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What does debt have to do with parenting?

When you’re a parent you are always aware that your kids are watching, listening and learning from you how to be an adult. Even if you think your kids don’t know you’re up to your eyeballs in debt, chances are they know something is up. They have an uncanny ability to sense your stress and frustration like little bloodhounds.

Christmas Presents

Did the holidays leave you in debt? Give yourself the gift of getting out of debt and you’ll give your family a legacy of financial security.

When I was a little girl I remember bountiful Christmas mornings, but I also remember many occasions in which our lights or cable were shut off as a result of overdue bills. I remember the constant calls by debt collectors and being warned not to pick up the phone. All of it made an impression on me. Though I might not have made the connection clearly until years later, I got the point that while we weren’t in dire financial straits, we weren’t on a good path either. It’s one of the reasons it’s always been my goal to be able to pay all my bills on my own (laughs the Stay At Home Mom). That to me became a marker of success, not being chased after by bill collectors, but that was only one part of the picture. It took enough mistakes with credit to make me realize that we would NEVER be successful without first getting out of debt. The lesson I inadvertently took from my family’s financial missteps were that your stuff should never own you; you should own your stuff.

Nearly four years ago, I became a Stay-At-Home Mom and it became more important than ever to get out of debt. Here are 6 surprising strategies that have helped us. Once we get our tax refund in a few months, all our debt except our house debt will be paid off. WOOO HOOO!

1. Ditch the Denial – Sometimes we don’t even want to know how much debt we’re in. That denial keeps us comfy and cushioned from our mistakes and allows us to play the “I pay the minimum balance” game, which keeps us focused on making payments instead of paying off debt. The first thing you have to do is get real with yourself and your spouse. Lay it all out, every balance, every minimum payment and look at it. If that doesn’t get you fired up to see how much money you’re spending each month on stuff you already “own” I don’t know what will.

2. Find a Financial Guru – For me it was Dave Ramsey and Suze Orman that I looked to for advice when I was first staring down our mountain of debt. Dave Ramsey breaks down saving, debt repayment, retirement, college funds and even giving into baby steps. Get your butt to the library and check out what the experts have to say (sorry Dave and Suze, but I didn’t have the money to pay for your books). Follow them on social media. Follow their blogs. You’ll find helpful advice and inspiration to keep pushing you forward.

3. Get an Emergency Fund Stat – Why does Dave Ramsey tout this as Baby Step #1? Because life happens, cars need repair, hot water heaters go, or an unexpected trip to the ER are all bound to happen. We don’t know when or where they’re going to happen, but I guarantee you they are coming. In our second year into paying off debt we had both cars taken out of commission in the same week. Without savings, you’ll go running straight to credit to bail you out. That’s like walking the treadmill while eating Oreos. Sure you think it’ll all balance out, but the more debt you stack on top the harder it is to get out from underneath it. Dave recommends $1,000 to start and once debt is paid off to move onto saving 3-6 months of your income.

4. Start Small – This seems counter intuitive to start paying off the smallest balance first. Why not start with the highest payment or the highest APR? It’s because we’re creatures that need constant motivation. If we go years before we see our first debt erased most of us will quit before we get there. Get some quick wins by erasing small balances first and you’ll want to keep going.

Similarly, when you’re looking for ways to cut your budget start small. Start by giving up things that don’t hurt so much, like that extra night of eating out a month, the manicure, or the subscription you don’t use anymore. It can be SO tempting to cut all the fat right away, but when you start out small and give up one or two things at a time it doesn’t feel so hard. Just like dieting, cutting too much out at once makes us feel deprived and we eventually decide we can’t do it. Small changes are what add up over time. Start with the small changes in your lifestyle and then challenge yourself to do more. It’s how you build lasting lifestyle changes that’ll keep you financially fit even after the debt is gone.

5. Stop Thinking Saving Money is the Answer (By Itself) – There are thousands of articles floating on the net about how to save money. Heck, I’ve written a ton of them. The truth is that if you don’t apply those savings toward your debt, it’s going to fall through your budget cracks and get spent on other things.

When you don’t take those savings and unexpected financial windfalls (raises, bonuses, tax refunds) and apply them right away, chances are you won’t. Put together a debt repayment plan. The first thing I did when I became a SAHM was to track our prior month’s expenses and then set up a simple budget. The second thing I did was create a debt repayment plan. It’ll help you see at a glance what debt you have, what money you’ll use to pay it off and the time frame it’ll take you to do it. Here’s a sample of mine – Debt Repayment Plan Template. If you love charts, by all means do those too. Whatever motivates you, will keep you moving forward during setbacks.

6. Get Excited!!!! – Looking at debt repayment as a chore will get you nowhere. I know it can be hard because it seems daunting when you’re in a lot of debt. It’s probably going to take you years to get out. You didn’t get in debt overnight, so can you really expect to get out that quickly? You gotta find joy in it. I think of each debt gone as one less link in the chains that bind me and our family. I know some people can’t even imagine what it would be like to be out of debt, I URGE you not only to imagine it, but to know it’s going to happen. Let that thought take up residence. When you can’t picture it, you don’t usually move forward let alone start sprinting toward it with open arms.

I’m so excited for our tax refund I can hardly sit still. I don’t dream of new cars or expensive vacations. I dream of what it’ll be like to actually have the money we earn instead of just watching it come into our account and go right back out. Don’t be bummed by the sacrifices you are making. Be proud of each stride, even when something throws you temporarily off course. Don’t be upset every time you say “No” to your kids, your friends or your spouse. Think of how many more times you’ll be able to say “Yes” in the future. Think about how much less stress you’ll have.

Game of Life

If we want to teach our kids how to win with money, we have to show them by example. The Game of Life is a good game to show kids the importance of making good financial and life choices.

Real Lessons From the Game of Life

Most importantly, remember what you’re teaching your kids during the process of getting out of debt. You’re teaching them how to be responsible with money. You’re teaching them to be patient and work for things instead of just expecting to get them right away. I was playing the game of Life with my kids a few weeks ago and I thought, “Man, this game is spot on!” If you want to get a higher paying job you have to take the college path which is longer and delays your paydays. If you take out debt you have to pay more back to the bank than you borrowed. It was an awesome game to teach your children to make smart choices.

I hope this year will be a better financial year for you and me. How much debt have you paid off and how did you do it?

Looking for ways to scrape up cash to pay down debt? Check out – 20 Ways To Make Ends Meet When You’re Scrapping By, Part 1 and 2.

Erin Johnson a.k.a. The No Drama Mama can be found blogging at Hudson Valley Parent Magazine and when she’s not wiping poop or snot off her otherwise three adorable kiddos. This frugal, “tell it like it is” mama has NO time for drama, so forget your perfect parenting techniques and follow me on Facebook or Twitter for my delightfully imperfect parenting wins and fails.

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