Miko Love, 33, was swimming in debt. She had a mortgage, student loan debt and credit card debt. She worked at a financial institution, yet she didn't know how to manage money or make a budget.
She wasn't taking it too seriously until her son James was born almost seven years ago. Then she knew she had to do something. "It wasn't about trying to manage my finances," she says. "I had to manage my finances."
The now single mom has turned her own journey of shedding $77,000 in debt into her website TheBudgetMom.com, "Budget-by-Paycheck Workbook" and YouTube videos.
She's very real in her approach and shows the good, the bad and the ugly of how she got to where she was and what she had to do to get out from under her debt.
The reward of the hard work is "I'm really at peace with where I am," she says. "I also learned that spending money isn't what makes you happy."
Living in Washington state, she traveled to Austin last month for a friend's birthday party, which she had carefully budgeted: expenses anticipated and cash tucked in designated envelopes, the system she uses to control her spending.
Paying down debt and cutting expenses can feel restrictive, Love says, until you discover your purpose. "Why am I doing this? Why do I want to be better with my finances?"
When you have a goal, you make the mind shift, she says. Instead of thinking, "Wouldn't dinner out be great?" it's about, "Does that get me closer to my goal of paying off the debt?"
"Creating a budget is a reflection of who you are, your values," she says. It shouldn't be something that someone else does for you; instead it's about "making it 100 percent personal," Love says.
She started by listing out her life goals. Paying off her debt was No. 1. She focused on what she could do now instead of getting bogged down in how she got into debt.
She listed all of her expenses and figured out that she needed to cut down on spending and make more money. Cutting down on expenses looked like not eating out, which she figured out she was spending about $400 a month on previously, and not buying any new clothes for a year. She also set up a budget for each category of spending and puts that cash into an envelope for that category each paycheck. If the money runs out, she has to either stop spending in that category or use money from another category and then do without in that category.
Making more money looked like learning how to take real estate photos for real estate agents when she wasn't working her day job.
Love still writes down by hand all of her income and her expenses. She finds that the writing it by hand rather than logging it into an Excel spreadsheet reinforces her budget for her. Her workbook helps people do that for themselves.
She also always has a miscellaneous fund and an emergency fund when things come up. She realized that those unexpected expenses can really put you further behind financially or wipe out the progress you are making. When she was in a motorcycle accident, she had a $12,000 medical bill setback, but she had the tools to get right back to wiping out the debt.
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Last year she was able to pay off her student loan debt, which was $35,000.
Her budgeting has trickled down to her son, who gets $5 a week for allowance and can earn extra money by doing chores. He has several things for which he is saving, including a Fisher-Price laptop and wrestling shoes.
"It's truly about the psychology and the emotional," she says. She had to stop feeling bad about what she couldn't give her son or what she couldn't buy for herself and focus on the peace of mind she would have when she became debt-free.
"I thought it was impossible," she says. "I never thought in a million years I would have absolutely no debt."