OMG! $20,000 in Debt Down to $770

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I stated earlier that paying down $15,000 in debt has been one of my biggest accomplishments since choosing a minimalist lifestyle.  Before writing this article I went back to my credit card and bank statements for accurate details to share with you on how I did it and what I did.  To my surprise I discovered that I had much more than $15,000 in debt.  I had $12,929.63 with Visa, $4,227.08 with Carmax (my car note), and $1,946.71 with American Express, a total of $19,103.42 of money owed at the end of December 2009.  I'm still completely shocked.  So what did I do differently?  And how in the world did I do it?

My husband reminded me that in December 2009 I was completely freaked out about how much I owed and my stress levels were on their maximum high.  Forgiving myself for having created these circumstances as well as thinking about how wonderful it would feel to be financially independent was the beginning of my emotional journey.  It was my debt that turned me to minimalism.  It was actually a blessing in disguise.

The first minimalist blog that I read was Man Vs. Debt.  It was the first insight that I received that freeing myself of debt was actually a possibility.  I didn't want the weight of owing money to rule my life and I knew that I needed to make some serious lifestyle changes as soon as possible.

1. Make Financial Observations

I looked to see where I spent most of my money annually.  I was sad to see that most of my money went towards beauty products, clothing, and eating out.  I wished more of that money had been spent on my dance training and massages.  That was a very tough thing to acknowledge, but it was the truth.  After looking at how I was spending my money, I decided to make some immediate changes.  I was going to have to stop shopping excessively and also create a new form of beauty which is how Minimalist Beauty was born.

I was now letting go of favorite cosmetic brands to begin my DIY beauty methods.  I also stopped shopping at my favorite stores and revisited thrifting at Crossroads and Goodwill if I needed something.  In general I stopped constantly shopping all together.  Did I want to continue paying the minimum on my credit cards and keep the balance at a stand still, or was I really ready to take some action?  Paying the debt down became my top priority!

2. Stop Eating Out!

It's so true that most of our income goes towards food.  Even more of that income often goes towards restaurants than groceries though.  I love eating out!  There is nothing more exciting that going to my favorite vegetarian restaurants like Real Food Daily, Vegan Express, Seed, Flore Vegan, M Cafe and so many others in Los Angeles. 

Always being on the go, I still haven't been able to prepare all of my food ahead of time.  My change here was that I'd pick up a lentil or hummus wrap with plantain chips from Trader Joe's for around $5 versus my usual $15-$20 meals.  I'd keep my water bottle full and skip the drink option all together.

3. Cut Back Miscellaneous Spending

Because I kept records of all my spending with receipts, I was aware of all purchases that were not tax deductible or food related.  Miscellaneous purchases were no longer an option.  If someones birthday came around, and I opted for beautiful cards from the dollar store or special written notes on lovely stationary that I already owned.  I also either brought flowers or a handmade gift.  Other random items that I may have usually picked up for myself in stores like Target or CVS was no longer appealing because I was in the process of major decluttering.

4. Declutter, Declutter, Declutter

There’s something so intense about the process of decluttering that the idea of buying more stuff is almost repulsive.  Once you begin to really see how much stuff that you have and are trying to get rid of most of it, you’ll no longer be interested in buying for buying sake.  You’ll notice that your priorities with money and things begin to shift, and more time will soon be focused on what brings true fulfillment. 

I feel TV and shopping are like numbing drugs that most of society partakes in much of the time.  When you are numbing your stresses and hard days of work, you aren't seeing the beauty in everyday life. Counting your blessings, and put time and energy towards the simple joys of life.

5. Income, Debt, and Bills

So finally the money part.  One of the greatest ways to pay down your credit after you've made some serious spending changes is to pay your card with the highest balance multiple times during the month.  Pay the minimum first then in a day or two put an extra $100 or more it you can.  Once you stop eating out and shopping that extra $100 or more will be there. 

Being in a dual income relationship took away much of the financial stress.  My husband and I agreed that since the debt was mine before we were married, I’d take complete responsibility to pay it off.  Financially I paid for food, my car note (which is no longer), my debt which will be completely paid off in less than two months, my dance classes, and other odds and ends that I may need during the week.  Any extra money that I earned from dance or commercial gigs, Etsy sales, etc. always went towards my debt.  Whenever I taught extra dance classes, more than my usual schedule, that also went towards my debt.

I've also had three major windfalls of money that came to me from two different circumstances which went completely towards my debt.  One was a Super Bowl commercial that I was in brought back from a previous year the beginning of 2010.  That residual income of around $6000 all went to paying off my American Express and knocking off a chunk of my Visa balance in March 2010. 

My grandfather passed away last spring after a long battle with Alzheimer and other infections along the way.  (My eyes are welling up again.)  My mother graciously shared some of his insurance money with me last spring, and also a portion of selling his house this spring will me, another total of $6000.

With almost $20,000 in debt in December 2009, I paid $8,000 of it will my current income. Yet $12,000 of the money came from unexpected sources from both joyful and sad occasions. Where there’s a will, there really is a way.

6. Affirmations

An affirmation card that I kept in my wallet read "I am open and receptive to new avenues of income.  I now receive my good from expected and unexpected sources.  I am an unlimited being, accepting from an unlimited source, in an unlimited way.  I am blessed beyond my fondest dreams."  Every time I was at a cash register to pay for anything I would give the cashier my money and read this affirmation while the transaction was being completed.  Feeling blessed and paying with confidence and peace no matter what I was purchasing helped me create a positive relationship with money.

Knowing that I deserve to be at peace was a huge part of my journey.  I’m sure that this is only the beginning of it all as I still have so much to learn in life.  I’m very pleased with this new perspective.  Becoming more minimalist has given me a freedom that I didn’t have before. 

I thought that after I paid off my debt I would treat myself to a Betsy Johnson dress.  I'd been loving her designs always desiring one.  Now with my new perspective, I don't think that would really be the best treat after all.  Boy have I come a LONG way!

Much love!

Image by Dawn Michelle

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