Here is a list of 7 steps my husband and I took to help us on our journey of becoming debt-free when I was 25:
1) We learned how differently we felt about money. Turns out, my husband is a natural spender and I’m a natural saver. Before, he just seemed like an out of control bachelor spending his entire tax return check on a new guitar or amplifier. That’s partly because I associate money with security. Did either of us know any of that about ourselves or each other before the class? Nope. Did finding that out make a difference? Yep. A huge one.
2) We established an open line of communication. Once my husband and I realized some of our strengths and weaknesses regarding money, we created an open line of communication, talking regularly about what was working and what needed to change.
3) We set two big goals: When I was younger, goals weren’t so much my thing. Our first two big goals helped me realize how life-changing they could be: 1. Save $1,000 in an emergency fund ASAP. 2. Pay off all debt in just two years.
4) We learned to live within our means. Overnight? No. The most powerful thing we did was pay attention. We kept our receipts. We scanned our checking account activity. My husband started using Mint.com to track our spending. I started learning price points at the grocery store so that we’d spend less. We learned to say “No.” I wasn’t a very big fan of that word in my early twenties. What a difference it made on becoming debt-free, though.
5) We created AND lived on a monthly budget. Gag, right? Hear me out…I tried budgets in the past, but my debit card was like a forget-me-stick, always causing me to forget every written plan as I’d swipe for the next thing and the thing after that. Aaand the thing after that. Be honest…does any of that sound familiar? Instead, my husband and I wrote out a cash flow plan and looked it over together. Then we did it again. And again. Taking that step and keeping each other accountable throughout the month made a big shift in our progress.
6) We made becoming debt-free the top priority. Instead of focusing intently on using a bunch of debt to build our credit score, we spent as little as we could, lived on my husband’s income, used my paycheck to chop away at debt, and kept our eye on the prize of no payments. I mean, could you imagine what it would be like to have NO payments? That’s what we kept telling ourselves. When it finally did happen, it was an incredible feeling.
7) We celebrated our victories. A common misconception about becoming debt-free is that you’ll never have fun again. There are lots of ways to have frugal fun and enjoy life together while you tackle debt. One of the most powerful incentives was our gift to ourselves after we paid off our last debt. While we were paying off the debts, we both did without smart phones. Once we got out of debt, we upgraded our “dumb phones” and purchased a Nintendo Wii. Then we played Mario Kart to our hearts’ content because we were raised in the 80’s and 90’s and that’s just what you do.
If my younger self could have realized how great it would feel to work hard toward a goal, achieve it, and celebrate, then I could have saved a lot more money in those early years.
No regrets, though. Life is full of teachable moments. My twenties are a direct reflection of that.
Today, as I approach my 30th birthday, my husband and I live within our means, recently purchased a house (yes, that is debt, but we hope to rent it out in three years to re-coop some of our investment), regularly budget, invest every month, tithe at our church, and live on his income while I take care of the two children and work from home as a freelance writer.
We experience a lot less stress and a great deal more empowerment than either of us did in our early twenties. It’s not perfect, but I absolutely could not have gone through this change without my husband’s willingness and hard work.
What’s one powerful lesson you learned about money in your twenties? (The easy way or the hard way.) Share in the comments below.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.