3076: Would You Go This Far To Pay Off Your Debt by Cynthia Meyer with Financial Finesse on Frugal Living

[00:00:00] Have you ever noticed how a calm mind can really set the stage for a good night's sleep? That's the idea behind our new podcast, Good Sleep. Greg, our host from Optimal Relationships Daily, is here to help ease you into a peaceful night's rest with some positive affirmations. And these affirmations aren't just comforting. They can help ease anxiety and nurture positive thoughts, setting you up for true good sleep.

[00:00:25] So press play on Good Sleep Tonight, because a good tomorrow starts with a good night's sleep. Just search for Good Sleep in your podcast app and be sure to pick the one from Optimal Living Daily. It's a Minimalist Monday edition of Optimal Finance Daily. Would You Go This Far To Pay Off Your Debt? By Cynthia Meyer with FinancialFinesse.com. Do You Feel Like The Stress From Your Credit Card Debt and Student Loans Is Out of Control?

[00:00:55] Perhaps you're wishing on stars for a lottery win or an unexpected inheritance which will wipe your financial slate clean. Maybe you're putting off going to the dentist or taking a vacation so you can pay your credit card minimums. If you're sick and tired of living this way, ask yourself this question. Am I ready to do whatever it takes to pay off my debt? You are not alone.

[00:01:19] You are not alone. Our research shows that nearly one in four employees, or 23%, reports unmanageable financial stress. No age, gender, income level, or demographic group is immune from financial mistakes. However, the reverse is also true. Millions of people of all ages, genders, income levels, and demographic groups have successfully tackled their debts and gone on to build very comfortable financial lives.

[00:01:46] I know because I'm one of them. In my early 30s, I was a renter with credit card debt, student loans, a damaged credit score, and a lifestyle beyond my means. Twenty years later, I'm a financially independent homeowner, real estate investor, and committed saver who puts away 30% of my income. My journey to find financial balance inspired an entirely different career as a financial planner and led me to meet my husband.

[00:02:13] It all started with my personal declaration of financial independence and my vow to make whatever changes were necessary to dig myself out of the hole I was in. Big changes get big results. How did I do it? Initially, I tracked my expenses and made small changes that saved $5 to $10 per day. I made coffee at home, gave up magazines, canceled the gym membership, etc.

[00:02:39] My fellow planner, Kelly Long, had similar experiences of cutting small luxuries when she was tackling debt. Although I was proud of myself for making changes, after a few months, I grew frustrated. I didn't feel like I was making progress quickly enough. That's when I decided that only making drastic changes would get the outsized results I was seeking. Here's what I did. Number one, I downsized my living space.

[00:03:05] I had a beautiful, spacious rooftop apartment with a deck, a view of downtown, and a short walk to the lake. I gave my notice and moved into the home of some friends for three months while they traveled overseas, then rented a room in a two-bedroom house for a few years. I saved about $600 per month in housing costs, even if my dignity suffered a little initially, and ended up with a fun housemate. After a few years, I moved back into my own place.

[00:03:33] But instead of choosing a spacious downtown apartment, I chose a small studio. If you're looking for some wiggle room in your budget to pay down debt, looking at living expenses may make sense. Is it time for you to downsize your housing? Number two, I took walks, hikes, and hosted potlucks. As a single woman in an urban area, I had grown accustomed to a social life built around discovering new restaurants, movies, and meeting for wine or coffee.

[00:04:01] That was a lot harder to change than my living space. What would I do for fun? I set parameters for how much I would spend on entertainment per week, about $50 for a savings of around $300 per month, and began to find new ways to connect to my friends. I was proactive, suggesting meeting for a walk instead of Thai food. When friends invited me to dinner or to an event, I politely declined if I'd met my entertainment budget for the week.

[00:04:29] Parties became potluck dinners, which friends liked because they saved everyone money. There is a secret financial power in home cooking. And number three, I gave up my car. A few years into my financial transformation, I was making excellent progress. I had moved back into my own place, up in the hills where there was no closed public transportation. Then a twist of parking fate compelled me to give up my car and to not replace it. I walked almost everywhere,

[00:04:59] a relatively easy thing to do in a big city, and took buses and the train. I will admit there were occasional moments of embarrassment, such as when I sprained my ankle and friends at work had to drive me around for a few weeks. I chose to explain my decision by saying I wanted to walk more for fitness. This saved me about $300 per month compared to what I had been spending. I'm not the only planner who's done this, by the way. My financially savvy colleague, Eric Carter, went carless last year.

[00:05:28] How much did I save altogether from these big changes? More than $1,200 per month between reduced housing costs, giving up my car, and capping my entertainment expenses. That's four times as much as I had been saving by cutting small luxuries. Thanks to my willingness to reconsider the necessity of the most expensive items in my spending, I was able to pay off my debts much quicker and save thousands in interest charges. Tackling debt can feel like climbing a mountain, it's true.

[00:05:59] But adventurous souls climb mountains every day. Consider making some big changes to climb that debt mountain faster. Trust me, you'll feel great when you get to the top and look around at how far you've come. You just listen to the post titled Would you go this far to pay off your debt? By Cynthia Meyer with financialfinesse.com ServiceNow unterstützt Ihre Business Transformation mit der KI-Plattform.

[00:06:27] Alle reden über KI, aber die KI ist nur so leistungsfähig wie die Plattform, auf der sie aufbaut. Lassen Sie die KI arbeiten, für alle. Beseitigen Sie Reibung und Frustration Ihrer Mitarbeiter und nutzen Sie das volle Potenzial Ihrer Entwickler. Mit intelligenten Tools für Ihren Service, um Kunden zu begeistern. All das auf einer einzigen Plattform. Deshalb funktioniert die Welt mit ServiceNow. Mehr auf servicenow.de slash AI for people. As someone who got out of 30 grand of debt in 11 months,

[00:06:56] this topic is one very close to my heart. One thing I'd like to offer up here is that our internal dialogue about our debt and spending has a powerful effect on our actions. So if we're telling ourselves that we have to make great sacrifices, that it's going to be a struggle to get out of debt, and that it's going to be a ton of hard work, there is a tone of negativity there that might thwart our efforts. What worked well for me was staying engaged with the excitement

[00:07:25] of paying off my debt by focusing more on what I'm gaining versus what I was losing. I think framing things in a positive way and genuinely having a real preference for my frugal habits versus seeing them as a sacrifice or burden made the process so much more enjoyable. So for example, I started cooking nearly every meal I ate and really enjoyed my experiments in the kitchen. Or when it comes to clothing, for years, most of my clothing came from clothing exchanges with my friends.

[00:07:55] They were so much fun. And totally free. I actually much prefer hosting a clothing exchange to going shopping or buying new clothing. With every challenge comes incredible opportunity to learn about ourselves and grow into our full potential. Yes, debt reduction is a challenge, but it doesn't necessarily have to be a struggle. And that's a wrap for another Monday show. Have a great rest of your day and start to your week. And I'll be back tomorrow where your optimal life awaits.