How They Did it: Grace from The CFO Mom
Recently, I had the pleasure of meeting Grace, a wife and mother or as she likes to put it "the designated chief financial officer of [her] family". Grace is consumer debt free meaning she has no credit card payments, student loans, home equity loans, or car notes! Today she shares more about her journey toward financial freedom, staying motivated and setting goals.
How did you start your journey toward financial freedom?
The ground work for my journey probably started when I was a teenager. I was surrounded by parents and grandparents who were making bad financial choices. I watched my parents constantly live with clouds of credit cards debt hanging over their heads. I vividly remember my grandmother explaining to me how she “robs Paul to pay Peter” as her social security benefits didn’t quite cover her monthly bills.
What has been the hardest part of your journey?
Saving money has always been very hard for me. As a child, I heard at Sunday School on a number of occasions that getting into heaven is easier for poor people because rich people hoard money. (Fun times!) I recall thinking, "Well, I'll never have that problem!" I constantly have to fight the ingrained correlation between saving money and hoarding it (and thus going to hell).
Now that our only debt is the mortgage, I feel compelled to pay it off as quick as I can. However, I have been advised that saving for retirement and college is more important as I enter my 40's. Additionally, having experienced being poor when I was young, I love giving my family all the things I didn't have as a child.
I grew up in a family of six children and lived most of my childhood life in a two bedroom condo. There was never enough money so thrift stores, rented furniture and food donations from friends were norms for me. While I am not out buying all the designer purses and flat screen TVs, it is hard to say no to vacations, activities for the kids and organic produce.
What are some of your tips for living a debt free life?
- Create a plan. It is extremely important to have a clearly defined goal and a plan to reach it. It is not enough to say "I want to buy a new house someday." A better statement would be, "I plan to save 5% of my paycheck each month towards a down payment for a house that I will buy in June 2020." Whether you are on the Dave Ramsey baby steps or created your own method, outlining a clear plan will significantly increase your chance staying motivated and being successful.
Since becoming free of debt except the mortgage, the focus of my financial journey keeps evolving. That's a fancy way of saying that I know I need to move to the next level of building wealth, but I am not sure what path to take. I am in the process of redefining what financial freedom means for me and my family and putting a plan in motion to make it happen.
- Avoid debt altogether. As a result of my experiences growing up, I tried throughout my life to keep my debt to a minimum. Paying interest and owing money never felt comfortable to me so it came natural to work hard to avoid or eliminate debt. I was blessed to pay off my student loans within the first years of my marriage.
We then tackled the debt we accumulated in our marriage including car loans and a horrible home equity loan.
- Keep your goal visible. This way you are reminded every day what you are working towards. I feel a bit hypocritical writing that seeing how I am working to clarify my goals and come up with a plan, but it worked wonders when we were paying off debt.
- Surround yourself with the right people. Finding like-minded people has been my number one motivator. The Instagram community that is focused on being debt-free is incredible. When I am excited about saving $.38 on a pair of socks and my husband thinks I've lost my mind, the debt-free community understands and provides the support I need.
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What are some of your financial goals for the rest of the year?
My number one goal this year is to create a financial plan for the next few years so that I can "retire" in June 2022 when my grant-funded job ends. Additionally, my husband has some time off work this summer so we are planning on doing some traveling around the States. We are planing to cash flow any vacationing we do, so we are saving up for that. Returning home to a credit card bill is not an option. I am also trying to save money towards a down payment on a home to be purchased in 2018 or 2019.
Be sure to check out Grace's blog, The CFO Mom and of course her Instagram @thecfomom for more tips on becoming debt free and staying motivated. Thank you, Grace for sharing your story!
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