Financial Setbacks and How to Recover

The road to financial recovery isn’t always sunshine and roses. Matter of fact, it’s hardly ever that. It’s filled with a ton of sacrifice and discipline followed by a few moments of satisfaction when you meet your first goal. Then the never-ending cycle starts all over again and continues forever. It can get tedious and sometimes, you have setbacks.

At least that’s where I found myself last month. I mean, my setback wasn’t devastating. I didn’t have an emergency that cost hundreds or thousands of dollars or anything, but I found myself going down a path that could have been a huge blow to all the progress I’ve made. And, it all started when I had a few too many drinks.

My $30,000 Journey to Debt Freedom

Hello out there everyone. I’m super excited to start this blog and a new chapter in my life. But, along with that comes a brutally honest assessment of my finances.┬áDeep breath…

$35,379.73. Three months ago, that was my number. That’s how much I owed. $7,950 in credit card debt. $5,642.36 in student loans. And, I had just acquired a $21,787.37 auto loan. Exhale…

It was a ton of money, and my creditors had me believing it was no big deal. At least that’s the impression I got each time they increased my credit limit or offered me special interest rates. But, it was a huge deal. It was $635.84 a month worth of a huge deal. And that was me only making minimum payments, which I can’t in good conscience recommend anyone do. I needed a change.

And that’s when I came up with a plan to get rid of my debt.

$31,951.76. That’s my number now.

In a little over three months, I was able to reduce my debt by almost $3,500 and here’s some of what I’ve been doing.

How I’m Reducing My $30,000 in Debt

1. I found out where my money was going.

The first thing I did was go over my bank and credit card statements with a fine-toothed comb. It didn’t take long for me to see where my money was going. Restaurants. On average, I had been spending $20 a day on fast food and nearly $100 a week at Pappasitos and Lupe Tortilla. More than 60% of my credit card charges went to restaurants or Jamba Juice. Yikes!

My other expenses included my tithe, rent, cellphone bill, insurance premiums and minimum credit card payments. I didn’t have any lavish retail purchases or any other bad spending habits. Food was hands down my biggest expense and I needed to change that. So…