It’s been a little over a year since we have been debt-free except for our home. While I wouldn’t trade the financial freedom we have today for anything, there were a couple of hard lessons I wish I’d learned early on. Here are 10 things I wish I’d known before paying off debt.
1 – The Jones’ are broke.
You know the Jones family. The one who has the nicest house in the neighborhood, drives the nicest cars, wears the nicest clothes, takes the nicest vacations. Everyone admires them. Everyone envies them. Everyone wants to be them.
Well, not everyone. Anymore…
In reality, most families that appear to have so much wealth are usually house broke, paying for cars they can’t afford to be driving, and going deeper and deeper into debt to keep up the image.
I wish I knew from the beginning that no amount of financial stress is worth it to impress people who are just as broke as you. I wish I knew that most real millionaires actually drive Toyotas and live very frugal lives. And they very rarely care what others have to say about the choices they make with their own money.
2 – Most friends won’t get it.
I can’t even tell you how many times we were the laughingstock of our friends for our ultra-frugal habits. Most of it was good-natured teasing. But they just didn’t get it. And that’s okay! Because it was OUR debt to pay off. And now that we are debt free, a lot of friends have reached out to us asking for advice about paying off their debt.
We said no to a lot of hang out sessions. Eating out after church, expensive Friday night “dinner and a movie” habits, vacationing with friends. We didn’t say no every single time. But we had a budget for all of those items, and once we spent it we were done for the month!
Most of our friends didn’t get it, but we learned to be okay with that. They weren’t the ones paying our bills.
3 – Every little bit helps.
An extra 20 dollars seems like it wouldn’t make a big difference. It was easier at first to take that extra $20 and go out to eat with it. But we learned that 20 bucks here and $50 there and another 30 dollars at the end of the month really added up when we put it towards debt.
Over the course of four years, all of those little amounts really added up to make a huge collective difference.
4 – Track my goals.
Visuals make everything so much more fun, don’t they? Tracking goals on a debt thermometer motivated us to color our way to financial freedom. Keeping these visuals was a way to keep our goals at the forefront of our minds.
Anytime we were tempted to splurge on something that wasn’t in our budget, I would see that little debt payoff tracker and realize I would rather have that extra payment go towards debt.
P.S. There are tons of finance printables in my Simple Finance Toolkit to help you track your budget, debt payoff, and savings. And they are FREE for readers! If you want to track your progress with cute printables that are free, enter your email in the little box at the bottom of this post. I’ll send you instant access to the Simple Finance Toolkit! Or feel free to read more on my finance freebies page.
5 – Reward myself for small goals.
Sometimes the only reward I needed was coloring in more boxes in my debt thermometer. I’m nerdy like that. But when we paid off a large goal, like one whole student loan, or a full credit card, we would celebrate as a family. We went out to eat, we splurged on a trip to the movie theater, or we took a family trip over a long weekend.
By breaking up our big goal into smaller chunks, and rewarding our hard work when we met those smaller goals, we stayed motivated and encouraged. And knowing we were working towards our next reward definitely made it easier saying no all the time while we were working our way through the next goal.
6 – It would bond my hubby and me.
I had NO idea how much my husband and I would come together while paying off our debt. We set goals together, we worked together, we sacrificed together. For the first time in our fledgling marriage we were truly a team working together for the same purpose.
Did we disagree at times? Yep. Did we always see eye to eye on every issue? Nope. Did we sometimes, ahem, loudly discuss those disagreements? You betcha!
But at the end of the day, we were working for the same things. We wanted a better future for our families.
Sometimes that meant one of us had to compromise. Sometimes that meant waiting on something that we thought should be done right away. But always it meant we made a joint decision that both of us could agree on before doing anything.
7 – Finances truly are a family affair.
Not only did paying off debt unite my husband and me, it taught our girls that stuff doesn’t really matter. Last Christmas, I realized how blessed we are to have two girls whose lives don’t revolve around things. They each had a couple big things they wanted. But no matter what they got (or didn’t get!) they were grateful and excited.
And they were more excited for the experiences of Christmas, not just the gifts. Dinner at Nana’s house. Family holiday parties. Looking at Christmas lights. Movie nights and hot chocolate. THOSE were the things that fueled them. THOSE were the things they talked about over and over again. Not just their list of wants.
I remember at a family get-together, a family member asked what they wanted for Christmas and I literally had no idea! They hadn’t even mentioned anything about what they wanted or if they had written a Christmas list yet!
Without even meaning to, paying off debt taught our girls that life isn’t about things. It taught them that delayed gratification is a good thing. It taught them to be content with what they already have.
They learned to find fulfillment in the things that truly matter: faith, family, friends, memories and traditions.
8 – I’m modeling financial health for my girls.
Kids pick up on everything. And they definitely do what you do, more than what you say. When we preach to them about a healthy relationship with credit, saving first, and giving to others, it wouldn’t mean a hill of beans if we weren’t also modeling that. Our girls talk about one day getting a debit card because we don’t even talk about credit cards. They are literally not a part of our vocabulary.
They give to others and take part in charity work because we do it as a family. It is something they genuinely enjoy and look forward to every year. And they know the satisfaction that comes after paying for a big-ticket item they have been saving for.
9 – Sharing my story inspires others.
When I first hit “publish” on our debt free story, I had NO idea the impact it would make on others. To date, it is still my most popular post. Readers email me all the time to pick my brain on their financial situation and what the best starting place would be for them to pay down debt. I have met with countless friends in real life who want to one day be debt free, too!
Our story spread like wildfire on Pinterest. And I’m so glad our experiences can be an inspiration to others who are on their own debt free journey right now!
10 – I’m never done “working” towards our financial goals. They just change over time.
The day we paid off our debt was one of the most monumental days of our lives. But I remember thinking, “Now what?” For years and years we had one big goal. To be debt free.
When that one big goal was crossed of our list, we found another goal! Saving an emergency fund for three to six months’ worth of expenses. We realized we weren’t ever really done with our finance dreams.
Now our big goals look different. We have a lot of smaller goals, like funding smaller things that are must-have items we pushed off for so long. But no one is ever done.
There is paying for college, saving for retirement, paying cash for future cars so we never have to pay another car payment again.
And I love that!
Having goals at the forefront of our minds keeps us motivated to spend every dollar wisely. Some months we are really bad about slacking off, but for the most part having goals that we are working towards gives us a concrete reason to be faithful in our finances.
What about you? What is one lesson you have learned about managing your money well or meeting a big finance goal?