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Gwen’s July Challenge: Save 50% of What I Earn (And Attack Debt with It)

What an epic month!

This past July has been one of the best months of my life. Here are a few reasons why:

  • I’ve officially been living on a plant-based diet for 60 days. I feel more healthy and vibrant than ever.
  • I said ‘I love you’ for the first time.
  • I lived within a budget I created for the first time in my life.
  • Overall, I’m appreciative of where I’m at and excited for my upcoming goals.

In July, I also discovered my new money ‘guru.’ I discovered Dave Ramsey’s teachings. Dave is a financial expert who went bankrupt in his 20s, which prompted him to dedicate the next 25 years of his life learning finances and teaching others to thrive by living within their means and paying off debt. To quote Gabrielle (the youngest Sisterpack member), “He is a (financial) savage!” Essentially his teachings make you want to eliminate your debt with ‘gazelle-like intensity’ and he’s absolutely no-nonsense when it comes to making your budget.

This leads me to my July challenge: spend 50% of my income on my debt. I’m happy to say I achieved my challenge and spent 57% of my income on debt (this even includes interest on debt as well).

So how did I do this? Here is my six step plan:

1) Face my financial reality head on.

I put all of the money I owed as well as my monthly expenses and income on an Excel doc to see where I was really at. Let’s be real: it can be scary af to be honest with yourself, realizing how much you owe and how long it will realistically take to pay off. It was definitely a wake-up call to see, though it was also inspiring to finally have concrete numbers.

2) Create a goal.

Since my goal was to spend 50% of my income on debt, it was a very black and white goal. I knew what I wanted. Surprisingly, I hadn’t done something like this in the past, which is probably why I haven’t felt like I’ve made much progress lately.

3) Do the math.

After facing my financial reality and setting the goal, my next step was to do some simple addition to figure out if I could consciously pay 50% with the lifestyle I was living. After doing the math, it turned out that 68% of my income was spoken for if I lived the same way that I did in June. So I decided to hack away at expenses. I lowered my grocery budget, restaurant and ‘miscellaneous’ budget and that got me into the right range.

4) Create a budget and use a system to track your spending.

I started the month using Mint.com to track all of my spending and make a budget. Though after discovering Dave Ramsey, I decided to start using his free EveryDollar.com site and app to track spending. I absolutely love it and am obsessed right now. I checked in almost daily to try to live within my means.

5) Tell those you trust.

It’s challenging to scale back your life and live on a budget. So I’m at a place right now that I am very open that I am attacking debt and will not be going out and spending a lot. Luckily, I have created a group of friends and my family get it and have been supportive of my goals.

6) Watch motivational and educational content whenever possible.

I mainlined Dave Ramsey’s YouTube videos. I watched examples of the joy that people felt when they paid off their loans. I learned from people’s mistakes and remembered to have compassion for myself for where I’m at. This all helped me achieve my goal.

I am SUPER proud to say that I accomplished my July challenge and am more committed than ever to pay off all debt.

My August challenge will be interesting. I’ve decided to use the ‘envelope method’ and actually carry cash and pay in cash. I will put my budgeted money in specific envelopes and only use that to pay! I haven’t used cash in a very long time, so I’m very interested to see how this will go!

Thank you so much for reading!

-Gwen

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