So many people are constantly on the lookout for the next big side hustle that they forget all about the original side hustle: getting a second job. 

    Often, these are the side jobs where you can actually earn the most money the most quickly. 

    You might think that sounds crazy, but hear me out!

    I started my blog in 2014. It started as a hobby, but it didn’t take long for me to learn that people actually make money from their blogs. As soon as I learned that, I wanted in. 

    I worked on my blog for an entire year before I made a single dollar. That first year was spent building a framework I could make money from home with later. 

    It was another year or so before I was making $1,000 per month. 

    Now don’t get me wrong — Plenty of people make a lot more money with their blogs a lot more quickly. But to do that, you have to devote a lot of time to it. As in, you skip all those happy hours and weekend plans with friends because you’re always working.

    Contrast that with my husband, who took a side job as a bartender for a couple of nights per week while we were working to save money.

    When he started that job, he was immediately able to start earning $1,000 per month (or more). There was no period of “building a framework.” 

    While it took me a couple of years to get to earning $1,000 per month on my blog, it took him no time at all. 

    So if what you’re really looking for is just an extra $1,000 per month, getting a second job might be the quickest way to make it happen. 

     

    Final Thoughts

    An extra $1,000 of income a month can have such a big impact on your life. It doesn’t take that many hours per week to get there, and yet it can actually be life-changing. 

    I can tell you that when I was going through my divorce and at my lowest financially, that extra monthly income is what got me through it. 

    Whether you want the extra month to pay off debt, save for a financial goal, or just live a little bigger, all of the tips on this list can help you to get there. 

  • Financial Goals to Help Make 2023 Your Best Year Yet

    Before I started my personal finance journey, I knew almost nothing about money management. Needless to say, there was a huge learning curve. 

    A huge part of this journey has been setting financial goals to create some direction for me. This has been such a game-changer in helping me to take control of my financial life and actually feel ahead instead of just always falling behind!

    Luckily my husband has been great about jumping on board and setting financial goals with me too. 

    In this post, I’m sharing why you should set financial goals and how to set them, and I’m giving you a list of some great financial goals you can set for 2023!

     

    The Best Financial Goals to Set in 2020

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.

     

    Why you should set financial goals

    There’s a big difference between wanting to do something and actually doing something. And the difference is almost always setting actionable goals. 

    For many years, I would have told you that paying off debt was a top priority for me. And yet, my husband and I were making the minimum payment every month on our six figures of debt. 

    So yeah, we said it was a priority for us. But our actions proved that was not really the case. 

    Setting goals is what allows you to stop just dreaming about getting your finances in order and actually start doing it.

    Setting long and short-term financial goals is an absolute game-changer in taking control of your financial life and actually living a life you’re excited about. 

     

    How to set financial goals

    Ok, so we know we need to be setting financial goals. How the heck do we actually do that?

    First, focus on setting SMART financial goals — specific, measurable, attainable, relevant, and time-bound. 

    First, make sure your goal is specific and measurable. Don’t just say, “I want to save money.” Instead, say, “I want to save $5,000 by the end of the year.” Also, make sure the goal has an end date. If you allow yourself to work toward your goal indefinitely, it will take an indefinite amount of time. 

    The most important part of reaching any goal is creating an actionable to-do list to make it happen. Write down every single task you’re going to have to complete to make your goal a reality. 

     

    Financial goals to set for 2023

    Financial goals are so personal to what you want for your life. That being said, I know a lot of people don’t know where to start with setting financial goals. So I’m going to share some specific personal finance goal examples for you. 

     

    CREATE A BUDGET

    I know you’re probably rolling your eyes seeing this one at the top of the list, but you knew it would be on here! Creating a budget and actually sticking to it is the one thing that makes everything else on this list possible!

    It is so freaking important to have a plan for your money and to know where it is going every month. That is the difference between being in control of your finances and just being a passive bystander. Trust me, I’ve been the passive bystander, and it sucks — plus, you’re broke all the damn time. 

