This week, we’re talking about overspending as we continue to highlight a few of our favorite success stories and learn from people that have taken the 90 Day Budget Bootcamp or our Home Management course, Hot Mess to Home Success and applied it to their life.
Welcome to one of my favorite features here on The Busy Budgeter. Because I learned so much from other success stories in my own journey to financial freedom, I wanted to make sure that this was a regular feature. Those success stories were the driving force behind finding a way to reduce our spending by over $23,000 a year, paying off over $35,000 of debt, and then making up my old salary from home.
My favorite part about today’s success story from Heather O'Donnell, is that on paper, she made choices that weren’t the “typical” decisions that we see in financial freedom journeys. While paying off $68,000 in debt, she chose to save up $25,000 and spend it on a wedding and then purchased two new cars before buckling down and paying off $90k in debt.
But after working with thousands of readers to conquer overspending and pay off debt, I can tell you that Heather’s story is what real life success looks like. It’s not about writing a dissertation on how to spend the least amount of money before you die.
It’s about getting the results you want with the personality you have (since you can’t exactly change that)… And Heather is a perfect example of a real-life success story.
How Heather Overcame Her Overspending
The following was written by Heather O’Donnell of HappyHumbleHome.com
If you told me 5 years ago that I would be a blogger who gives people money saving tips, strategies for overspending and frugal living advice on the internet, I would have fallen over laughing.
Because I used to be terrible with money.
Back then, it never occurred to me that money needed to be managed or saved. I just thought that money was meant to be spent. And the more you have, the more you should spend.
So that’s what I did. I started a habit of overspending on everything.
I worked hard to make as much as I could. Then as soon as I got paid, I would spend, spend, spend it all away.
Why I Was Overspending
Life was about saying YES! to every single thing I ever wanted. In fact, I was buying more clothes than I could even wear.
To this day, I still have a closet full of handbags I never needed to buy.
But it went far beyond material things. I said yes to every experience I was offered.
If a friend asked me to go to a concert, or a restaurant, or on a trip, I would always say yes. Even if I couldn’t afford it.
Even if it meant putting it all on a credit card. I never wanted to miss out on anything.
I didn’t want to feel deprived and I told myself I deserved it. This continued for a long time.
I was stuck in a cycle of being totally broke, getting paid, spending every cent of my money with abandon, then being totally broke again.
Why was I always broke?! I was pretty sure the problem was that I just didn’t make enough money.
Everything was just so expensive. I thought “It’s not my fault everything cost so much.”
When I finally started my professional career as a teacher at 26 my income doubled. And my spending doubled with it.
It should have been different. I was making a lot more money, but I didn’t actually have more money.
Ignoring My Debt
I wasn’t just broke, I had negative money. I had $68,000 in student loans that I wasn’t even thinking about.
They were deferred while I was in grad school and when I graduated I was put on a payment plan for $403 a month.
And I was totally resigned to paying that $403 for the rest of my life.
$68,000 was more money than I could even imagine, let alone pay. It hadn’t even occurred to me to try and pay it off.
I saw my future self with my own kids in college still paying that $403 every single month.
Let me tell you, It didn’t feel good.
I was so embarrassed of my financial situation. I was depressed. And, I had all this stuff but I didn’t have any money.
In addition, I always felt broke — unless it was payday.
Things felt completely out of control.
Anytime I thought about my financial situation, I felt sick. In theory, I could change it. But every time that I tried, it just didn't work. I ended up back in the same spot as before (or worse).
So, my solution was always not to think about it and I was getting pretty good at avoiding all financial thoughts.
“Want to Marry Me? (And My $68,000 in debt?)”
That all changed when I fell in love.
Of course, he was the polar opposite of me.
He was super responsible. He always paid his bills on time, and he didn’t have any debt.
We were very different and I knew it. My plan for making our relationship work was just to never talk to him about money. (Seems solid, right?)
Any time he brought up a financial topic or asked a question about my money situation, I’d get mad, say it was none of his business, and start an argument.
I wasn’t even really mad, I was just so embarrassed that being mad seemed easier than dealing with it.
Believe it or not, that actually worked for a while. But then he asked me to marry him. And it officially became his business (well-played sir.)
It was terrifying
So, I started explaining my financial disaster slowly. And when I did, he was more understanding than I expected, but also persistent that I work to clean up the mess I’d created.
Novel concept right?
Naturally, I was super resistant. Not because I didn’t want to fix it, but because I literally didn’t think it was possible.
One night, we had a huge fight about the debt that ended with him storming off to bed and me crying in the living room.
I remember that night so vividly.
It was that night that I changed everything.
From Overspending to Saving
When I finished crying, I got up and took a long, painful look at all my bills, all my debts, all my overspending, and all my mistakes.
I wrote it all out on Post-Its. There were Post-Its everywhere! (Not sure what I wrote out? Sign up for the free 90 Day Budget Bootcamp- they teach you how to get control of your finances step by step for free).
Looking at the whole picture like that, I still didn’t think I could fix it all. But I could see that there were probably a few things I could be doing better.
More than anything, I really wanted a successful marriage with this man whom I loved. I wanted it bad enough to try to change.
So I started doing better.
I set a small goal.
And, I made a little plan for paying off my credit card, which was around $600 and much less intimidating than the $68,000 student loans.
I decided to dedicate as much money as I could to paying off my credit card debt as fast as possible.
So I stopped shopping so much and really curbed my overspending. I started doing little things like cooking at home and bringing my own coffee to work.
Those little things made a huge difference in a short period of time.
I had my credit card paid off in one month.
I was so proud of myself.
It was the first time in my life that I felt successful with money.
But paying off the credit card wasn’t what I really wanted.
