Becoming Debt-Free: the MOST EFFECTIVE methods we used

hey Frugal Friends Hillary from homegrownhillary.com here today I wanted to talk to you about one of the biggest things that ever happened to our family in 2020 we became debt free except for our mortgage and let me tell you it has been such a huge weight off our shoulders and I know what it was like before so a quick recap of our story when we got married in 2018 we had about forty thousand dollars in debt and that was car loans both of us had brand new cars for some reason when we were young people we thought it would be a good idea to both buy brand new cars we had student loan debt we had credit card debt and we realized that if we wanted to get anywhere we needed to get rid of our debt we paid it off in two years and that was also the time frame where we had two children so we had to pay for all of their bills and medical expenses that comes with children in cash those two years too so it was quite a bit more we had to spend than 40K today I just wanted to talk to you about the six most effective things we did to get where we are now because I know what it's like being in the trenches and everything feels really overwhelming and so I just wanted to give you some tools for your toolbox first thing we did to get out of debt was I stopped couponing I know you're thinking wait hold on I think you're supposed to start couponing to save money no I stopped coupon I was buying newspapers and getting all these little periodicals I was trying to find cash back apps on my phone I was trying to learn the ropes and figure it all out and all that happened was I got frustrated and angry and I felt like a failure food companies want you to feel like you're playing and winning a game when you use coupons but they're really the ones who are winning do I still look for coupons and hope that they might be useful yes do I still sometimes occasionally use them yeah but let me tell you for example this week Huggies has enough coupons to bring a pack of diaper price down in half it should be 22 dollars and it was eleven dollars still less expensive to buy generic brands all in all not couponing actually saved me hundreds of dollars because I wasn't buying the newspapers anymore I wasn't trying to spend more money on the name brand products and then sometimes the coupons wouldn't even work and you bought it anyway I ended up finding a much more effective strategy than couponing to save me money at the grocery store but I'll get to that in a minute second thing we did as a family is we set a zero based budget if you're not familiar with what a zero based budget is it's very simple you basically just say where every single dollar is going to go in a month and you're probably thinking Hillary why isn't that your number one tip isn't everyone saying budgets you but at the end of the day a budget is just a plan you're writing down it only works as far as you have habits to support it so if we made a budget without adjusting our habits we'd either a b lying which means we're just wasting a ton of time or B we would be like only semi-effective because we still had all of these big spending habits budgeting does do something I mean there's a reason we talk about it you have to write things down start tracking them and you realize holy cow I had no idea I was spending so much on this category I mean those were things we needed as a couple but they just weren't the most effective strategy we used to get out of debt you know what I mean third thing that really helped us get out of debt was being on the same page as my husband so when we were dating we had our own financial goals we didn't talk that much about money I mean we did some um but we really had our own separate Financial lives and first for the record that is a good thing if anyone is out there trying to control your finances before you've put a ring on it that's a pretty big red flag but when we got married we knew we wanted to come buying finances just like we were combining every other part of our life we just didn't know how and so we started with the Dave Ramsey program a month after we got married and that really gave us a common framework common language to use to talk about money we realized we didn't know anything about credit or insurance or high yield savings account like all of these things that we should have definitely known before we were 25 and let me tell you realizing how much I didn't know as a full-grown adult is what really pushed me to start teaching my high school students more about personal finance when I had them in my classroom so once my husband and I learned how to set goals together and prioritize together we realized that we could get a lot further if we were both chugging in the same direction and it was only because we both decided that we wanted to be debt free that we're even here now the fourth most effective way we got out of debt hear me out usually when you hear people talking about getting out of debt one of the first things they talk about is stop getting your latte I just want to say from the outset if you and the person you are getting on a debt-free journey with together have a shared value of morning lattes from Starbucks that's okay that can be your shared goal but it wasn't our shared goal and especially because neither my husband nor I realized how much we were spending once we cut it out we realized we had a huge amount of money do we could use to put towards debt every month we knew getting takeout dinner was expensive but I didn't realize how much over the course of a month I was getting breakfast pizzas at the gas station next to where I was teaching or like a brownie at the grocery store on my lunch break I didn't realize how much all those little impulse purchases because they were so impulsive they didn't register in my brain as anything I did some quick napkin math and I estimated that I spent thousands easily on just quick trips at the gas station little uh bites to eat out for breakfast and lunch when I was a teacher and before we learned to get out of debt and I cringe when I think about that because that wasn't my most important value and I my