    When I first started getting diligent about budgeting, I just used a spreadsheet. It worked great for the first several years and really got me to stick with the practice. 

    Now I use a budget app called You Need a Budget. I can’t praise this tool enough! It’s a very hands-on budgeting tool, and I think it creates a lot more accountability than your traditional budgeting apps. 

    Check out my guide on how to put together and stick to a monthly budget.

     

    BUILD YOUR EMERGENCY FUND

    Did you know that nearly one-third of Americans don’t have an emergency fund, and nearly half don’t have enough money to cover a $1,000 emergency?

    As much as I’d like to think I’d never be in that situation, I was exactly that person for years. 

    After my divorce, I could barely afford to pay my bills — actually, I couldn’t afford to pay my bills. So I definitely wasn’t putting money away for a rainy day. 

    And then, when things like car repairs would pop up, they’d go on the credit card. And sadly, this is the case for many people. 

    Make 2023 the year that you prioritize an emergency fund! How much you should save depends on your life circumstances, but shoot for between three and six months of expenses.

    Read More: How to Build an Emergency Fund & How Much You Should Save

     

    AUTOMATE YOUR SAVINGS

    You wanna know the single biggest thing that helped me to actually stick with putting money into savings?

    AUTOMATION. 

    For years I would tell myself that I’d take whatever money I had left at the end of the month and put it into savings. And, of course, I never had anything left at the end of the money. 

    So what I started doing instead was having an automatic transfer move money from my checking account to my savings account on the day I got paid. 

    It happened on the first of the money, and it was before I ever had a chance to notice the money was in my checking account in the first place. 

    If you’re having trouble putting money into savings, try setting up an automatic transfer so you’re paying your savings account before you use that money for anything else. 

    Read More: 6 Easy Ways to Automate Your Finances

     

    START A SIDE HUSTLE

    Listen, there are a lot of financial goals in this blog post. And things like paying off debt and saving for the future cost money. 

    I talk a lot on this blog about designing a life you love, and for a lot of people, their dream life isn’t cheap. And that’s okay!

    Rather than feel guilty for wanting expensive things like a house or a wedding or vacations, make a plan to pay for them. Having a side hustle has been the best way I’ve found to do that. 

    After all, you can only make the income you have go so far. Rather than pinching pennies, why not just increase your income?

    My favorite ways to make money on the side have been freelance writing and my blog. I’ve always loved writing, so I don’t mind spending most of my free time doing it. 

    If writing isn’t your thing, no problem! There are literally endless side hustle ideas out there, and I feel like I read about new ones every day!

    Here are a bunch of other ideas for how to make extra money to put toward your financial goals. 

     

    MAKE A PLAN TO PAY OFF YOUR DEBT

    I recently published a blog post about how we made a plan to pay off our six figures of debt. 

    Plenty of people have huge debt and just make the minimum payments every month. And for a long time, we were those people. 

    Making a plan completely changed the game. Just last year, we were on track to have our debt paid off…well, never. Now, as long as we follow our debt pay-off plan, we’ll be debt-free in less than seven years. 

    You know what finally pushed me to make an actual plan? I was looking at my credit card bill, and it had a chart that showed when my card would be paid off if I made the minimum payment every month. It was like thirty years, and the balance wasn’t even that high! 

    Needless to say, I panicked and immediately started running the numbers to figure out the soonest we could possibly have our debt paid off. 

    If you have a lot of debt and you aren’t sure where to start, I highly recommend the tool Undebt.it, which allows you to add each of your debts and come up with a debt snowball to get it paid off sooner. 

     

    MAXIMIZE YOUR CREDIT CARD REWARDS

    I know there are plenty of finance experts who swear up and down that credit cards are evil and no one should ever use them. And as someone who has credit card debt, I understand where this argument is coming from. 

    But I also completely disagree with it. 

    Now let me preface this by saying that if you know you can’t control your spending with a credit card and you continue to grow your balance, ignore this step and stop using credit cards. 

