6 budget tips from an author who paid off almost $30K of debt in two years

Click to play video: 'Learn how to manage your  finances with author of ‘The Year of Less’'
Learn how to manage your finances with author of ‘The Year of Less’
We talk to author Cait Flanders about the year she went without buying anything and how she learned to manage her personal finances – Jan 22, 2018

In 2011, Cait Flanders’ credit card debt had spiraled to $30,000.

Spending money that she essentially didn’t have, Flanders splurged on things like partying, buying furniture, or taking out a car loan with her credit card. After maxing out her cards, the 25-year-old B.C. woman finally realized she had to take a step back.

“I felt like such a loser,” she tells Global News. “I thought I had hurt any chance of having a good financial future.”

Today, the 32-year-old author of The Year of Less, says she was extremely aggressive with her approach to pay off her debt between the years of 2011 to 2013 making $50,000 a year. Looking back, she wished she did things differently.

“The problem with how aggressive I was is that I wasn’t taking time to learn the lessons of why I had gotten into debt in the first place. It’s not that surprising, but when I paid off my debt in 2013, I went back to my spending habits but didn’t go back into debt.”

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Calling herself a “mindless spender,” Flanders started writing about her finances on her blog. In 2013, she first wrote about paying off the almost $30,000 in debt in less than two years.

She focused on using her pay cheques to pay off money she owed, set herself a weekly allowance and cut back on some of her spending habits. In her new book, Flanders talks about taking a shopping ban, getting rid of more than 70 per cent of her belongings, and finally understanding how to save the years that followed.

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She adds debt doesn’t make you a “bad” person, but it can hold you back to the life you actually want to live. In 2018, I joined with more than 35 Global News online readers and launched our own #NoShopping2018 challenge as a simple way to cut back on spending habits and save more money.

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Below, Flanders goes through some practical ways to cut back on credit card debt — tips that helped her pay off thousands.

Track your spending first

Before you make yourself a budget, track down everything you spend for three months. “I would encourage doing this by hand because at the end of the day it is so eye-opening,” she says. “It won’t save you a ton of money right away, but it creates an awareness of where your money is going.”

And if writing by hand doesn’t work for you, there are ton of apps that track spending habits.

Put away the credit card

It sounds easy, but it really takes commitment. For those who are used to using their credit cards for every purchase, it may get difficult to start relying on your debit card or cash.

“I had to learn how to live off my cash and on my actual income,” she says. “If you’re spending with cash, you shouldn’t be able to go over into more debt [unless you have an overdraft].”
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Sell things you don’t use

This doesn’t mean getting rid of everything in your home to pay off your debt, but Flanders says look at the things you don’t use or have space for and see if you can sell them.

READ MORE: A simple way to save money in 2018? Stop shopping

“I remember an old laptop I held onto in case the other one died and if you can get $50 to a couple of hundreds of dollars for those items, sell those things.”

Budget the right way

It’s easy to throw some numbers onto a spreadsheet and call it your budget, but Flanders says unless you know what your spending habits are, there’s no reason to make up a budget.

READ MORE: How to save money on groceries every month

“I didn’t write my first budget until I tracked my spending habits for three months,” she says. She adds if you create a budget before tracking your habits, you will end up over-spending in a majority of your categories.

Earn more

Now this doesn’t mean anyone should take on a whole new job on top of their full-time job, but Flanders says in 2018, it is possible to find quick projects or temporary work opportunities. For her, she began freelance writing and collecting a couple of hundred bucks every month — all that went into paying off her debt.

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Find someone you trust

“It is important to have someone hold you accountable,” she said. “A friend or family member you can talk about money with.”

Make sure this person doesn’t sway you to spend or break your saving habits. Money is not an easy subject to talk about, she adds, especially if you’re in debt. Avoid people who enable you and make sure the person you are open with is up to date with where you are.

If you want to join this no shopping challenge for 2018, join national online journalist Arti Patel on Twitter with the hashtag #noshopping2018.

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