Show notes
How Kelly paid off $30,000 in student loans in less than two years and then paid for a wedding in cash! Hear how she went from the spender to the saver in her family and plans to pay off her house 18 years early!
Plus her number one tip for managing your money better so you can pay off your debt!
Resources mentinoned:
7 Day Pay What You Want Budget Challenge (www.budgetsmadeeasy.com/budget-challenge)
The Slight Edge by Jeff Olson (https://amzn.to/2ISvNQz) (affilaite link)
Kelly McColgan runs the YouTube channel and blog Freedom In A Budget where she helps change the stigma that budgets are constricting and controlling but rather give you freedom! Kelly shares her journey and tips on how you can live a great full life once you become in charge of your money through the aid of a budget.
Website: https://freedominabudget.com
YouTube: Freedom in a Budget
Social media @freedominabudget
Full Trascript:
Today we have a special guest, Kelly who runs the YouTube channel and blog, a freedom and a budget where she helps change the stigma that budgets are constricting and controlling, but rather give you freedom. Kelly shares her journey and tips on how you can live a grateful life once you become in charge of your money. It's through the aid of a budget. So welcome Kelly. Thanks for coming. Thank you for having me. This is awesome. Thanks. I'm so excited to talk to you today. Um, and you know, just getting to know you and talking with you, uh, you know, you're debt free and that's awesome. And I really love talking to people that are debt free and figuring out, you know, how you got there, how you started and things like that. So, um, can you just take a couple of minutes and tell us about yourself and how you started on this journey?
Absolutely. I was living paycheck to paycheck, wasn't making my bills, I was making somewhat decent money. Um, but you know, just not making ends meet. And my now husband and I were dating and we wanted to get married and my inlaws said that they didn't want us to get married and so we got our finances in order and it was a hard blow. It was, it was a lot to take in. But through that we ended up finding Dave EMC and finding this community and got really hugged in. And from there I started by youtube channel for accountability and it just kind of snowballs, you know, with the dead snow. But also with just my like financial literacy and just learning so much about personal finance and I became obsessed with it and that's why I started the channel was because for the community but also I needed to talk about it because my husband was just getting sick of all the time and two and a half years later, here we are, you know, we paid off all my loans, we cashflow to wedding, we just bought my dream car, a Jeep Cherokee in cash and we just stay for down payment and bought a house a couple of weeks ago.
Just went on an Alaskan cruise a week ago. And so it's been, it's been so fun.
That is awesome. So can you tell us how much you paid off and how quickly you did it?
The paid off. It was just my student loans. My husband didn't have any debt and it was $33,000. And that was over the course of about a year and a half. Wow, that's awesome. Yeah, we did receive, uh, a little bit of an inheritance that helped finish it off. And then the rest of it we just put into investments in this charter to saving for the wedding.
Oh, that's awesome. Yeah. Do you use your degree? No, I know me either. I talk to so many people that have so much student loan debt and then they don't even use their degree. So that's, that's funny. Um, so it took about a year and a half and you said you found Dave Ramsey, so can you kinda tell us kind of how that journey progressed for you? Like, was it really hard to start or did you, are you like me and you just jump all into things?
He actually had a bad stigma and like my group of friends, um, that I would hang out with just because he was very intake credit cards and they, you know, didn't really understand like, okay, you don't agree with this one part of him, but the rest of his principles are amazing and you know, they really help people get out of debt and they, you know, really are great for those people that need that starting point and being like, I need to learn how to deal with my money and manage it. And so, um, a lady in our church was moving away and they were actually millionaires and they had taken financial peace university years and years prior, probably 15 years prior. And she gave us a workbook and the DVD. So I just did it myself and that's when I started watching youtube videos and I became obsessed with youtube videos, um, cancelled my cable and just watched youtube videos.