actions were not lined up with what I actually valued and I just wish I knew more about how to line up my actions with my values talked to little Hillary and explain things to her but once we figured it out once we had our budget and we saw everything that was happening in that direction we could cut it out and start putting that money toward where we actually wanted it which was on our debt I had food at home and usually when I should have been but I ate the greasy and then I wasn't hungry and then all of the food I had at home well not all of it but you know what I mean a lot of it was going to waste and so actually I was I was wasting twice as much money some on the more expensive takeout gas station stuff and some on the food at home that ended up going bad which is a shame for many reasons thing the next I've lost count I know I wrote it down somewhere I think the next is upskilling we both had bachelors allergies but we knew we wanted me to be a stay-at-home mom both of us thought that was really important for any children we might bring into the world and my husband's degree was in philosophy and he didn't want to work in philosophy or do anything related to the field we decided as a team that him going back to school was not in the best interest of our family and so we had to think okay what are some other ways that we can build skills not just him but me too build skills that have real world value and not just get a second job so like start working like two different retail jobs or two different like no skill jobs figure out ways to build valuable skills and then get a job related to that so my husband went and he earned himself some I.T certifications he got himself a job at a help desk and then he just worked his way up from there and that's where he's currently at I started freelance writing on the side when I was still teaching and I used that as like a nice side gig and I swirled that money away and that was going toward debt I learned things like online marketing and SEO and I used those to build articles for clients I wrote a few ebooks when I quit my day job teaching I had that set of skills to fall back on as a secondary source of income if and when I needed it at the end of the day and this is obviously this is a Frugal Living Channel I love talking about saving money and you can save money till the cows come home but if you don't have enough coming in it doesn't matter how much you save so you do need to find ways of bringing in more income at some point by the way if you're liking this please leave a like in the comments so I know that it's valuable to you and you can help it spread to more people so thank you all right you want to know what the most valuable thing the most effective thing we did to get out of debt was finally get control of our grocery spending when I was in college single not even engaged yet I I just wandered the aisles of the grocery store and I grabbed what felt good and I I had a list I remember I had a list like oh you're out of milk but aside from that I just grabbed what kind of looked good I have absolutely no idea what I spent on a given week for groceries aside from the fact that it was at least 60 a week just for myself so if you didn't know the USDA has this great little tool called the food at home cost indicator and they publish monthly reports on how much food costs in America at any given time on average and they have four different levels they break it up into a a liberal spending plan a moderate spending plan a low spending level and then the Thrifty plan which is also which they base the food stamp budgets off of for the year if I was spending 60 a week in 2015 that put me at the moderate level of spending which is like the second to highest guys I now spend about half of what this USDA cost indicator thinks the bottom of the barrel is they think a family of my size I think just did the math they think a family of my size should be spending eight hundred and sixty dollars a month and our budget is 500 a month and that's for me my husband my two toddlers I've got one coming but he doesn't count yet so say it with me meal planning works keeping a price book Works looking at sales and figuring out when things are going to be at their lowest price works if you're wondering where your money is going each month you're probably eating it I was and we don't just eat cheap processed crap that's actually not the most financially sound thing either when I got married I got this burst of energy to start doing all these wifely things like I tried to learn to sew and bake bread and I don't know dust and that is when I had learned that I had been doing grocery shopping completely wrong I started planning my meals I started tracking sales I started tracking which stores had the best prices on which kind of products I looked at all the different options around me and I basically gave myself a tax-free raise because all of a sudden we had hundreds more dollars in our budget every month funny how that works I have an article on my website talking about how to create a price book which is basically a way that you can comparison grocery shop if that's a topic that's interesting to you you can let me know in the comments that'd be helpful but I did some math when I wrote that article and I calculated that I saved at least 11 000 just by changing our grocery shopping habits over the course of two years when you look at the way I used to grocery shop as a single person and compare it to the way I grocery shop now factor out the difference eleven thousand dollars in two years and the year is now 2022 and groceries are a heck of a lot more expensive now than they were in 2020. my grocery shopping habits haven't changed aside from I do do grocery pickup more it does cut back on impulse spending which is even better all right those were the six most effective things we did to get out of debt in two years I have a kid who just woke up upstairs so I will have to see you again another time bye YouTube

Channel: Homegrown Hillary

Views: 8,764

Keywords: debt-free, debt free, debtfree

Id: HEywAKCTdSE

Length: 12min 16sec (736 seconds)

Published: Sat Jan 14 2023