How we tackled debt together and have a better relationship because of it.
Previously, we wrote about how we easily we managed to get into debt. Tackling debt (or money in general) is something that not many of us like talking about. On the contrary, everything else that involves getting into (more) debt is part of our daily conversations such as going away on another “well deserved holiday” or buying stuff as we have been “working really hard” for.
Saving money isn’t exactly an interesting conversation topic to bring up with anyone, and we get it, holidays and shopping and the great debate between our needs and wants are much more fascinating. In a way, we think that selectively addressing finances and money matters is a form of avoidance, the easy way out – escaping from actual reality.
It’s not until we actual sat down one Sunday morning and started discussing “the future” that we found ourselves talking about money. We made a commitment to address the good and the bad side of our financial situation.
We laid it all out, how much we had and how much we owed. Unfortunately, the latter was much more. We started to ask ourselves, how did we get into this situation? How do we get out of it? We decided to take immediate action. We researched everything online to learn more about what we could do. What we found in an hour was pretty much all the same, debt consolidation, cut up your credit cards (so you can no longer use it) and pay them all off.
It was not until we put an action plan together. First, was to pay off the highest interest debt (normally a credit card) and pay minimum amounts on the other debts. Once that credit card was paid we cancelled it straight away and put the amount we were paying onto the next credit card. We followed this simple step until all of the debts were paid off.
What we learned from all this was really quite simple:
There is a big difference with what we want versus what we actually need
It was such a pivotal moment realising this as we confused our wishes and desires as a “need” but in fact, they were not at all necessary to survive and live. We were so determined to fix our finances that we were able to truly reflect on where our money was going and what are we actually spending it on.
Sometimes we are so focused on what we want, we miss the things we need
We always seem to want more, forgetting about what we already have and continue to search for things that we don’t necessarily need… which then triggers a cycle of blind consumption, contributing to increase in debt.
We found that this was quite the norm in our westernised society (getting into debt that is). Debt levels around the world continue to rise as we are obsessed with debt. We put everything on credit then worry about it later.
We consider ourselves as being quite simple and uncomplicated (although, we never always have been). We don’t have flashy cars, expensive belongings and yet found ourselves in a situation where we were drowning in the never-ending cycle of spending. When we look around and see how other people live their life; most of the time we think that it’s either they are on a good coin or are heavily in debt.
We were on good salaries, yet we kept wanting to earn more in order to be able to purchase more. It was a vicious cycle. The more we earnt, the more we wanted. We just didn’t know when to stop, there was always something new, something better, something else to buy.
To keep up with our spending, we figured out that holding down high paying jobs physically and mentally burnt us out.
It was difficult at the start but we knew what we needed to focus on so we kept holding each other accountable to change our financial status.
This is how we did it…
Food – We decided to have meal preps done for the week, this included breakfast, lunch, dinner and snacks. This was a 7-day forecast including the weekend Currently, we spend between AU$100-AU$150/week on our food. Significantly a lot less than what we were spending previously. That extra AU$2,200/month was going straight into paying off debts.
Subscriptions – Somewhat easy as all we had to do was make a few calls, send a few emails and letters to cancel anything we were paying for that we considered wasn’t necessary. We had 2 mobile phones, laptop and an iPad each. We sold and cancelled all of our extra devices, subscriptions and memberships to pretty much anything that was on automatic debit from our account on a monthly/yearly basis. The only few things that remained were utilities and necessary insurances, that’s it. Wow. After a month, it felt like we just got a pay rise.
Stuff – We set an amount of how much we can spend between the two of us per month. This enabled us to really eliminate purchasing unnecessary items, knowing that once we spent the set amount for the month that was it and we had to wait till the following month if we wanted/needed to purchase that particular item. In most cases, it was more of a want than an actual need. We became more conscious about what the item is for and if it’s an absolute necessity for survival. Some may find that extreme but it’s a mental exercise that we swear by.
Saying No – Goodbye social media! Yes. Goodbye (and good riddance) to the pressure of being bombarded with events, advertising, and what’s trending. Focus on you. Focus on your life. Stop trying to please others. Stop following what others are doing, you only have one life to live.
We were pretty ruthless and strict in making sure we did everything possible to realise our goals. We worked as a team – we had to be disciplined and supported each other so we can both be reminded of what truly matters…
Things that matter most must never be at the mercy of things that matter least