    But if that’s not a problem for you, then find a way to maximize your credit card rewards. 

    Some cards offer some really awesome rewards. This year for the first time, Brandon and I sat down and came up with a strategy for how we’ll use our credit cards to maximize our rewards.

    We have a few credit card accounts that have different reward structures, and some have bigger wins for certain types of purchases. 

    For anyone who wants to get started with credit card rewards and isn’t sure where to start, I recommend getting one good cash-back card and one good travel rewards card. 

    The most important part of this strategy is that you pay your balance off every single month, so you’re never paying interest!

     

    SAVE FOR RETIREMENT

    For the first five or so years that I was out of college, I didn’t think much about saving for retirement. It seemed lifetimes away. 

    I was also privileged enough to find a job working for the state, where they automatically withdraw a certain percentage of income for my retirement account and provide a pretty generous match. 

    It wasn’t until I started reading personal finance books that I really started to think about how much money I would actually need for retirement. Would my basic retirement savings be enough?

    Plus, as I prepare to leave my government job to go full-time in my business, I know that saving for retirement will be solely my responsibility — I won’t have an employer pushing it on me. 

    So over the past year, I spent a lot of time educating myself on individual retirement accounts (IRAs) and compound interest. Now I’ll be going into self-employment with a specific plan for saving for retirement. 

    If you haven’t yet started saving for retirement, now’s the time! The first book I read that was a wake-up call for me on this subject was Smart Women Finish Rich by David Bach — I seriously recommend it for all women. 

    Even if you’re already saving for retirement, take a few minutes to reevaluate your strategy. How much are you putting away each month, and how much do you expect that to amount to in retirement?

    Are you just putting some into your company’s 401(k), or are you saving in an IRA as well? Are you saving aggressively, or just putting in the bare minimum. 

     

    READ PERSONAL FINANCE BOOKS

    Reading personal finance books was one of the biggest factors that pushed me on my own personal finance journey. Some of the books I’ve read have honestly been life-changing. 

    I have an entire blog post with some of the best personal finance books out there, but here three of my favorites:

    1. I Will Teach You To Be Rich by Ramit Sethi. This is hands-down my favorite personal finance book. First of all, I love the way Ramit writes, and I appreciate his blunt approach to financial advice. In this book, Ramit walks you through a six-week program to figure out what a rich life means for you, how to set up a budget, where to prioritize your money, and how to invest and save for the future. My copy is full of highlighter, margin notes and dog ears and I’ve gone back to it so many times! 

    2. Smart Women Finish Rich by David Bach. I’ve already mentioned this book, but it’s worth mentioning again. I first heard of David Bach when I was listening to a podcast where he was a guest. He was talking about how most personal finance information is geared toward men, and yet women are the ones who live longer and often spend their last years living in poverty because of the poor financial decisions of the men in their life. It was startling and totally eye-opening. He also talked about the power of compound interest and how, if you start early, it only takes a little every day to set yourself up for retirement. I can’t recommend this book enough! 

    3. You Are a Badass at Making Money by Jen Sincero. I’ve never paid much attention to mindset advice. It always seemed a little too woo-woo for me. I’d always take quantifiable, actionable advice over anything. And then a few things changed. First, I started learning from a life coach who blew my mind. And I read Jen Sincero’s Badass books. What a freaking game-changer. Following the advice in this book has completely changed the way I think about and talk about money. Subsequently, I’ve made exponentially more in my business since reading this book than I’ve ever made before. 

     

    BOOST YOUR CREDIT SCORE

    I read a statistic recently that more than half of Americans never check credit their credit score. Like….literally never. 

    Considering your credit score can make the difference of tens of thousands of dollars in interest, that’s a pretty frightening statistic.

    When you take out a loan or any kind of credit, your interest rate is based, in large part, on your credit score. The higher your credit score, the lower the interest rate you’ll get. 

    So when you’re talking about a big purchase like a house or a college education, yeah, it can be a difference of tens of thousands of dollars. 

