Sydney’s Family Paid off $15k of Debt in Six Months

When Sydney and her husband faced a year and a half without income, they did what they had to do to support themselves and their two young sons. Luckily, they had some savings, but they also leaned on their credit card. Once her husband was employed, again, Sydney was shocked to realize that they were $15,000 in credit card debt. That’s when she turned to YNAB.

Sydney said, “I actually knew about YNAB because I had a friend on Facebook that just raved about it all the time … I kept thinking, as soon as we have an income, I really want to try out this YNAB thing … I wish I would have just signed up for it back then—it would have really helped us during that period of time.”

And six months after starting YNAB? No more debt! Listen to this episode of Debt Stories to hear more:

Transcript

Jesse: Welcome, everyone. This is Episode 6 of a new YNAB podcast series: Debt Stories: Real People Beating Debt & Winning Financially.

Today’s story is a testament to the power of budgeting—and how, no matter how responsible you might already be with your money, what a difference a budget can make.

We’re about to meet Sydney. She stays home with the boys, and her husband is an accountant.

Sydney: We were always fine. We always had enough to cover our needs and put a little bit away and we didn’t really have to think about it too much. I did try to budget before YNAB, but mostly to me it just ended up being that I tried not to spend any money at all …

Jesse: And, just like any diet that’s too restrictive, when the frustration becomes too overwhelming,when it really just gets to you, well …

Sydney: I would sort of binge.

Jesse: Sydney said she’d notice something like her clothes were old and falling apart so she’d go on an $800 shopping spree.

Sydney: It wasn’t very planned out so it didn’t work super well.

Jesse: So, not bad. They were getting by and even saving a little. But when Sydney’s husband lost his job things started to turn …

Sydney: … almost a year and a half there where we were just living off of savings and then we still had all of our expenses. When it came to September 2016 and he got another job, it was like we just hadn’t been paying attention at all. We knew that things weren’t really good but we didn’t really want to look. We were about $15,000 in credit card debt. So that was, like, really depressing.

Jesse: A $15,000 credit card bill, plus interest, is no joke. But, considering that they’d gone for more than a year-and-a-half without income, it could have been much worse. Thank goodness they had savings to lean on.

Sydney: I actually knew about YNAB during that time because I had a friend on Facebook that just raved about it.

Our living expenses were fairly, it was fairly inexpensive. I kept thinking, well, as soon as we have an income I really want to try out this YNAB. Looking back, I’m like, it would have been perfect; I could have budgeted out every month and said, this is all we have for this month until, you know. So I finally signed up for the free trial, and it just made all the difference.

Jesse: As you can probably imagine, it wasn’t hard for Sydney to convince her accountant-husband that they should try out budgeting to pay off their credit card balance.

Sydney: We’re lucky that we’re like-minded in that way about our finances. He was definitely on board to just hit it hard and take care of it as soon as we could. We just went through, went down the list of our expenses and found where we could cut back. We changed our phone plan so we weren’t paying for as much data, and realized that we were still spending $500 a month eating out, which is just ridiculous now, looking back on it. It really just made us super aware of our spending habits in a way that we hadn’t been before.

It was just so nice to have things like clothes built into the budget. You know, I kind of talked about how I would binge, and it was just so nice to, kind of, have permission.

Jesse: You know what else is nice to have? A zero-balance on your credit card. And that’s exactly what Sydney’s family achieved. Her husband started his new job in September of 2016 and, by March 2017—just six months later—they’d paid off the entire 15 grand!

Sydney: It’s gone!. We hit it so hard. It was our main focus and I think focusing on it like that for any longer than that probably wouldn’t have been super healthy. But it’s just all that we thought about. You know, my husband picked up overtime and I picked up babysitting jobs and, yeah, as of March it’s paid off.

Sydney: We have some student loans now but now that we’re in the groove, we’re like we should probably work on these pretty hard too. It’s definitely changed our mindset a lot.

Jesse: What a change. A year ago, Sydney’s family spent $500 a month eating out. And now?

Sydney: I budget about $75 to $100, but it still is a little bit of a guilty pleasure.I am kind of like that.

When we were in strict pay down of that debt phase, it was nothing. It was $20, if that. I remember having a cousin come in from out of state and her wanting to go get a smoothie. And, so, took my kids with me and I ordered a medium smoothie and had them split it into three cups so that I could just pay for one smoothie.

Jesse: Talk about a shift in mindset—cutting back from $500 to less than $20 a month as they paid off their credit card, and now feeling guilty about spending under $100 per month.

Watch out, debt repayment is addictive. Now, Sydney and her husband have their sights set on paying down roughly $20,000 in student loans, although they’re factoring in quality of life, as well.

Sydney: Now we’re at birthdays; one of them is having a birthday next week and we might get two presents or something. Maybe go and do something fun that costs money as family, that type of thing. I’ve definitely let off a little bit on that stuff.

Jesse: Compared to before, they’re still spending far less at restaurants, obviously, and there’s the phone bill …

Sydney: We were probably paying 200 a month, honestly, and then it’s gone down to 150.

Jesse: Sydney also keeps an eye on their grocery spending …

Sydney: We were spending about 650 for our family of four. I like to make sure that we’re eating healthy so it’s something that I don’t want to give up too much of. I’m just grateful for the change in the mindset really.

Jesse: Their current situation is a 180-degree turn from where their family was a year ago—financially and mentally:

Sydney: I was so stressed out, and honestly when I first put everything into YNAB the first time, that didn’t help! The very first time that I saw it all written down, I was like, oh my gosh I can’t believe it. I was so stressed out and so depressed. It’s definitely a lot better. It’s just so nice to know that if I use the credit card, I automatically have the money put there to pay it off.

We tell everyone that it has revolutionized our finances. We’ve never felt so in control

Jesse: Never felt so in control. That, to counter your possible negative self talk that you’ll never be able to do this. You can, you are. You’ll get there. And you’ll also be able to say you’ve never felt so in control.

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Do You Have a Debt Story?

Wanna know what’s better than an amazing debt makeover story? Several debt makeover stories! If you’re a YNABer and you’d be willing to let Jesse interview you for a future episode, write to us at debtstories@ynab.com. In your email, include a short paragraph or a few bullets about your financial hurdles and how you overcame them.