Debt

10 Things to Expect During Debt Repayment

Don’t expect everyone to understand or agree with your wanting to pay off debt. If you are seeking approval for your decision to aggressively attack your debt, be careful with whom you share this information with. Most people are deeply indebted and live paycheck to paycheck, and who can blame them, it is socially accepted and never discussed publicly. However, if you want to get a thumbs up on the debt repayment journey you are about to take, consider carefully who you share this news with.

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Hit the Refresh Button on Your Finances

If you are one of the many bloggers that worked to pay off your debt, then you know the sweet feeling that debt freedom can bring. Congrats by the way, for accomplishing an awesome life changing goal.

However, you might also realize that if you are not careful, old habits start creeping back. It might be using the credit card and not paying off the balance in full, not making monthly payments towards your savings (this is why pre-authorize monthly contributions are so important), tracking your spending or sticking to your budget. Whatever it may be, we all have our achilles.

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Why Getting Out Debt Won’t Solve Your All Your Money Problems

When my husband and I started our debt repayment journey in mid 2013 I though that getting rid of our debt would create a new beginning for us. One filled with less money problems and 100% unified spending decisions. Wait, let me rephrase that…I thought my husband would continue to subscribe to my super saver/ aggressive debt repayment approach to managing money. Well I was wrong.
One thing we did agree on was that our debts had to go. Everything else after that was up for negotiation.

Its been a compromise, but one I am willing to make because we both give up a little of what we want but our long term financial vision is still the same.

During the 2.5 years we diligently worked to pay off $120,000 of debt, our spending decisions were made for us. Everything and anything extra pretty much when to paying off the debt. Because we on the same page about this, operating this way for those years made it feel like even after the debt was paid we would agree on our spending and saving decisions. However, the reality was far from this truth.
Once we finished sacrificing for a common goal (getting of debt), our money personalities took effect and we became more of what we normally would be without the debt.

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What My Tax Refund Says About My Spending Habits

Receiving windfall income and deciding what to do with the money can reveal a bit about our money personality, financial savviness and priorities in life. It can also address whether we are living within or beyond our means. If you are expecting a tax refund this year, here are a few questions that you can ask yourself:

How do I plan on using my tax refund this year?
Will what I decide to do with my tax refund increase my net worth, either by paying off debts or increasing my assets by saving/investing the money?
Will I use my tax refund to cover an immediate expense? How can I cover this expense another way in future years?
Do I have a fully funded emergency fund? If not, how do I plan to fund an unexpected expense?

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5 Financial Guidelines We Follow in 2017

As we became more intentional about how we spent our money, we came up with some financial guidelines this year that will ensure that we don’t find ourselves in a similar financial mess as in the past. These principles provide us with some framework when making family decisions about saving, spending and debt. As our family and income situation changes, we will develop a new set of guidelines to follow that help create healthy boundaries in our savings and spending habits.

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