Hitting Financial Rock Bottom | How We Stopped Living Paycheck to Paycheck

let's talk about the time that I hit Financial Rock Bottom woke up and decided to stop living paycheck to paycheck today's video is brought to you by achieve my debt wakeup call came when I was pregnant with my first son I realized once I paid for child care and health insurance I would only be bringing home a few hundred a month but because we were in so much debt we couldn't afford for me not to make that money because even though it wasn't much it was the difference between us making our minimum payments and not being able to our life was a NeverEnding series of monthly payments I can still go back to those moments and it feels like the air is being knocked out of my lungs I felt so hopeless and alone and I know that so many of you feel that way too but you're not hopeless and you're not alone achieve could help you achieve helps everyday people like me and you deal with debt and get more cash flow they understand the struggles of everyday life and that debt can come at you fast chieve offers several tailored solutions that could help you cons validate or even reduce your debt whether it's a personal loan a home equity loan or debt resolution achieve meets you where you are let achieve Empower you on the path to a better financial future click the link in my bio to learn more everyone today we're going to talk about my debt wakeup call my debt Rock Bottom the day I decided to stop living paycheck to paycheck all of those things this is always a hard story for me to tell but I'm hoping that it will help one of you okay so this is something that I have touched on before I did a podcast episode about it in an old video which is now gone um it was this bad sound quality my kids were in it and so it has been removed but I wanted to talk about how we stopped living paycheck to paycheck and what our financial Rock Bottom story is so I lost my job the company that I was working for folded and my husband took a $7 an hour pay cut on the same day on the same day you know how I learned that the company was folding we went to deposit our paychecks and we're told that they were no good so we had actually worked for a couple weeks that we were not going to be compensated for and they said oh they had just bought brand new computers they said take your computers home in L of payment cuz you know the bank accepts an iMac for for your mortgage that's how that works but we were just a little bitty babies in our early 20s fresh out of college and we were facing a road block and part of the roadblock was because we had not been financially responsible and we were not prepared to weather a disaster but how do you know you're going to lose your job and your husband's going to take a pay cut in the same day so we had credit card debt we had student loan debt we had no emergency fund and we had bought a house right after we got married why I I don't know I don't know I don't know so cut to our navigating a job loss that we weren't prepared for and what did that mean for us more credit card debt yay so I took a job working overnight at a grocery store because that was the fastest job I could get also nannied and that left most of my weekday free to go on job interviews and apply for jobs and I eventually did get another job in a newsroom that paid next to nothing but had health insurance it wasn't great health insurance but it was health insurance y'all your 20s are brutal you could not pay me to go back 10 years in time I would not do it about a year later I was working in The Newsroom uh we we were just kind of getting our heads above water or so we thought um and we were trying to sell the house that we had bought when we were young and stupid we had had the seller fall through it had just been a nightmare and then my father-in-law died very suddenly and very unex expectedly and my husband and I go back to his hometown for the funeral and we're sitting in his childhood bedroom and my cell phone rings and it is our insurance company telling me that they can no longer cover our home because it has gone into foreclosure and it's not like it was a surprise but it was still it it doesn't matter how bad things have gotten it doesn't matter you know like you know you've you're you're struggling to make your pay payments you know that but still something about getting that phone call particularly in those circumstances just felt like the worst possible thing that could happen we go to bed that night I think the next day was my father-in-law's funeral I get on the banking app we are negative in our checking account um because all of our bills had just come out and we have like $126 in savings and it's like we can't we cannot not continue to live like this and so that's kind of like part one of the moment that we decided um and so I started freelancing taking on as many hours in The Newsroom as they would give me working that overtime working as a sports reporter on the side worst sports reporter ever if you're having to Google what plays are as you're writing an article but I was determined to hustle my bustle and get us get us back where we needed to be we ended up not getting foreclosed on but we did short sell our house which is no less horrifying um it just doesn't impact your credit the way foreclosure wood we're paying all of our bills we are adding some money into savings I get pregnant and I know my insurance isn't going to pay for much and so I start putting every single extra penny that I can aside to pay for the birth of my baby which cost $111,000 I got a discount actually I called the hospital and said if I pay my bill in full can you like take a little bit off the top and they did so I ended up only paying 8,000 discount baby that is actually more than the combined cost of having my next three children quadruple more but there are there were days where I felt like we're never going to get on the other side of this we are never going to get through this we are going to be in debt forever we're going to be passing debt on to our children what why it's not going to be like that it wasn't for us we paid off $36,000 in two years on one little income which I'll talk about in a second and it's not that's not going to be you forever either listen to me look at me take take my hand take my hand it's going to be okay it's going to be okay I know things are hard right now I know everything's expensive I know it feels overwhelming it's going to be okay let me tell you what we did I had my baby we're back in our little rental house up on the side of a mountain my husband gets a call from a company near where my parents live so we're living outside of Atlanta he gets a call from Alabama saying hey we heard you're awesome and we would like to interview you he gets offered this job on the spot and they're going to pay our insurance starting day one I don't want to move I don't want to move back to Alabama I don't want to I don't want to live in Alabama but we take the job and it gives us just some time like basically we're buying some time it's much less expensive to live down here we were able to pay very little in rent and we start saving money then I start a little side business as a virtual assistant my baby's 3 months old I buy a domain name for $13 I start this business I start turning a profit and we have extra money to put toward paying off of our debt but there are some things that we did in the me time and I've made notes so the first thing we did was make a list of our debts and this was hard for us to do so at this point we have student loans credit card debt I was in a car wreck while I was pregnant somebody was texting and driving and hit me you have medical things because of that it takes forever when you're in an accident to get the insurance to cover things it's