This is Episode #125 from The Money Mindset Podcast. Below is the edited transcript for easier reading.
You can listen to The Money Mindset Podcast on all major podcast apps, including Apple Podcasts, Google Podcasts, Spotify, Alexa and many others! Plus you can listen to all the episodes on the web at www.TheMoneyMindsetPodcast.com.
If you enjoy The Money Mindset Podcast
please leave us a 5 ⭐️ review on your player app!
Can You Pay Off Debt and Still Have a Life?
Recently I was working with a one-on-one client and she was getting a couple different settlements for different reasons and her regular job income did not cover all her bills and her debt. So she does have a second job, she’s working on some extra things as well in addition to that.
She does live in a high cost of living area and we were talking about some things to build into her budget so she has a bit more flexibility and can still enjoy her life.
Now, it was so exciting. She did pay off a couple of bills and while we were on our call, she paid one off that was $600 and some dollars and just did it while we were chatting.
She was able to free up a couple hundred dollars a month so that she has some more breathing room and her regular job covers her expenses but not the extra things like fun and hair and nails and Christmas and birthdays, like the extra stuff, right?
She is still going to keep working her extra jobs and things while she pays down her debt, but you know, we factored in $250 a month to get her hair done and then another like $250 for her nails and that is because it costs her like $500 to get her hair done. Can you believe that? That’s insane to me.
My hairdresser still charges me $65, which includes a cut and blow dry and style and she was telling me where she lives, like they are charging now just to blow dry your hair. That’s insane. Like come on people.
But we wanted to factor it into the budget and even though she had debt, she still had some money left over after we’ve paid off some bills and we’re going to create a plan for her to pay off that debt without using up all of her savings.
Life doesn’t stop for debt
Just because you have debt doesn’t mean that life is not going to happen. You do still need to save money for those things and you still need to save money, set money aside and plan for for those things that you still want to do.
You know, like your hair and your nails and things like that even though you have debt, right? And so you have to figure out what are some non-negotiables for you or some things that you still wanna include in your budget because guess what?
If you have a lot of debt and it’s gonna take you a couple years to pay it off and if you like having your hair nails done, that’s not something that you’re gonna put off for years, right? Like you’re gonna still get your hair done, you’re still gonna get your nails done. And so you just have to make a plan for that.
As long as you have the money in your budget that you can send to that, I’m okay with it. Now if you’re going into debt to pay for these things, that’s a little different, right?
But you know, a lot of people will tell you, oh, you can’t go out to eat, you can’t have any fun when you have debt. Like you have to eat rice and beans and all that. No, because guess what’s gonna happen?
You will lose the motivation to keep going because it’s gonna suck and you’re not gonna enjoy your life and you’re gonna say, what’s the point? I wanna go and do things with my friends, like I’m gonna, I wanna have a life.
You have to still enjoy some of your life, right? Like you’re not, unless you are going like all out extreme, like do it as fast as you can. Even if you do that, which I was kind of that way, like I stopped getting my hair done, you know, I didn’t get pedicures and stuff anymore.
Deprivation & Binge Cycle
But guess what happened when we paid off the debt?
We starved ourselves for 17 months and then guess what happened? We binged, we didn’t get money saved like we wanted to. Things kept coming up. We had to spend money on things that we had put off because we were in debt, these things still needed to be done, right? It didn’t go away just because we put it off.
So, we had to start doing those types of things and we just wanted to relax and enjoy our life a little bit, go out and have fun with our friends and not have to worry about pinching every penny.
And that’s what happens.
When you can finally like do the things that you wanna do because you’ve paid off debt, we have a tendency to go to the other extreme again.
And so if you’re able to make small changes over time and manage the money that you have in a realistic way, you’re gonna be able to just carry that through without any real change, right? Like you’re just gonna keep doing what you’re still doing.
If you have those things already built in your budget, then it’s not gonna feel like you’re starving yourself. It’s not gonna feel like you’re depriving yourself and you’re going to be able to maintain that in the long term.
Because if you were just like throwing everybody at debt and not having any fun when the time comes, you’re more likely to go to the other extreme and spend money and not save and all those other things.
And that happened to me like we’re like, okay, we need, it’s so much, much easier when you, I think when you are paying somebody else cuz you owe the money than paying, like putting the money into your own savings.
Psychologically it’s a little bit different unless you have like a specific savings, like what you’re saving for. Just saving in general I think is just harder. It’s harder to feel like, like, you know, I’d rather do these other things than just put money in savings just to sit there for no reason, right? It’s like, okay, when is enough enough?
You Must Have a Realistic Money Plan
So that’s why I still encourage my clients and my members to build into their budget a realistic plan. Like it needs to be realistic and something that you can maintain and not just, you know, cut everything out of your life for two to three years and then when you can’t finally do stuff you just binge, right? And you just go and you spend a whole bunch more money and you’re still not saving.