Hey, that's awesome. So did you get any negative comments or moments when you wanted to give up negative comments in the community or, yeah, like usually people, like, like you said, it's your friends that didn't want to give up credit cards. You know, sometimes we have friends or family members that don't fully understand what we're doing and so they will make negative comments about trying to pay off debt or not using credit cards. And um, you know, I had somebody tell me, uh, stop acting like you're broke and things like that. It's like, well, I'm trying to act like I'm broke so I can build real well later. You know, it's just a matter of priorities and, uh, deciding where your money is going to go each month. And that's really all it is. It's not a matter of, you know, necessarily acting like you're broke. I'm living within my means and working toward my goals. So, you know, sometimes people just have negative comments about this journey. We have more of it in the budget, no
tins. And you know, like, especially I think my husband got it harder than I did just because it was very clear that I was not budging on, you know, my budgeting and you know, from the living. Um, but for him, eating out was really hard and he used to eat out every single meal, like do not cook at home at all. So it was a really big adjustment when we got married and he had to start eating my lunches that I would, he was like, yeah, they're good. But I like going out. I like having the variety of being able to look at a menu and pick anything I want. So that was a, that was a struggle for him a lot. And he's getting better.
But yeah, it's a work in progress for sure. My husband is the same way and uh, that was like his time to get out the shop and relax. You know, he stands on his feet all day and he works in a building with no windows and like, he still is still a struggle. Um, but we've definitely cut it down. But you know, I still have to budget and for eating out and you know, it's just kinda like his entertainment I guess. We don't really budget a whole lot for entertainment. Like we plan date nights every now and then, but it's not like a regular budget item. So where that is. So that's kind of his entertainment I guess. So to speak of his, of his, but um, so if you could go back in time, what would you tell yourself about money?
Oh goodness. Only spend what you need and don't, I had this thought process and especially in college and you know, when I first started getting more of a real grown up paycheck of if I had $20 in my bank account, that's $23 to spend. And like when I think back, I'm like, Kelly, what were you thinking? Like, no, you need to be saving that. You need to be putting it towards, you know, extra payments on this or whatever. Like not let's go to Marshall's, let's go to target. I have $20 to spend. Okay. Kind of like, I don't know, I was so dumb with money. Like so
yeah. So would you consider yourself the spender or the saver? Cause usually in relationships there's one or the other. I used to be
vendor and now I am 100% saver. 100% like it drives my husband crazy of how much we have to like he has to reel me in of like spend a little money like we were in Alaska and I was like, I had to do all these Uber's and everything and I was like $50 for new Uber. And he's like, yeah, that's normal. I'm like, are you crazy?
I know that. Yeah. But I guess you don't have much of a choice. I mean, so what is your number one tip or piece of advice that you would give somebody that wants to be debt free? Also
track your spending a hundred percent track everything in a budget and so many people got just so overwhelming to them. But if you spend 10 minutes every other day tracking your spending, it really doesn't take long. Now if you wait until the end of the month, it may take you an hour to go through all your bank accounts or receipts or everything like that. But if you're in it every couple of days, that's really going to be a big game changer. And also you can see where you're at half weeks a month, like are you overspending in a category and then you can kind of reign it in. Whereas if you wait till the end of the month and it's like, oh well I overspending groceries, $400 I guess. Oh, well, okay.
Yeah, absolutely. So definitely tracking that was the big thing for us. Like whenever I started this journey as well, we were spending so much money on food and eating it. Um, was there any categories that surprised you whenever you started tracking your expenses? Eating out? Yeah, it seems to me like for most people, every now and then I'll get an email where it's something different. But I'd say like 95% of the time it's food between eating out and groceries and restaurants and all that kind of thing. Um, so you said you just bought a house and paid for a jeep in cab. So tell us about that. Like how long did that take you to save up that much money?
Um, it took us maybe a year. Yeah, just about a year cause we started saving right after the wedding,
um,
to buy the jeep and then after the jeep, then we started saving for the down payment. And that took maybe, um, eight months probably around there. Did you do like what Dave recommends at 20%? We did it just because we live in south Florida and for us to do 20% down and closing costs and then have a few thousand dollars for like repairs and stuff, we would've needed a a hundred thousand dollars.
Yeah, that's a lot. Hey, some is better than none. I mean really like it doesn't, you know, even if he can't, like I'm sure people in California that would be insane to try and save up 20%. But you know. So what are your current financial goals? We are trying
to put, um, a thousand extra dollars a month towards the principal of the house. And I did the calculations for that. If we do that, we're able to pay off the house 18 years early, $130,000 worth of interest. Wow. Blows my mind. I wonder, you don't want to pay for Uber. So we're doing that and then beefing up our investments, which is really fun too. And I'm learning a lot about stocks and dividends and everything. It's a whole new world for me and a little overwhelming at times, but it's really, it's really fun and exciting.
