Why You Should Save While Paying Off Debt
I constantly get asked whether it is best to save or pay off debt first. Honestly, it depends on personal experience and preference. For me, it worked to save and pay off debt at the same time. I worked two jobs and muffin worked hundreds of hours to make it all possible. Don’t get me wrong it is possible to do it on 2 streams of income or even 1. The key is you have to be disciplined and you have to have the mentality that there is something greater waiting for you at the end of your journey and that is to be debt free.
Many of you know that we woke up one day over $8,000 in debt due to credit cards and loans. To many, this may not seem like a lot but to me, I am just thankful that we caught it before we dug ourselves further in. Debt is debt no matter how much you have. We were responsible for this sinking ship and it was up to us to work together to keep it afloat.
What we don’t realize is that we spend money based on our emotions. When we are overwhelmed and stressed, we just want to go out with the girls and have a couple of drinks, relax, and take our minds off of life for just one minute. The same goes for when we are inspired and feeling empowered. We do things with such excitement and intention because at that moment the air we are breathing just smells so fresh! Don’t judge, that is how I think when I am feeling empowered and feeling a little on the inspirational side. 😊 It is very important to control your emotions when paying off debt. The first step towards a debt-free life is to get strong mentally.
Speaking from personal experience, here are some of the tips we used to pay off debt while saving.
How We Paid Off Debt While Saving
Typically I’d suggest saving 3-6 months’ expenses in an account that you rarely use. This is to cover you in the case of an emergency such as job loss or if you have to take time off of work due to health issues, etc. For me, I was so emotionally drained from our debt that I did not wait to get a jumpstart.
We started with the credit card that had the smallest balance and then worked our way up. I used my paychecks from my part-time job to contribute to the one we were paying off that month. The balance was somewhere around $728 with a $25 minimum monthly payment. I made somewhere around $180 extra per month with just my part-time. That particular month we’d pay the bare minimum on everything else and any extra would be split between savings and paying on this one credit card. We had $150 coming from our other 2 streams of income that we split between savings and debt.
In order to beat temptation, I would wait until the end of the month to cash all of the checks from my part-time. I would then put the money immediately towards the balance. We paid $75 on top of my checks from my part-time job to knock down the balance even faster. This made it a total of $255 per month that we were putting towards our card. The other $75 went towards savings.
We repeated the process until we knocked out all that we could all while saving a little somethin’ somethin’. The more we knocked out the more we were able to have the next month to put towards debt and savings. Each time we knocked out a credit card, I would take one of my part-time checks and we would go celebrate.
Take it from me when I say all victories should be celebrated, no matter how big or small. Waiting until you are completely debt free just to do something bigger will only cause you to be in a rut later. What do we do when we are sleep deprived? We start doing crazy things and can barely function. The same happens when we are celebratory deprived (Is that even a word?). We will spend with every intention of being on a budget but due to the fact that we haven’t spent on ourselves in so long, we end up overspending.
Setbacks
Yes, setbacks will happen while you are saving and paying off debt. It is important to remember to handle them with grace and pick up where you left off afterward. It’s easy to get frustrated and quit which in turn will have you right back at square one but if it were easy, everyone would be doing it right? You got this!
Why Does Any Of This Even Matter?
Because we have set goals that we will achieve for ourselves and for our families. We want our children to have better and do more than we were able to do at their age. We want them to travel and see the world. We want the same for ourselves in return. We want to go about life in a more peaceful sense, without the debt chimp on our shoulders. Living with no debt- you sleep better, you act better, you live better. Make debt freedom your choice today!