    This is another reason why I don’t agree with people’s advice to avoid credit cards at all costs. Using credit cards properly can really help you to boost your credit score! 

    My credit score took a huge hit when I went into debt after my divorce, and I’ve been focusing big time on getting it back up. Check out my blog post on how to repair your credit score during major life changes.

     

    CREATE LONG-TERM FINANCIAL GOALS

    Setting personal finance goals for this year is amazing. But we also need to be thinking a little further in advance. 

    Because here’s the thing — someday, you’re going to want to buy a house or have a wedding or do something else that costs a whole lot of money. And if you only set your financial goals for one year at a time, that’s going to be tough. 

    MY HUSBAND and I sat down together and talked about what we want the next 3-5 years of our lives to look like. We specifically nailed down the big expenses we anticipate coming up so we can start saving for them now. 

    For example, after we do some traveling for a couple of years, we know we’ll want to come home and buy a house. So instead of waiting until we’re done traveling to start saving for a house downpayment, I’m going to set up a budget goal for it now so we can put a little money in every month. 

    Your goal doesn’t have to be buying a house or planning a wedding. It might be starting a business, going on a killer vacation, or having kids. Whatever you envision your life being five years from now, start saving for it now!

     

    Final Thoughts

    Listen, we can’t do it all. And as much as I would love for all of us to tackle every single thing on this list, we’ve gotta focus on baby steps. 

    At the same time, I promise that if you make a budget and take at least the first step toward the rest of the financial goals on this list, you’re going to be setting yourself up for amazing things in the future. 

  • How We’re Planning to Pay Off Six Figures of Debt

    One of the first conversations my husband and I had when we got engaged was the money talk. 

    We had already talked about finances before, but getting married meant it was 100% necessary that we get in sync and make sure we were on the same page when it came to financial goals. 

    And the biggest financial goal we talked about? Becoming debt-free.

    We have a combined six figures of debt (around $150,000, actually). That debt is mostly in the form of student loans. I also have a car loan and some credit debt that I racked up during a particularly difficult time in my life. 

    If we were to pay the minimum payment on all of our debts every month, we would literally have this debt until we die. And we just weren’t okay with that. 

    2019 was the year we got married – It was also the year that we got serious about tackling debt and made a step-by-step, actionable plan to pay it off.

    In this post, I’m sharing how exactly Brandon and I plan to pay off our six figures of debt – and how you can do it too!

    2020 Update: Since writing this piece, Brandon and I have paid off all of our non-student loan debt. While saving for our RV, we were also able to pay off our car loan and credit card debt.

     

    How We’re Planning to Pay Off Six Figures of Debt

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.

     

    We figured out exactly how much debt we had

    The very first step we had to take in order to make a plan to pay off our debt was first to figure out how much debt we actually had. 

    Prior to getting married, we had talked about roughly how much we had, but starting this project was the first time we really put it all down in one place. 

    When it came to gathering all of our debt accounts, we used a tool called Undebt.it. This tool allows you to enter all of your debts, including your total balance, interest rate, and minimum monthly payment. It tells you how much debt you have and when you can expect to pay it off if you make the minimum monthly payment on all of your debts. 

    If you have a lot of debt, this date will make you want to cry. I promise you’re not tied to that date, though!

    Undebt.it is a great tool for this job because helping you to organize and pay off your debt is literally what it’s made for. I also love it because it syncs with the budgeting app we use, You Need a Budget.

    If you’d rather not use Undebt.it, you can literally just do this step in a spreadsheet. Just have a column for each debt, the total balance, the minimum monthly payment, and the interest rate. 

     

    We took responsibility for our decisions

    Figuring out how much debt we had and taking responsibility for the amount of debt we had were two very different steps. 

    You see, I spent a lot of time being pretty angry about my debt. I was angry that we have a system that resulted in us having six figures of student loan debt for two bachelor’s degrees. I was angry that my divorce put me in a situation where I had to live off credit cards to get back on my feet. 

