Updated: Nov 9, 2020
Living Beyond My Means
I recently saw a post on Instagram that stated 'wealth is accumulated by money in vs less money out' - it struck me, how many of us go through our lives, especially childhood and young adulthood believing that wealth is defined solely by money in, a good wage, someone who can afford luxury things. It's what I believed, and it is ultimately what lead me to having a high-earning career, I was earning more money, therefore I could buy more things. I bought more things, I bought more expensive things however I was still unsatisfied, I never had any money left (and I was paid weekly!) so I just figured I still wasn't making enough money, I needed more. More money, nice things, and a savings pot would just magically appear.
I felt I never had enough, however looking back I had accumulated quite a nice little cushion. Ultimately this was in my Help to Buy ISA, but without it my debt problems now would be 10x worse.
I quit my job and moved back to my hometown in search of stability (more about my career change here) I took a £24,000 pay cut and settled into quaint, historical town life. I was excited to see my friends, I was excited to start dating and I was very excited about buying furniture. I treated my friends to drinks, took my date on nice meals out, and spent a small fortune in IKEA. I was still living my £44,000 life.
Budgeting and the Debt Free Community
As you can imagine, living my £44,000 life on £20,000 didn't last long. A month past, I had maxed out my credit card. No worries, I've got savings, and I can always apply for a new credit card, this is just the cost of relocating! Another month passes, I've opened that credit card. Month three, I've dipped into my savings to get by.
Month Four, I spotted an Instagram account that kept popping up, I watched their stories night after night, they were tracking their daily spend. I remember the first time I saw this I thought 'they must be poor, poor people have to budget' but as I watched these stories I realised, I was poor. My money mindset was making me poor. This Instragrammer was the wonderful The Money Fox.
Now anyone who knows me will know how much I LOVE a spreadsheet. I'm one of those weird people who enjoys doing their tax return, so the idea of creating a budget actually enthralled me. It had colours, it had categories and it had graphs. After the first month of budgeting (I still was spending more than I was making) I found the Debt Free Community, and through that, a billion and one blogs titled 'how to make money online' 'quick ways to earning extra cash' 'I earned £12,000 through matched betting' - oh wait, what now, £12,000 tax free? OKAY!
I still had the mindset that I needed to make more money in order for my finances to work. I started matched betting, and by month three, you guessed it... I was STILL spending more than I was making. But considerably less dramatically.
What I'm Doing Now
The most important thing to know about this journey, is that you're not going to be perfect right away, it takes time to learn how to budget, learn what kind of spender you are, learn tips and tricks to saving money on the everyday. It's taken me months to get to a point where I know I am spending as little as I can and I'm paying off as much debt as I can. I still have a long way to go, but being part of the Debt Free Community, I know I am in the best place, surrounded by the best people, to motivate me, empower me and teach me.
I stopped doing physical budgets. Having to put in numbers that meant I was going 'over budget' or not doing as well as I envisaged, was hurting my motivation. If I thought I wasn't doing well, I would just give up. Now I use Yolt to do my budgeting, I don't need to touch a thing, and it just tells me how I'm doing. I'm focusing on educating myself about finance. Currently I'm studying a personal finance course from the Open University, and I endeavour to keep learning, keep educating those around me.
That's the thing about the #DFC, we're all educating each other, ensuring nobody gets left behind.