My Debt-Free Journey & How to Reset For the New Year

New Year’s is a time when a lot of people decide to start saving or be more conscious with their budgets. Unfortunately, many people quit on that goal because it is so hard.


Sometimes it takes hitting rock bottom and feeling desperate to push you to be ready to do anything to get your budget back on track.


My family is on a debt-free journey to pay off over half a million dollars of debt, and we have come so far. Today I want to share some advice based on my debt-free journey and hopefully help you do a New Year reset.

I cannot believe it is 2023. We started our debt-free journey four years ago. Since then, we have paid off about $580,000 of debt, including student loans and business debt for our medical practice, which is the only remaining debt that we have.


We are also trying to buy our first home right now. Those are our two main financial goals at the moment, and we are working on them simultaneously.


Any extra income that comes from our shared business we use to pay off that loan, whereas the income that comes from my business, which is “Making Frugal Fun”, goes towards buying a house.


Let me tell you about the budget-related tools that we use to achieve our goals. My family has found it very useful to use cash envelopes to stay on track with our budget.


We did that a lot in the beginning with almost every single category. Now that we have gotten better at budgeting, we do more digital stuff.


One thing we did once we finished all our personal debt is we opened three separate bank accounts. My husband has a Fun Money account, I have a Fun Money account, and the kids have a Fun Money account, and that helps us with our miscellaneous expenses.


We put a set amount in there every month, and you could save your money if you want, if you are saving up for something bigger, like a purse or something like that, or you can give yourself permission to spend it all.

Sorting out finances

This helps you be freer in your spending, and you can do the same thing with cash. When we were only beginning to get out of debt, I believe we had $25 each for Fun Money, then we upgraded to 50, and then we got up to 100 right at the end of our debt-free journey. That really helps you to stay on track with your budgeting.


I also recommend using a budget planner, or a financial checklist. I have noticed that a lot of people want to follow a financial plan to get out of debt, but many get lost on how to get started.


This got me thinking about what I did when I was feeling overwhelmed in the beginning of our way. There were a few steps that I personally took that really helped me get a grasp on things and feel less overwhelmed.


In the beginning of budgeting, what helped me was printing out my bank statements for the last three to six months and then just going through every transaction and categorizing them into what is absolutely vital, what is important, and what is something that I really could do without.


Another tip is to review budget percentages that are recommended and then set your own budget percentage goals, based on what is realistic for you. I think that being realistic in your budget is one of the most essential things if you want it to work.


If you decide to spend $50 on groceries this month with a family of six, you are inevitably going to fail. Start by reducing your groceries (or other budget categories) just by a little bit, and get used to it. Then, once you succeed, you will feel more motivated and you can keep cutting.


As the prices are rising, there are only two paths for each of us to choose from: you either cut more out of your budget or make more. It is definitely easier at first to cut your expenses back than it is to make more money - that comes with time.

Saving money

For us, making more money was always a struggle, especially during the pandemic. We were always trying to cut back, see what else we could cut out, and stick very tightly to our budget.


Only two years into our debt-free journey was when I was able to grow my business “Making Frugal Fun”, and this is when we started making more.


Now that some stress is off, with the student loans and the personal debt gone, I have had more of a clear mind with our medical practice. Now we can explore different ways that we can invest in a marketing company to help us get more patients and to help us grow our income.


In contrast, when I was drowning in debt, living paycheck to paycheck and freaking out every day, I could not see moneymaking opportunities. I was just barely hanging on. So do not try to think of everything at once.


When you are just getting started on a budget, you have to do just one thing at a time. Just like with the debt snowball, where the more you pay, the bigger your payments become, cutting your expenses can also snowball.


You cut a little here, cut a little there, and you realize you can do it. Once you feel more motivated and excited, you start thinking of more ideas on how to make money. We started doing DoorDash and any side hustle we could do.


My debt-free journey

I wanted to share our experience in case you are feeling as overwhelmed as I did at the beginning of my debt-free journey. I hope these tips are going to help you to understand how to reset for the new year and succeed in your goals. Good luck!

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  • Karen Little Karen Little on Jan 29, 2023

    I'm trying to cut my debt. At 74 I find myself in financial difficulty yet again :( My income is fixed (I receive CPP and OAS) -- I didn't have any type of "company" pension as I was in private practice the last few years of my working career. Unfortunately, I did more "pro bono" work then "paid" work and that can only create financial issues. Due to a; combination of health related problems I had to retire at age 57 and only had some very par time work after that point. My rent takes over half of my income -- I am in an apartment that is at the bottom end of the "market" price. Getting into "Seniors Housing" which is geared to income is very difficult -- most people are on "waiting lists" for years prior to accessing this type of housing. I have a budget and stick to it. However I need to get rid of about $10,000 in debt so I can leave this world without leaving debt for my son to pay -- its hard enough having a parent die without them leaving debt behind! I have many skills, I love to sew and make many times that could be sold. The issue is how to do that. I am not able to attend craft markets (I am physically disabled and don't drive). I haven't yet found a "consignment" shop in which I could sell some of my makes. (I moved to a new city 12 years ago and have had no success finding a consignment shop in this city of over 600,000 people!) Anyway, your article shows me that I am on the right track. I just need to find a way to increase my income so I can get this debt paid off.


    • Bonnie Croker Bonnie Croker on Jan 29, 2023

      Have you considered Etsy, eBay, or Facebook Marketplace? If you have the ability to offer flat-rate shipping mailing your items might be an option. What about putting up flyers at the local library, community center, bulletin boards at the grocery store, cleaners etc? Just a few thoughts on how to jump-start your selling of items.

      Also, I don't understand how your debt will be your son's responsibility once you die. (None of my business, I just don't understand how that applies.) Best wishes for success.

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