How often do you say “wow, what a difference a year makes?” I know I say it all the time, especially when looking back on vacations or just looking at pictures of my girls as they grow. But how often do you utter that phrase when looking at your finances?
For a REALLY long time, year after year, our finances stayed the same. We struggled to live the life we wanted to live while still surviving our day-to-day routine. Did we make some BIG financial mistakes over and over again? Oh yeah, you bet we did! But there came a day when we just realized we couldn’t keep doing what we were doing. We were exhausted, burnt out, and failing. Failing miserably!
So how did we change it? How did we go from financial disaster to homeowners in just one year?
We changed our mindset and worked really, really hard! The first thing we did was cut everything that wasn’t absolutely necessary. This meant limited eating out, cheap dinners, and food that we could stretch over multiple meals. We also cut cable completely because we basically just couldn’t afford it.
In fact, in that time we refer to as the “dark days,” we literally couldn’t afford anything. We were living in a really nice, but way overpriced townhouse, and we were making decisions over what bills not to pay this month so we could eat. There were some personal dynamics that went along with our living situation, but one night, we just sat on the couch and said the words we had been trying so hard to avoid – we can’t do it anymore. We simply could not afford it. End of story.
So we moved back into a tiny two-bedroom townhouse that was half the rent and made do the best we could. We set our goal to be there one year and absolutely no longer. This was something we had to remind ourselves every single day. One year.
In the meantime, our credit was crap. Seriously, crap. But I am the master budgeter, so I knew I could fix that. I took a job that barely paid more than what we paid for daycare and kept my freelancing job, even though I was exhausted and so tired of working. I also had the biggest year of my Disney planning career. Every minute at home was spent working or looking at our finances. We stopped shopping and the girls only got new clothes when they needed them and toys when we went to garage sales (minus holidays of course!) We even had really small birthday parties for them that year and used things like gift cards to buy diapers and other staple items that were more important than toys!
We used every extra cent to pay down our debt and slowly watched our credit score rise. We set aside our tax refund to put toward our down payment and started growing our savings.
In the summer, I was blessed enough to take on a new job that paid far above what daycare costs and we were really able to pay down debt and set money aside. We used my travel agent discount to take a REALLY cheap vacation to Disney World because we just needed to get away! In the meantime, we started to look at mortgages and plan what we thought we could afford – we knew the down payment would still be our biggest struggle!
We were so blessed to be the first people to look at our dream home on the day it went on the market. Before we knew it, we were in escrow and nervously awaited closing. Every day we worried that something wouldn’t work out and we would be homeless. We made the down payment literally by the skin of our teeth. We got everything we wanted and more with our house, and I think the best feeling is we did it 100% by ourselves. I feel that everyone should struggle with money at least once in their lives to really understand how hard work pays off and what a relief it can be to come through on the other side.
So, if you are out there struggling with money or trying to make your situation better, remember that it can be done – it’s not easy and it’s going to take every ounce of determination you have, but when you come out on the other side you will realize how it was all worth it.
Some things we did to keep our heads in the game:
*Monthly budget where everything is outlined down to the penny
*Weekly discussions on where we were at when it came to paying down debt
*Open and honest conversations about our fears and struggles – I think the number one reason we were SO successful at pulling this off in a year is that we didn’t fight about it, we worked through it together. That was clutch for so many reasons! Fighting is just going to derail your progress and momentum.
*We were willing to work around-the-clock to make this a reality. We looked at it as it’s only a year, put your head down and do it.
*Our kids never suffered because of it. Lily still took dance class (it was in the budget!) and we found fun, free things to do as a family on the weekends. They never saw this time as a negative because we didn’t make it a negative.
*Stop comparing your situation to others. Chances are there are so many factors you don’t know about or aren’t considering when you are comparing how much better they have it. This is a hard one to overcome – something I think everyone struggles with on some level. But don’t let it stop your momentum.
*Set a REALISTIC goal. I knew going into this year that we could pull this off. Don’t set yourself up for failure. If it’s going to take two years, make your goal two years.
Believe me, it wasn’t easy. It was really, really hard. But it was totally worth it. There were tough choices, a lot of awkward conversations on why we can never do anything, maybe some pouting from me that I had to stay out of Target, and a less-than-ideal year-long living situation.
How have you changed your “hopeless” financial situation? What were your go-to