    But at the end of the day, those are decisions that I made. 

    I chose to take out student loans rather than go to a two-year college or take a few more years to work before going to college. I chose to rack up credit card debt rather than move back home to save money or severely cut costs. 

    So yeah, taking responsibility for our debt decisions was a big step we had to take in actually taking the next step to pay that shit off. 

    Of course, I know there are structural and societal problems that lead to and perpetuate the problem of debt for many people. We should have a system where people have to go into crippling debt to pay for college. We shouldn’t have a national income disparity that makes it difficult for so many people to pay their bills.

    But for the purposes of us actually addressing our debt, owning responsibility for it was actually helpful.

     

    Refinanced our highest-interest student loans

    Most of our debt is student loan debt, with a car loan and a bit of credit card debt on top of that. Most of our student loan debts were at a pretty low-interest rate. Unfortunately, there were a couple of private student loans that were at an astronomical interest rate (like, over 14%). 

    Yeah, it was bad. We knew we had to get that fixed ASAP. 

    If you’re shopping for a loan to refinance your student loans, I recommend Credible. You can see rates from more than a dozen different lenders to find the best loan for your situation.

     

    Getting on a budget

    Yep, we’re going to talk about the dreaded “B” word – budget. 

    I’ve had a bit of a rocky history with budgeting. I didn’t really create a budget until I was in my early twenties, but I didn’t really stick with it. 

    Then I got divorced at 27, and suddenly sticking to a budget became 100% necessary. 

    But then my husband and I met and suddenly had a two-income home. And if I’m being honest, sticking to a budget kind of fell by the wayside. 

    We knew that if we were going to get serious about paying off debt, we weren’t going to do it without a budget. 

    My favorite budgeting tool is the app You Need a Budget (aka YNAB) – that’s an affiliate link, but it will get you a free trial. Seriously, if there were one financial tool I would recommend to literally everyone, this is it.

    Rather than other budgeting apps that just tell you how much you spent at the end of the money so you can feel bad about yourself, YNAB is a hands-on tool that forces you to be an active participant in your budgeting. 

    Using YNAB has completely changed the way to budget – is it weird if I say I actually enjoy it??

    The other huge perk when it comes to paying off debt is that YNAB syncs with the debt payoff app I mentioned earlier, Undebt.it. 

    One of the most important parts of putting together our budget was that not only have we been able to limit the amount of money we spend on nonessentials, but it’s given us an idea of how much money we can put toward debt every month. 

    If budgeting is still a struggle for you, check out my guide on creating a monthly budget that you’ll actually stick to. 

     

    We made a plan

    If you had asked me at any point over the past few years, I would have told you that, yes, paying off debt was a huge priority for me. And yet, I had no actual plan to pay off my debt and I was making the minimum monthly payments on all of my debts.

    Finally, we realized that if wen wanted to get our debt paid off in our lifetime, we would need to sit down and make a plan. 

    The first step to making a plan was creating our budget and deciding how much money we wanted to put toward debt every month. At this point, we’re allocating $2,000 per month toward debt (that number will go up with side hustle profit and as our incomes increase). 

    Once we knew how much to put toward debt every month, we had to figure out what to do with it. 

    There are two primary strategies to use for paying off debt: the debt snowball and the debt avalanche. 

    The debt snowball is where you pay the minimum monthly payment on all of your debts except for the smallest one. You put all of the extra money you have to put toward debt toward that smallest debt.

    Then, once your smallest debt is paid off, you take all the money you were putting toward that one and start putting it toward your new smallest debt. 

    The benefits of the debt snowball are largely psychological because you’re paying off debts soon it. But it doesn’t actually provide you with the most savings, which is why I prefer the debt avalanche. 

    The debt avalanche is where, instead of prioritizing your smallest debt, you prioritize the debt with the highest interest rate.  Over the long run, the debt avalanche provides the most savings because you’re eliminating the debts that are earning the most interest. 

