Kristin and her husband paid of $54,500 of debt in under 20 months. Through her own personal experiences with debt, Kristin has learned a multitude of practical tips regarding budgeting (and more!). We spoke with Kristin to understand her journey with budgeting.
Q: What is your current position/role and when did you first develop an interest in finance?
A: I am the Owner/Founder of Cents and Purpose. I developed a real interest in personal finance towards the end of 2016 when my husband and I realized that we needed to do some major improvements regarding our finances.
We didn’t feel as though we were living beyond our means, but the numbers told us a different story. We knew that to get out of debt we needed to change our entire lifestyle.
Q: What challenges have you faced with personal finance?
A: My husband and I found ourselves with a lot of debt, we ended up paying about $55,000 in total. About $30,000 of that was personal debt and the rest was related to a small business. We eventually closed the business, paid off our debt, and began to live below our means.
Our biggest wasn’t large purchases, it was small purchases that added up.
Both of us are spenders at heart, so we lived with the need for instant gratification. We had to learn to live with patience to save our money and live below our means.
To learn more about living below your means, check out the rest of our blog posts!
Q: If you could give advice to your 18 year old self about managing your money, what would you tell yourself and why?
A: The first thing I would teach myself is how to live on a budget because I had no clue where my money was going. I had a great job, but I wasn’t managing my personal finances. If I knew how to live on a budget when I was young, then I would have had a great tool to be able to enjoy my life.
Also, I would have loved to start thinking about investing and saving when I was younger.
If young people can get in the habit of paying themselves first, they can develop the habits of patience and consistency regarding their finances, which will pay off huge for them.
While doing that they should be setting financial goals because when you’re able to sit down and look into the future towards tangible goals or dreams, then you can work backwards and create a roadmap to achieve those dreams. A roadmap helps you to take action with your personal finances.
Q: What is your top tip for budgeting?
A: My top tip is to be patient and give yourself grace when you’re learning how to budget. I believe it takes at minimum 3 months, and usually 6 months, before you really work out the kinks and get familiar with your numbers to be able to maintain a consistent budget. I think that so many of us tend to give up when we make mistakes at the beginning of a process.
But if you give yourself grace and realize that everybody messes up on their budget, getting frustrated with yourself isn’t going to serve you. I recommend taking a different perspective and looking at your first budget as a rough draft and using each additional month to revise that draft until you’re in a place where you truly know your finances and can sit down and write a budget like it is a final draft.
By maintaining consistency you will be able to tweak your budget until you discover what works best for you.
Q: What do you think is the most critical step to ensuring financial independence?
A: First, learn how to pay attention to where your money is going and manage a budget. Most people who are financially free know where their money is going and are constantly paying attention to it.
Second, start wherever you’re at by saving and investing. When you begin, make sure that you are doing it consistently and being patient. The journey to financial independence is a very big picture, it is a marathon not a sprint, so you have to be in it for the long haul while you’re growing your wealth and experiencing changes.
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