ridiculous like by the time we had that paid off we finally got reimbursed it was a nightmare admitting that there's a problem admitting how much you have in debt it's overwhelming but it is also freeing and so write it down write down who you owe credit card debt to what are your student loan terms how much do you owe on that is there medical debt are there personal loans car things that you put on credit at a store everything that you can think of everything that you can find pull your credit report if you need to you get three free ones a year and see who you owe money to Total it up it's going to be a lot it's going to feel overwhelming you may Panic a little but once you get it out there and you know what you're dealing with it's easier to overcome it you can't fight what you can't see look at it name it then we can tackle it put something into Google Maps and then you pull that pull down bar and it shows you the turn by turn directions that's what putting out putting all the debt on paper felt like like we make a left here we pay this off we make a right here we pay this off two we track our spending you can do this in a spreadsheet we did it in a composition notebook you can do this on an app you can do it in the notes app on your phone there are so many options now for tracking your spending and every day every day when you spend money do a money minute make sure it's come out of your checking account make sure everything matches up total up what you've spent track track track your spending number three this one's hard right now I want to be honest that getting out of debt you're years ago was easier than it is now but be brutal be brutal temporarily about what you cut sacrificing sucks okay but so does being in debt and so you kind of pick pick where it's going to be hard because the sacrifice is temporary and the debt can also be temporary if you make those sacrifices but if you choose not to that debt is a long-term commitment that you're going to have for the rest of your life so look at what do we really need and cut it as budget girl calls scorched earth like scorched Earth nothing special nothing extra nothing fancy unless it's your birthday that's what we did scorched Earth you get to determine what you cut and what you don't it's really up to you because it's your money um but just really going as Bare Bones as possible okay so we focused just on the basic necessities of our rent at the time uh we had a baby so keeping him in diapers um making sure that our basic bills were paid for you know our our bills were all covered and then at the time we had a newborn and then we had newborn and a toddler and then two toddlers so we were able to keep our grocery budget pretty low I know that's nearly impossible now but just keeping things as tight as possible and focusing only on Essentials and necessities food water electric gas to get to work I wasn't buying clothes um my kids clothes were hand-me-downs if I needed something I borrowed it so at one point a vacuum cleaner broke I asked my mom to borrow hers she's like oh I got this old one I don't like do you want it between you and me I think she went bought a new vacuum cleaner but I took it still have a ton of the hand-me-down furniture that outfitted that little rental house we were living in we learned to say no to things it was awkward um when people would invite us to do stuff the Jason had a lot of guys that started working at the same place he was that had worked at the previous place and he had known them since college and they would hang out and go out on weekends and go out to eat and do you know big things and we couldn't and we would have to say no and at the time he was their supervisor and so it was kind of hard for him as a supervisor to be like we're trying to save money we're trying to get out of debt um but it was worth it in the end we got invited to go on a couple trips with some people and we had to say no to that I do remember going to a wedding when I had my first son and staying in a hotel and my mother-in-law was staying there too and her like taking the baby for the night so that my husband and I could go out on a date and it just being like the biggest deal in the world I felt so fancy because it had been so long we also learned to get creative with our dates my husband and I still prioritize alone time and together time and so even when we didn't have two nickels to rub together it was still really important for us to do those date nights at home and so it was a lot of getting movies from the library or watching old TV shows in box set because we didn't even do streaming services at the time because we didn't want to pay for them and so just finding ways to do that or cooking different meals we negotiated our bills so there are a couple different things that I'm talking about number one we called our credit card companies and we asked for them to lower our interest rate and I will link below to a script that you can use to do that but we were able to get our interest rate lowered twice I also would call our cell phone company at the time our internet provider and I would see what kind of when I would see like new customer deals and I would say Hey you know we've been loyal customers we paid our bills on time can you offer us this discount sometimes they would sometimes they wouldn't sometimes they would say no we can't but we can offer you a little discount I am not ashamed to ask um we also took advantage of cash deals so things like car repairs um once we were out of debt and we bought our new windows that sort of thing I will still ask like do you offer a cash discount we sold things we sold so many things we put it on Facebook Marketplace we put it on Craigslist oh when I think about me meeting up with people to sell things on Craigslist now that just gives me the ick but um books so I'm a big reader I would get books at the thrift store I would read them and then I would resell them I kid when he outgrow his grew his when my kids would outow their clothes my maternity clothes um toys that they were no longer playing with and remember we bought a lot of stuff secondhand so we were buying it secondhand using it until we no longer needed it and then selling it I still kind of think of the thrift store as a storage unit like I don't need that I'm going to go get it from the thrift store when I no longer need it I'm going pass it on or I'm going to sell it oh side note my friend told me that she gets crockpots at yard sales for like $5 $10 and then when she has to take a meal to someone she's like here you go and here's a Crockpot like I said we found ways to make extra income I was working as a virtual assistant during my baby's naps at night after they went to bed early in the morning and I still do that now that is my primary source of income is being a VA that I've had a lot of experience managing time and so I when I talk about time management tips I know what I'm talking about but bringing in even just a little bit of extra every single month was a big deal and then also I kind of viewed anytime I saved money that was bringing in money because the reality is your income has to exceed your expenses in order to make this work and if your expenses exceed income we you have to find a way to make that difference and it is exhausting but it is temporary okay I would love for you to share your debt wakeup call with me leave me a comment below don't forget to check out achieve in the description thank you for being here and we'll talk soon

Channel: Lydia Senn

Views: 19,491

Keywords: Lydia Senn, five4fivemeals, Frugal debt free life, frugal, save money, debt free, frugal living, how to be frugal, how to save money, spend less money, how to spend less money

Id: C0sM9kEXGpo

Length: 16min 18sec (978 seconds)

Published: Wed Apr 10 2024