Stop budgeting for debt!

After Monday’s post, I was feeling a little Debbie-downer. I’m only 2 months into this journey, so it was pretty disheartening to feel that way so soon.

So, just like I do when I’m on a long run and struggling, I went back to analyse my progress so far and what I need to do to make my goals happen. Detail, detail, detail.

Turns out, my consumer debt (minus the car) will be paid off by September 23rd. Of this year! That’s only 6 months away! All sorts of (educated) assumptions are made, obviously. But 6 months is visible, and if it took a month or two longer because life happens along the way, I can live with that.

I can play around with the future picture thanks to a budget spread sheet I’ve been working with for years. It’s not pretty, a true financial mind might call it simple, but it works for me. It allows me to adjust my income, my expenses and – most importantly – the rate in which I pay back debt.

I also use  Mint to watch for any unscheduled expenses (hello bank fees!) and generally keep tabs on where I’m spending my money and if it matches the budget in the spread sheet.  The spread sheet has evolved over the last 3 years – yep, 3 years of budgeting with a spread sheet and I still managed debt. How, you ask?

Because I actually budgeted for debt.

Can I tell you how absurd it is to write that sentence? That sentence is exactly what is wrong with how we educate (or don’t, in my opinion) on personal finance.

And we might feel ok if we don’t have credit card debt, or a line of credit, or a store credit card.

But if you bought a car on finance, you budgeted for debt.

If you bought a mattress on ‘buy now pay later”, you budgeted for debt.

If you planned ahead to pay for your education with student loans, you budgeted for debt.

Who wants to spend their adult life paying for a lifestyle they once wanted? I don’t, but I AM.

2016 = the year I start buying the life I want.

And it starts with wiping the slate clean of debt to buy me more options.

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