Ralphie Rough Road

If you missed the previous post in this series click here.

It was obvious, I needed to leave my lab job behind. However, with little experience in the photography/business field, debt to pay off and little to no savings, a plan was needed.
The first things to tackle, my debt. This step would take the longest. While that plan was being implemented I could work on gaining experience and saving some money.
The biggest expense I had, at the time, was my car. My beloved orange blur. I’ll give you one guess why it was called the orange blur. Yes I admit, I have a lead foot.

My commute to work was only 12 miles round trip. After doing the math, I realized my car payment, insurance and gas were costing me almost $2 per mile. It was time to get rid of the big car payment.

Problem #1: I had another 2 years to pay on my car! Ugh! Could I cut expenses in other areas of my life, allowing me to pay it off sooner?

After analyzing my expenses, the answer was a resounding yes! Outside of our rent and my car payment, our next biggest expense was going out. Going out for dinner (and lunches) and meeting our friends at our favorite local pub for drinks.

When I sat down and calculated how much we were spending monthly, I could not believe it. Don’t get me wrong, we were having a blast going out all the time, but our wallets were screaming at us to take it easy.

Problem #1 solution: Decrease the amount we spend going out, have dinner at home and pack a lunch whenever possible.

When you have a goal in mind, it is not as hard as you might think to cut back on unnecessary expenses. In my case, I had a big motivator. I was ready to move on to something new.

With the extra money saved from going out, I had a plan to pay off my car sooner than originally expected. With my car paid off, I would effectively give myself a 10% raise, more than I had ever received from my employer.  This extra income could be added to my savings.

As I started to dive into other ways to cut expenses, I realized I had things wrong all along.  All this time I thought I needed to make more money to afford my expenses. However, the more I reduced my expenses the more money back in my pocket. A pay raise if you will!

I realize this is not a new concept, however, most people are always looking for ways to make MORE money. In turn allowing them to buy more things, thus looking to make even more money to buy more things, thus, the cycle continues.

A simple reversal of the thought process reveals a better way. Decrease your expenses to give yourself the extra boost of income. We live in a world of finance this, mortgage this, credit card this, next thing you know the average person is up to their eyeballs in debt. They bring home $50,000 (an example) and they have $49,999 going out. It’s a depressing cycle when you think about it. Couple this with working 40 + hours a week (at a job you may not love) just to pay for things. Blah! I call this the rat race of life and I was ready to exit the race.  With step one implemented and going smoothly, I was on my way.

We were going out less, eating at home more and I was paying extra on my car payment. The goal line was closer each month.

Of course, there were slip-ups. I would be lying if I said we stuck to the plan perfectly. Some weeks would be more stressful at work, so we would go out for dinner and drinks more. Some months I would spend a little more than I had intended, leaving less to pay extra on my car payment.

Overall, we stayed on target. Taking each day at a time. The light at the end of the tunnel was getting closer, slowly.

Challenge #2: Staying patient and motivated while paying off debt and saving money.

Join me next month as I tackle challenge #2.

Do you have tips for paying off debt and saving money?  Please share your ideas in the comments below.