What I really wanted was a big wedding.
My husband and I got engaged and I guess you could say, I went a little wedding crazy.
It was so exciting to plan my dream wedding. Until we started talking about how we were going to pay for it.
My husband and I were paying for our wedding on our own and if we wanted a big wedding we were going to have to save a lot of money.
$25,000 to be exact for the wedding of my dreams.
Most of my husband’s income was already going toward things like paying our bills and our mortgage and buying food. You know, all the important stuff that was keeping us going.
So, it was clear that if we were going to save $25,000 for our wedding, it was going to need to come out of my money.
At that point, we hadn’t combined our incomes yet and it did feel very much like my money.
At first, this $25,000 goal seemed totally impossible.
Could I Quit Overspending And Actually Do This?
I wondered if I even made enough for this to be remotely possible.
But I kept looking at the wedding magazines, and talking to friends and pinning my heart out over on Pinterest. I just couldn’t stop thinking about it.
So, I did the math. And I realized that if I stopped shopping and overspending on things I didn't even want and devoted every spare cent I had to saving for my wedding, I could do it.
And I wanted my wedding so badly.
I wanted it enough to completely change my behavior. (To be fair, I wanted it much more than I ever wanted to pay off my student debt).
I stopped shopping, stopped eating out, stopped going on expensive adventures with friends. I stopped overspending and I replaced all of those things with wedding planning and wedding outings.
Every time I thought about my wedding I got more excited about my goal.
While I can’t say I was always perfect, I worked hard and saved $25,000 in 18 months (thanks to a little help from my husband).
I was totally shocked that I actually reached this giant goal.
Here I was finally feeling like a financial success again. This time on a much bigger scale.
It really changed the way I thought about myself and money. I used to think “Oh, I’m just bad with money” like it was something I couldn’t change. Like I was thinking “Oh, I have brown hair.”
But saving $25,000 almost entirely on my own radically changed my mindset.
Suddenly, I started thinking of myself as someone who could be financially successful if I tried.
I realized I had control over my money, how it was spent, and how much I was left with.
This probably seems super obvious to most people. But what you know to be true on paper and what you actually believe in your heart can be two different things.
Working as a Team
My mindset shift happened at a good time.
Because I'm getting married now and he's going to see exactly how much I make, how much I spend, and all the little choices I make along the way.
It was still a little scary, but not as terrifying as it once was.
Now that I knew how to control my spending, I was in a much better position to share my finances with him.
Since I had built up my confidence by accomplishing this big goal, I could actually talk to my husband about money.
It wasn’t easy all the time. But I stopped running away from it. I stopped being embarrassed. And we started tackling our finances as a team.
We started making a monthly budget.
We wrote down all our income and expenses and decided together how our money would be spent.
Once we set goals together, like paying off our debt which was now at $105,000 since on top of my student loans we also both bought new cars.
Our budget was based on our goal. All of our extra money at the end of the month was going towards paying off debt.
Actually paying off $105,000 still seemed a little far fetched to me. But I knew that I could save $25,000 in 18 months for our wedding so I knew that someday we’d be able to pay off our debt.
We set a monthly budget meeting each and every month and we make it a priority.
During this time, we look back at the previous month and evaluate how we did.
Then, we look ahead to the coming month and map out a plan for our money.
We answer questions like:
- What special events are coming up next month?
- Do we have extra expenses?
- What bills do we need to pay?
- How can we lower our costs?
- How much debt do we have left?
Just taking the time to get on the same page about our money as a team has been such a game changer.
Suddenly, I started feeling accountable to my husband, and to myself, to stay on track and continue to work towards our goals.
The night on the couch with the Post-Its everywhere was 5 years ago.
Since then, I have completely changed my life.
I pulled myself up out of the financial gutter and have arrived at a totally healthy financial place.
Now, I no longer feel embarrassed or ashamed to talk about money.
Today, I’m confident that I can manage my money well.
In fact, these days I’m actually pretty great at saving money, and my husband and I are a pretty awesome financial team. We've paid off over $90,000 in debt!
We are so close to the finish line, I can taste that debt-free feeling already.
It feels so good, I know I will never go back to my overspending ways.
If you know this is something you need to do but you have no idea how to get started… it’s probably a lot easier than you think.
The 90 Day Budget Bootcamp walks you step by step through everything (including how to use what you WANT to get you to do what you NEED, even without willpower).
Because paying off $90,000 in debt in a little over 3 years is impressive, but there’s no way you can get the same results and stop overspending by reading through a quick article on the internet.
A Strategy That Works
You need a proven breakdown of every single step.
From learning how to set up and track a budget that you’ll actually keep up with, to learning the home management tricks that support your efforts to save money (like how to make yourself start cooking at home every night even if you currently go through the drive-thru 5x a week), the 90 day Budget Bootcamp is the only free resource that walks you through the entire process.
Slow consistent progress leads to success
Going from broke and overspending to frugal budgeter didn't happen all at once. It was one small change on top of another small change over and over for 2 years.
Looking back it’s so clear to me that reaching the small goal of paying off my credit card debt enabled me to save the money for my dream wedding. Also, reaching the big goal of saving for my wedding gave me the confidence to manage our finances as a team with my husband and pay off $90,000 worth of debt!
I transformed my finances just by setting specific goals, crafting a new budget each and every month, and remaining confidently consistent even when things get hard. And I have to tell you, I am unbelievably glad I did.
Heather O’Donnell is the founder of HappyHumbleHome.com where she teaches women to experience financial success with money-saving tools, tips, and tutorials.
As a reformed overspender, Heather is passionate about showing others that they can save money without suffering and being frugal can be fun, if you’re doing it right.