How to Pay off Debt Quickly in 2021 (2 Strategies)

Debt sucks. Nobody likes debt except bankers. Payments take away from your ability to do what you want!

How am I supposed to splurge on chocolate milk if I have collectors knocking at my door?

There are major two schools of thought on paying off debt and we’ll look at them here. If you’re more of a video learner, check out the video I posted this morning on my YouTube channel!

Method 1: Highest Interest Rate First

The first school teaches that to make the most sense, you should line up your loans from highest to lowest in interest rate and then pay off the highest interest rate loans first and move down the line. This’ll get rid of the loans that will cost you the most in the long run. 

This shows debts lined up largest to smallest in interest rate. Minimum payments are made on all debts except the highest interest rate loan. All extra income is put towards that loan’s principal.

Obviously you pay the minimum on the rest of your loans as you pay down the highest interest rate loan. This is method is more mathematically based.

Method 2: Lowest Principal First (The Debt Snowball)

The second school teaches the method that is more momentum based. It’s called the debt snowball method. 

Did you ever play in the snow as kids and make your own snowman?

I suppose this example might exclude you Southerners..

You take a small snowball, rolling it across the lawn (picking up every sad autumn leaf) until it gets big enough for the snowman’s body? It works because as you roll it, the snowball picks up more and more snow, making it get bigger and bigger.

The debt snowball works just like this. 

Line up the debts you have smallest to largest regardless of interest rate. EVERYTHING not including your mortgage (because this goes in Baby Step 6). We’re talking phones, credit cards, bank loans, student loans, car loans, cat loans, whatever. Then you’re going to pay the minimum on each debt every month. 

Anything left over (and I mean anything) is going to go straight to paying off that smallest debt. If you find a dollar at the office, that goes to paying off your smallest debt.

Here we can see the debts lined up in order of smallest to largest. Minimums are paid on each but all extra money is placed on smallest loan.

Once you get that paid off, you move onto the next one. This time you’ll have more money to throw at the second smallest debt because you’ve already paid off the smallest. 

Here the smallest loan is paid off and then all extra money, including what was being used for the smallest loan (credit card), is then used on paying down the second smallest loan (car).

Once you get that paid off, you move to the third smallest debt and take the money you were using to pay off the first two to pay off the third. 

Similarly, after the second smallest loan is paid off, all extra money from other payments is thrown at next debt.

Each loan you pay off, you gain more momentum. It makes it easier to pay off that large loan because you’re building your cash flow up as you rid yourself of those smaller loans. Then you’re debt free!

Let’s Compare Both Methods

Method 1: The pro of the first method is that it will save you money because you’re paying off the high interest loans first. The con — it’s harder to push yourself in your debt payoff when the debt is so large that it’s hard to see past it. 

Now, as in the case of our above example with pictures, the highest interest rate loan might be the smallest loan. But in many situations, this is not the case. Sometimes the highest interest rate loan will be the largest, but it’s then that it may be more difficult to muster the motivation to pay off the largest loan first.

Method 2 (The Debt Snowball): The pro of the debt snowball is you get to build momentum through your debt payoff. It’s easier to start paying off the small debts first and continue the process. It’s motivating to get rid of a payment even if it is a small one! The con – it doesn’t get rid of the highest interest loans first necessarily. You might pay more in interest.

My Preference

Personally, I believe momentum is far more important in this case. Sure, you might save money on high interest loans but that only does you any good if you have the discipline to pay off the loan. 

And in the grand scheme of things, if you are working your butt off to pay off your debt as quickly as possible in 2021, you’re actually not going to lose that much money in interest by using the debt snowball method.

There isn’t a magic trick to paying off debt. You just have to work hard, control your spending, and hit your debt payments with all you’ve got. You signed up for it, now get rid of it.

Debt Consolidation?

What about debt consolidation? I mean, you could. It is an option and many people do benefit from it. 