Yeah, that can be confusing for people. So what would be like if somebody came to you and they really need help, um, you know, with their budget or reigning in their spending, is there anything that you would recommend them doing? Like writing it down or using an app? Like what do you like to use for tracking your expenses in your budget and things like that?
I use excel. I'm an excel nerd. I've used all the different apps and try them out and everything and they just, they were okay. But I just, I dunno, I love excel. I use them all for my work and everyone makes fun of me for how much I use spreadsheets. Um, so I think that's the best way. I, I love how it's customizable. You can transfer, promotes the other. It's very easy. Um, and I do have templates on my Etsy shop as well as my budget templates.
Oh, awesome. Yeah. I love using spreadsheets cause you can play around with the numbers. So I like, especially when I was paying off debt, it was like, okay, well if I can find an extra $200, how will it change everything that I love about, cause it's easy to play with the numbers. Um, so what do you, do you have any tips for somebody that is just starting to try and cut back expenses and live frugally? Um, what are some of the things that you do to kind of cut back expenses and save money?
Just doing a little out of time. So many people like when they, you know, want to cut back their grocery budget, they try and go so drastic and they try to cut hundreds of dollars a month. Like that's not realistic. You know, especially if you have a big family and everything, it's, it's going to take time. So cut $25 a week. Once you get used to that, did that for a couple weeks, then cut no $25 to now your $50 from where you originally were. They cut a little bit more and get used to it and then you can slowly over time get to where you want to be. Um, same with eating out or pocket money or whatever it may be. Just make those small changes. And then also for ward yourself, if you're making a, you know, if you're hitting a milestone or you know, every $5,000 worth of debt that you pay off, um, go and do something or have a, something to look forward to. It doesn't have to be a lot, but just those little rewards along the way, they're really going to keep you motivated.
Yeah. That's awesome. So did you use the debt snowball then? Can you kind of tell us about that and explain kind of how you did it?
I didn't have too many debts, just a, just a couple of student loans. Um, but just, you know, putting them in order of smallest arches, regardless of interest rate, and then paying the minimums of one and then once that one is paid off, then go onto the next one. Um, and honestly, I, I'm not 100% on the snowball. If people want to use the debt avalanche, I think that the a hundred percent. Okay. As long as you're just sticking to one. I see so many people that jump around from one to the other. It's not working, not motivated. Find one that works for you and stick to it and just, you know, when you're not motivated, just keep on plugging along and it'll pass. We'll get motivated again. It just, just keep on going.
Yes, exactly. That's what I try and tell people too, is like, just make progress. As long as you're heading in the right direction, you'll get there. Just something heading to where you want to be. Um, and I always like to ask people what their favorite nonfiction book is. Do you have anything that you're reading currently?
Um, oh gosh, I'm reading a lot. I just moved to, my commute is two hours a day now for work, so I'm doing a lot of audio books. Um, but I think my all time favorite is the slight edge by Jeff Olson. And it just talks about those little changes that you make every day or every month or whatever they may be when you make it one time, it just make a difference. But over the course of a month, a year, whatever it may be, it's a huge impact. And those changes can be positive or negative, but they really add up over time. Oh, that's a great, I haven't heard of that one. I'll have to look for it added to my list. And where can people find you? Oh goodness. I am all over the place. I mainly on a youtube freedom minute budget. I just started a blog about a year ago, reading minute budget.com on Instagram, Facebook, Twitter.
All of the above. Oh, that's great. And do you have any last pieces of wisdom, words of advice? Just get plugged in. Find people that are doing the same thing that you're doing, whether it's, you know, in your real life, and if not, then find community on mine. There's so many Facebook groups. There's, you know, Youtube. Um, there's so many different ways that you can get plugged in and encouraged, especially when you're feeling down. Absolutely. Well, thanks for coming on and talking with us today. I appreciate it. Thank you so much for having me. This was a blast. Thanks.
Special Guest: Kelly McColgan.