    We used Undebt.it to sort our debts in order of highest interest to lowest. The tool shows you when each of your debts will be paid off and how much interest you’ll pay over the life of all of your loans. I love that Undebt.it syncs with YNAB, so I don’t have to manually update our accounts each month!

     

    We’ve increased our income

    I get that $2,000 is a lot to put toward debt each month. We’re incredibly lucky that we’re able to afford that much. That’s definitely one of the benefits of a two-income house with no kids. 

    But that $2,000 per month debt payment maxes out our budget, and we have a lot of other financial goals we want to reach before our debt is paid off. 

    In order to reach those other financial goals, we had to bring in income in other ways. 

    Luckily, we both already had a side income. Brandon bartends a couple of nights per week after his full-time job, and I’ve been running my blog for years now. 

    Once we decided to start really going after our debt, I worked really hard to increase my income so that we could still reach our other financial goals – specifically, our goal to buy an RV and travel full-time starting later in 2020!

    I completely rebranded my blog, increased my affiliate marketing efforts, and went all-in on freelance writing. 

    Because of putting in so much extra effort last year, I was able to 10x my monthly side hustle income in 2019. A big part of that has been growing my freelance writing business big-time. 

    I’ll be working on increasing my business income even more this year since traveling full-time will require leaving my full-time and running my business full-time. 

     

    We looked for other opportunities to save money

    Even though we’ve worked our debt payoff into our budget and are bringing in side income to pay for our other financial goals, we’re still always on the lookout for other ways to save money. 

    Some of these tactics have been no extra work at all. In fact, some of them have actually saved us work. For example, did you know that some student loan companies will give you a small discount on your interest rate if you set up autopay? 

    We also take advantage of cash rewards on our credit cards. We have two primary credit cards we use – one is a cashback card, and one is a travel rewards card. We pay them off in full every month. 

    Finally, we use cashback apps to save a few dollars here and there. One of my favorite cashback sites is Rakuten (formerly Ebates), which gives you cashback for shopping at certain retailers. 

    The other cashback apps I love are Fetch Rewards and Ibotta, which give you cash back on select grocery items. I use them for our grocery shopping every week and always find a few dollars in savings. 

     

    We’ll adjust our plan as our income increases

    According to our current debt payoff plan, we will have our $150,000 of debt paid off in about seven years. But in my mind, this is kind of a worst-case scenario plan.

    As our income increases over the next few years (which I fully expect that it will), we will plan to put more money toward paying off our debt. We can also use small windfalls such as tax returns, gifts, and any other bonus money we bring in. 

    It’s impossible to say exactly what our life will look like for the next seven years – I fully expect we’ll go through a lot of changes! We’re going to remain flexible and hope that we can increase our debt payoff above and beyond our current plan. 

     

    We’re striving for balance

    As I mentioned earlier, my husband and I have other financial goals we want to hit over the next few years. And as much as I’m looking forward to being debt-free, I’m not willing to put the rest of our lives on hold until that happens. 

    For that reason, we’re striving for balance rather than putting every last spare penny we have toward debt. 

    We still go out to eat and buy tickets to concerts (our two favorite hobbies). We’re still putting aside money for other financial goals, and we’re still saving for retirement. 

    I think it’s incredible when I read stories about people who pay off six figures of debt in just a couple of years – those people are rock stars!

    But at the same time, neither my husband nor I want to sacrifice that much. We might change our minds at some point, but right now our goal is balance. 

     

    Final Thoughts

    Making a plan to pay off our six figures of debt has been an emotional ride. When we would look at the big picture, it would always seem like a completely daunting situation that we’ll never get out of. 

    Breaking it down into small steps and actually putting dates to everything took this incredibly scary number and made it seem so much more manageable. 

    We’re still early in the process, and I fully expect it to be an emotional roller coaster, but at this point, we both feel so confident in our plan and excited for the day we are debt-free!

    I’ll continue to share more updates as we go, as well as some of the lessons we’ve learned so that others who are paying off a large amount of debt can learn from our journey.