‘Budget Fashionista’ Shares her Debt Management Success Story!
Kathryn Finney, founder and operator of The Budget Fashionista website, is an Ivy-League educated young woman who fell into a vicious cycle of debt. Like many Americans today who have overextended their finances or fallen on difficult economic times, Kathryn faced significant credit card debt that nearly left her broke and made it difficult to make ends meet. After years of curbing her spending and changing her money management habits, she is currently debt-free and shared her story about the steps she took to get her finances in order.
One of the first and most difficult steps she took was admitting to herself that she had a problem. She allowed herself to overspend without truly realizing the consequences and long-term implications her behavior had on her finances. In addition, she also explained to family members and friends that she was heading down a dangerous path, and the reasons she began changing her behavior. For example, rather than spending money to travel home to visit family, she requested that they fly to see her, to save money on pricey plane tickets.
Second, Kathryn forced herself to face her financial condition by reviewing several months’ worth of bank and credit card statements to see where her money was going. This eye-opener allowed her to see how much she spent on unnecessary items.
Third, to stop spending immediately was crucial to her success. It can be tempting to justify small purchases or luxuries, but this is counterproductive to the overall goals and contributes to the cycle of spending more difficult to break. This is especially true for those who frequently make impulse purchases without truly realizing how much they add up over time.
In addition to curbing spending, Kathryn said that she started to live below her means to free up more income to put toward debt and savings. For example, Kathryn and her husband each had a car, and decided to sell the car with the higher insurance premium and monthly payment. As a result of this change, they were able to save more than $700 in gas, insurance and payments each month. Many Americans who face significant debt may consider following these steps themselves and unload luxury items they don’t truly need to make a larger debt payment or free up income each month.
Lastly, financial education is important for anybody, regardless of their debt condition or income. People who face significant debt should seek out resources that not only guide them on how to reduce debt, but how to maintain savings and credit health.