My Biggest Money Obstacle

(We all get stuck in different places…)

The hardest part of getting out of debt, for me, was not stopping going out to eat or treating myself with manicures and pedicures. I used to think everyone had the same problem: you spend too much money – more than you make – but everyone has a different financial journey. Along my financial journey, I learned something about myself that honestly shocked me:

I’m a saver, not a spender.

As it turns out, some of us naturally like to save our money, but “savers,” as the financial industry likes to call us, can be in debt too. Savers can make huge money mistakes too and have difficulty overcoming large financial obstacles, such as debt.

When I started my financial journey, I did have to cut my spending. I thought cutting my spending would feel like going on a cauliflower diet sprinkled with beans and rice.

(…although many a-cheerio was consumed…)

On the contrary, it felt so easy to cut my spending that my friends questioned my sanity because I no longer paid for “necessities” like internet (“Guys – the library has internet”).

But cutting my spending wasn’t enough. In fact, it was so far from enough that I racked up an additional $14,000 in debt! Yikes. This happened because my focus wasn’t staying out of debt, it was getting out of debt. The difference between the two finally dawned on me when The Budget Mom put out an Instagram post where she asked viewers:

“What is more important? Getting out of debt or staying out of debt?”

“Staying out of debt!” (paraphrased)

Finally, I decided to take the advice from the hosts of the How to Money podcast. They suggested the order of operations:

  1. If your company offers a 401k match, take advantage of it (my company offers a 4% match which is standard)
  2. Build an emergency fund of about $2,500 (my emergency fund is $5,000 because that number makes me feel comfortable)
  3. Pay off high interest debt (anything above 7%)
  4. Save 3 to 6 months’ worth of living expenses
  5. Invest in one of your big money goals, such as saving for a home

Before implementing this advice, I had devoted all of my cash towards paying off debt. This turned out to be detrimental because, inevitably, something would come up – I had to replace carpet in my apartment, my dog needed a trip to the vet, something on the car broke – you get the idea. Life happens. When life happened for me, because I didn’t have an emergency fund, I went into debt. My credit card saved the day instead of using an emergency fund for – you guessed it – emergencies …because I didn’t have an emergency fund.

Once I came to my senses and created an emergency fund of $5,000 (because $5,000 made me feel safer than the recommended $2,500), whenever something came up, such as travel expenses for my grandmother’s funeral, I simply transferred the required amount to my checking account and used the funds I already had available.

This saved me from building additional debt. It even cured me from worrying incessantly about paying interest (I pay very little interest due to refinancing debt, but interest is still a source of anxiety). I still have money concerns, and I would still like to pay off my debt, but I truly learned the lesson that Mindy from Bigger Pockets Money podcast tries relentlessly to convey to listeners:

Personal finance is personal!

(You’re allowed to be unique – even when those around you can’t relate.)

Your journey will look different from everyone else’s journey, so don’t let setbacks stop you in your tracks. Learn to realize that you, as an individual, will have money obstacles unique to you.

Don’t give up!