Many families today struggle with debt. College loans, car loans, credit cards, medical bills, mortgages, and other personal loans can easily add up to a lifestyle of struggle and stress.
Total household debt in America during the first quarter of 2018 was $13.21 trillion—the 15th consecutive quarter with an increase—according to the Federal Reserve Bank of New York.
I asked Baggerly about her journey to becoming debt-free.
At the time we were sending over $1,400 to debt in minimum payments each month. And that didn’t even include our mortgage. So we buckled down, cut back on our spending, and worked to change our family’s future.
What I have come to learn is that every situation is unique, so we found what worked for us. That meant that we had about $3,000 in savings and then we worked our debt snowball. This method involves listing out your debts from smallest to largest. We paid our minimum payment for each debt and then paid any extra money we could to our smallest debt. Little by little we conquered our mountain and ended up debt-free in August 2016.
The summer months and holidays were the hardest times. I wanted to go on vacations and it was difficult to see everyone else take fabulous family vacations. But we did our best to stay on track with our budget and debt snowball.
When it came to my children, they didn’t know any different than the lifestyle we were living. Thankfully they were both very young and still didn’t fully understand how our life might have been different than others. I knew that it would be easier to tackle our debt when our boys were young and not aware that they were “missing out” on vacations or extravagant gifts.
I realized that they don’t really know what that means. So to help them understand, we started a contributions chart for them. Each child has contributions that they must make each day. They range from picking up toys and cleaning the dinner table to speaking in a kind voice. They are paid each week based on whether or not they were able to complete their contributions a certain number of times.
When they are paid, they must set aside part of their income for giving, saving, and spending. So now when our son asks for a new toy, he goes to his little bank and counts his money to see if he has enough spending money to buy the toy!
But I had to learn that I can have those things when I budget for them. And when we were on our journey to becoming debt-free, it meant that I rarely got those things. I had to teach myself to say no to the things that I wanted in the present moment so that we could build a better future for our family.
And let me tell you that there were times when I failed and ended up spending $200 at Target! I was certainly not perfect, but this life isn’t about being perfect. It’s about making progress!
Secondly, I have personally benefited from this journey by learning just how passionate I am about saving money, paying off debt, and teaching people how to make it happen! My full-time job is teaching, and I love that I have learned how to take my passion for teaching and my passion for finances and put them together.
But as I grew more and more passionate about budgeting, I knew that we couldn’t be the only family facing this mountain. So I started by talking about it with my friends and family. And after several years of talking about it with them, I’m sure I became quite annoying! That’s when a family member talked with me about the possibility of helping others. She encouraged me to reach thousands and inspire others to live a life on less.
Once that seed was planted, I couldn’t give up on it. I started Inspired Budget and began sharing as much as I could with others. I began creating printables and products to help people reach their financial goals.
When you learn how to make a budget that fits your needs, you will find extra money to be able to send to debt each month. It’s almost like magic! You don’t realize how much you are spending until you sit down, write your budget, and track your expenses. It’s worth the time and effort because I can promise you that it will end up being the pathway to your financial goals.