If you can do that now and then still have money left over to send to your debt, which I know is a lot of you, and if it isn’t you, you’re probably thinking I’m really dumb right here right now. Or like, come on Ashley, like I don’t have any money.
But we often feel like our situation is everybody’s situation. And so if you do have an income problem, then find a way to make some extra money.
Just like the client I was talking about, like her normal paycheck is not enough for all those extra things. So she’s willing to work extra for them.
Her kids are older so you know, she has a bit more flexibility and what she can do in her spare time, she has a unique skill, a specialized skill and she can charge a nice good rate for that hourly and it’s needed.
So you know, she is able to do that and make the money to pay off debt and still have those extra things in her life so that when she does start paying off debt, she’s going to have so much extra money and it’ll be easier to stick to the amounts that she has for fun and food and hair and nails and those types of things because she’s not like, she’s not adjusting that, right?
She’s gonna be able to take the money that would be going to debt and just do whatever she wants with it, you know, save it and things like that.
You Don’t Have to Go Extreme to Pay Off Debt
It doesn’t need to be one extreme or the other. The more you can build those habits and routines and that realistic plan for your life right now, you’re gonna be able to carry that over through your debt path journey.
And then once you’re debt free, you’re gonna be able to just maintain it still. Like you don’t have to make any drastic lifestyle changes or feel like you’ve deprived yourself for so long that you like just need to let loose, right? You just need to spend this money on these things that you’ve wanted so long and you didn’t wanna spend the money on it because you had debt and all those types of things.
Does that mean that you should go out on a spending free because even though you have debt, because Ashley said you need to still enjoy your life. No, you need to have it planned and it needs to be a realistic amount for your situation.
And if you don’t have enough income or there’s not enough wiggle room in there, then if it’s that important to you and you know you’re gonna spend the money anyway, then you need to think of some ideas to make some extra money and some podcast episodes on that. It’s going to be coming up soon and I’m gonna do a whole series on paying off debt.
You Have to Create a Plan You Can Stick To
If you make a plan and it’s the beautiful plan, it’s a perfect plan on paper, but it’s not realistic for you and you know you’re not gonna stick with it. What, what’s the point?
What are you doing? Like that’s not real life, you’re not perfect and why make a plan that you know you’re gonna fail at?
You’re just setting yourself self up for failure and then guess what? You feel defeated, you feel stupid, you feel like why can’t I do this? It’s because you’re not making a realistic plan for you. Like it’s not cookie cutter, okay?
Now some people can follow cookie cutter advice, that’s fine, but there’s 7 billion people. Shoot, we might even be at 8 billion now. I don’t even know more than 7 billion people on the planet.
Guess what? One thing’s not gonna work for everybody.
You have to figure out what’s going to work for you and your life in the season that you’re in. Because if you have older kids, that’s different than having little kids. If your kids in travel ball of any sort, you know that’s a whole lifestyle all year long, right?
Your life is very different than my life where I have kids playing optimist ball and it’s a couple nights a week and we are not traveling, like not doing that. That is not for me.
Do What is Right for Your Family
But you know, your situation is different if your kids are out of the house. That’s a whole other situation too, right? Your kids are in college or maybe they’re grown and out on their own.
That’s different than having teenagers, that’s different than having little kids. So you need to do what is right for you and your family in this season. And that could be not paying off any debt at all, but just maintaining, not adding to the debt.
So I want you to think about that. I want you to think about what is really important to you. And if debt is more important to you than getting your hair nails done, that’s fine. Like that’s perfectly fine. And for a lot of you that will be the case. And then you know, there’s still gonna be people that that’s not the case.
So you need to look at you, your situation, your family, and what your priorities are right now, but know that it’s okay to put those things in the budget that way when you are debt free or you six months from now, like after keeping all the joy out of your life for six months cuz you have debt and then you just wanna give up.
Slow and Steady Wins the Race
You’re not gonna have those highs and lows like that because you’re just gonna be able to maintain. And you know what, if something extra comes up from every now and then you’re like, I really wanna spend money on this and it’s like a couple times a year thing, but it’s gonna take away from the debt, that’s okay too.
It doesn’t matter how fast you get there and how you did it and all the things that you didn’t do just to pay off your debt. Once your debt is paid off, it’s paid off. And that’s a great feeling, right? The details really don’t matter as long as you just keep going and don’t stop.
Because if you are sacrificing, sacrificing, depriving yourself for six months and you just can’t take it anymore, then you binge spend and then you just quit altogether cuz you had a bad month and this just doesn’t work for you and you’re always gonna be in debt. Well yeah, you’re always gonna be in debt because you gave up. You have to keep going.
So even if you have those moments, know that whatever you are doing is not going to work for you. You’ve got to figure out what will work for you and do small things at a time, okay? You don’t need to cut everything out at once. You can make gradual changes over time and that’s what you’re gonna be able to stick to.
Do One Thing at a Time
You don’t need to try and do all the tips and all the strategies at once. Implement one at a time until you feel comfortable with it. You think it’s working for you, then add in another thing.
Leave a Reply