About six months ago I made a pretty big decision, a scary decision for me. But, I knew if I didn't do something dramatic, I wouldn't be able to create change in my life. I took my three credit cards and I put them in the shredder. These credit cards didn't have very high balances on their own, but when you put them all together there was definitely some interest that I was paying on a monthly basis. After reading a couple of books, I realized that we were not getting ahead as a family, because our focus was just trying to pay down our credit cards.
After shredding my credit cards, I no longer had the option to leisurely shop or spend money. I put myself on a budget and started living on cash. Once I shredded my credit cards, I aggressively worked to pay them down as quickly as possible. I have been using the envelope system, which stems from the concept of not only living on cash, but telling your money where to go.
Every two weeks when I get paid, I evaluate my budget, my known expenses, and upcoming expenses for the rest of the month. This has had a significant impact on our family's financial future, and it's not something I intend on quitting anytime soon. As we continue to work on increasing our own income and multiple revenue streams, w are working towards increasing the amount of savings that we have, whether it's for our kids college or for some projects that we want to do on our house – regardless of the financial goal, we want to be able to cash flow our projects, rather than look towards taking out a loan or using a credit card.
This was definitely was not an easy transition for us to come together as a family. However, we have two teenagers and it's been very powerful in how we speak to our children about money. Our financial conversations have changed dramatically, in a very positive direction.
Watch this video to learn about my different envelopes and what I do when I get paid every two weeks.
Books that inspired me to get started: