“What are we going to do? , we just can’t afford this”. I found myself sitting at the table, once again in tears and stressed over money. I had just had yet another argument over money with my husband about an extremely large and scary tax bill that needed to be paid in addition to our “normal” debt and upset as the side hustle business we had poured ourselves in to looked to be closing its operations. We were living paycheck to paycheck. We had no savings. We had very little Superannuation. We were broke – dead broke.

Feeling stuck on what to do in regards to employment and income, because the medical needs of our children and those of myself dictated what our options were as Carers we knew that both of us working away from home was probably going to be unrealistic – this was certainly feeling more than a challenge. This is one of the hidden challenges of being a Carer, and why only 56% of Primary Carers participate in the paid workforce. But I digress! The more desperate I started feeling, something inside me began to shift. We had to do something, and fast. It was time to get creative and think outside the box.

I had already read ‘The Barefoot Investor” (see my review HERE) the year beforehand, and while I had begun to make some changes I guess my ‘why’ or desperation wasn’t strong enough before because this time it all changed. This time I became laser focused like our lives depended on it.

The very first thing we did was stopped sticking our head in the sand and actually made a proper budget. We sat down and physically wrote out not only each and every bill, but everywhere we had been leeching money. We also wrote down all of our income. It didn’t take me long to realise how irresponsible we had been . Suddenly I came to realise that the reason why we had been so broke was because we had been spending WAY beyond our means. We were living the lifestyle we had become accustomed to when I was a travel agent, prioritising lavish trips away ahead of all other needs- including debt, long term savings or even what we would need in the next few months . Home ownership was a dream we just didn’t entertain because we knew (or thought we knew) that it would never happen for us.

We immediately decided to set aside 20% of every source of income to firstly save up an emergency fund (because Murphy is basically our housemate) and saved up $2000.00. In truth, we not only saved 20% of income but we did what we could to earn any money above and beyond the 20% or we sold unused household items on Ebay. Any spare money left over at the end of the pay week also went towards our emergency fund. The idea of this is that when you are trying to pay off your debts, if you do have an emergency situation occur then all of your efforts won’t be derailed and you will have the funds on hand to pay for it. Which was just as well because when my husband needed emergency dental work, we had the money to cover it! Once we had this saved it gave us confidence to move to the next step.

The Debt Snowball. There are a few ways to tackle paying off your debts, but for us this method was the easiest. The way that this works is that you list all of your debts, from the lowest amount due (not the lowest repayment amount) to the highest amount. Now that you have listed them all, you point 20% of your take home pay towards paying your smallest debt whilst also continue to make the minimum repayments of all other debts out of your normal account. Once that first debt is paid off, use the minimum payment amount you would have paid to that debt and point it at your next debt in addition to the 20% and so on until all of your debts are paid. This is exactly the strategy we used to pay off a hefty car loan and two credit cards in 8 months!

After I could see on paper where money was being wasted, and once we figured out our debt repayment strategy we systematically went through and questioned EVERY expense. I didn’t realise that we had a choice with our expenses such as utilities and mobile costs, I thought everyone just paid what we did. I thought living paycheck to paycheck was just what people did but the more I educated myself the more I realised how wrong I was. How unprepared I was for the future and truly one pay away from disaster. I was mad! Mad at myself for getting into such a mess, mad for being ignorant and irresponsible. I just wanted the debt gone yesterday. We knew our rent wouldn’t change, but we looked at all of our utilities and how we could secure a better deal. We realised not only were we massively overpaying for our mobile phone bill, but we were out of contract. So we searched Comparison Sites and looked for the best deal! Check out how we scored an amazing telco deal HERE in this post. We checked out every single insurance policy we had and used comparison websites to see how we could better our deal. This step literally saved us hundreds of dollars alone! Check out my post on Comparison Sites HERE . We looked at any unnecessary subscriptions we could cancel, and we looked at how much we actually wasted eating out (this was a huge expense) and how we could cut this. Watch this space on how we used Dining Hacks to get more bang for our buck! This particular change I admittedly struggled with as I do love dining out and I love a good coffee, but we found that if we saved 10% of our take home pay to spend towards items or outings to splurge on then it really did help us stay on track while not totally depriving ourselves. This is what I attribute our staying power to! We saved a further 10% to save for bigger ticket items such as a smaller domestic getaway, and a new TV when ours broke down (we didn’t dip into the emergency fund for that!).

We used goal trackers to keep us motivated and marked off repayments systematically, giving a little fist bump every time we did! When each individual debt was gone, we definitely did a happy dance and celebrated, and that is so important to celebrate the wins! I used my daily planner to keep track of payments , debts and how I could keep reducing costs. My daily planner became my central family hub and lifeline.

I also soon learned that there were other things I could do from home to contribute to the family budget, and I started to undergo some paid survey and marketing work . Payments generally are in the form of Gift Cards , but when you can redeem it at the grocery store I definitely view those to be as good as cash! See our guide to paid survey work HERE. Completing the Survey and Marketing work at home meant that I was able to shave generally $20-50 each shop. And whilst we are on the subject of grocery shopping, I also learned that meal planning and cooking meals from scratch using my Thermomix allowed us to cut our weekly grocery bill for 7 people down to about $80 a week! A fact that I am quite proud of as we eat really well. I also found using Click and Collect help me stay on top of my budget.

When the kids needed clothes , I needed to buy gifts or we needed anything extra outside of our normal grocery shop I then did everything in my power to avoid paying full retail. Firstly, I would try and give myself enough time to compare costs online and find the best deal as walking around the shops had become difficult for me with my MS diagnosis. I would then look at how I could receive either loyalty points (and therefore a further discount) or a cash back on those items. I was pleasantly shocked at how many retailers participated in these types of Cashback schemes. Check them out HERE!

Once we had finally learned to live within our means, it made paying off that debt so much quicker than what we had originally anticipated as we threw any spare penny towards it! We finally felt like we had control of our money, and after going through our journey and coming out the other side debt free we truly came to realise that what mattered most was how we made our money work for us and how we could stretch it as far as possible to achieve our goals. I’m proud to say that since that time, those good habits have stuck with us and allowed us to do so much more and spend or invest money wisely – in all honesty more than we ever thought that we were capable of or would have given ourselves credit for. Being debt free allows for choices and opportunities, and although it is hard work and painful (due to a few home truths and self-realisation) it is one of the best things I have ever done – certainly the single most important financial decision I have made to date. To anyone reading this just know that you can do it too, you just need to make the decision to start. Melissa xx