My little blog is two months old today, and to celebrate this tiny milestone (why not? who doesn’t love celebrations?) I decided to write a blog post about how it all began. By all I mean my journey to debt freedom and financial independence, and I’ll talk about the baby steps I took to embark on this adventure.
MAKE A DECISION
I realise now that the most important thing to do if you’re tired of being in debt is to make a hard decision to become debt free. Once and for all! This may sound easier than it is in reality. You see, I don’t remember ever hiding from the fact that I had debt, or throwing bills away without opening them because I was too scared to look what was inside. This isn’t about me.
I’ve always been good at making all my payments on time. Unfortunately, I was mostly making minimum payments on my credit cards, which means I still owe what I borrowed a long time ago. This didn’t particularly bother me, and I continued spending my cash on travelling, shopping, eating out and other joys of life. For years. Sure, I had thought about eliminating my debt and how great that would’ve been, but this didn’t materialise into anything until I have had enough of living from paycheck to paycheck and decided it was time to stop spending! What I’m trying to say is that sometimes circumstances force you to make a decision to become debt free, rather than this being your own choice.
Once the decision has been made, it was time to sit down, grab all my bank statements, a calculator, and a notebook, and spend the next couple of hours writing down all my debts, the minimum payment amount that was due every month and the interest I was paying to the bank. You can read more about this here. I had to call my bank to enquire about an interest rate on my credit card as I had no idea what it was. It was now time to look at my regular expenses. These included rent & utilities, transportation, mobile phone bill, cable TV, magazine subscriptions, etc. I realised that some of the expenses were unavoidable (like rent & utilities) and some (like magazine subscriptions) were not. So I cancelled the ones that I did not need. I also reviewed my unavoidable expenses to see if they can be reduced (this is still work in progress) and cut my mobile phone bill in half – I stopped making international calls and started using Skype instead. I also started budgeting to keep track of my money, gave up some luxuries along the way, implemented no spend days and, most of all came up with a plan to eliminate my debt. I am also looking for ways to generate some extra cash (I sold some unwanted items last month and increased the rent on the property that I sublet back in my hometown this month) while living a frugal lifestyle and paying off my debts.
I didn’t know this great community of personal finance bloggers existed until I stumbled across Cait‘s blog, Blonde on a Budget, back in May. Cait’s story is such an inspiration! I have started my own blog to help me stay motivated throughout my journey to debt freedom, and I’m so grateful for my readers and all the comments I’ve received so far. I’ve found other amazing blogs since then, including Laura‘s from No More Spending, Wendy‘s from Girl Meets Debt and Tonya‘s from Budget and the Beach who have been very welcoming, kind and supportive (thank you, ladies!). I know there are many other great blogs out there, and I cannot wait to read them all!
I may not be “an aggressive debt eliminator” like some bloggers out there who are doing amazingly well. It will take me over two years to pay off my debt. But I have a goal, I am taking steps (no matter how small they may seem) towards achieving it, and I’m sure that with my hard work, a little inspiration and your support, I will get there in no time!