Though it might help make payments less confusing and get you a lower interest rate overall, you need to get rid of your debt ASAP. Paying it off with the gazelle intensity that Dave Ramsey talks about is the best way for you to knock it out. 

When you pay off debt quickly, debt consolidation really doesn’t do you much good. For one, there might be a fee involved. Two, you might not save that much in interest given you’re paying your debt off so quickly. Three, you lose your ability to gain momentum in your debt payoff because now you have one big debt instead of many small ones.

Again, I get it, the debt snowball isn’t the mathematically correct way to do things. I am an engineer by trade so I get the math argument. 

But as Dave Ramsey says, if you were doing math, you wouldn’t be in this mess in the first place. Talk about some tough love! This applies to the vast majority of debt circumstances. I understand some situations don’t apply like with many types of medical debt when there’s no other options. 

How Do We Get Rid of Debt Faster?

Okay okay, we’re paying off debt fast and building momentum but how do we pay it off even faster? 

Get another job, snag some overtime hours, deliver groceries, drive for Uber, start a side hustle, hit the like button to help my blog. Your income is your greatest wealth building tool which means it’s also your greatest debt-destroying tool. Increase it and you have more to work with. 


This debt snowball is a proven method that Dave Ramsey teaches in order to help people get out of debt and it’s what we’re taught as financial coaches. And millions have become debt free this way. Don’t take my word for it. Take the word every person who has gotten rid of their debts by this same method. 

So I pose this question to you. If you have debt, how is your debt payoff going? Which method are you using and is it working?

Comment below and let me know! I’ll respond to every one.

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Are you overwhelmed by debt and feel like there’s no way out?

I can help! I’m a financial coach trained by Ramsey Solutions to guide people in their financial lives. Set up a free consultation below and I’ll listen to your situation and guide you on the right steps forward. First session is completely free and there’s no commitment.

Money doesn’t have to be confusing. You can be the master of your own finances. But you have to start today.

7 Reasons You Need a Budget in 2021

Hello and happy Monday!

It is a happier Monday than normal given Christmas is this week!

I find a lot of people think a budget isn’t necessary for them. They’ve got things under control despite 79% of Americans living paycheck to paycheck.

So for that reason, here are 7 reasons I believe budgeting is essential for everyone! I also posted a video on this earlier today.

But here we go for the more written word focused individual.

7 Reasons You Need a Budget in 2021

1. A budget helps you be proactive instead of reactive with your money. It gives you control.

John Maxwell, a big name in the leadership world and one of my personal favorite authors, said this, 

“A budget is telling your money where to go instead of wondering where it went.”

– John Maxwell

Have you ever wondered where your money went by the end of the month? 

“No no no, that account had 4 digits in front of the decimal 2 weeks ago.”

If so, budgeting is for you! 

Budgeting is a proactive approach to your money. If you have financial goals or even just an inkling of where you want to be with your money in the future, you’d rather make those moves yourself instead of reacting to life with your money. 

Time to be in control. 

2. A budget protects your future and helps you achieve your financial goals. 

Okay, it’s debatable if this is any different from the first one but I’m counting it. 

Close your eyes, look to the future and tell me what you see. What are your retirement dreams you are envisioning?

Budgeting every month is a sure fire way to hit those goals.

3. A budget gives you freedom instead of restriction. 

I mentioned this recently but I don’t think Bailey and I would eat out much if it weren’t for our budget. I would feel guilty every time we ate out because of where that money could go otherwise. 

But since we have a budget, we are given permission to go out to eat. 

Guilt free. 

Do you feel guilty whenever you spend money? A budget will actually give you permission to spend money guilt free. Just do it responsibly. 

4. A budget keeps your money in check.

Unfortunately, finances is just a big math problem. But not one of those crazy, Jim-walked-into-the-grocery-store-and-purchased-27-watermelons math problems. 

Quite a summer party, huh Jim?

You have income, you have expenses. Your expenses MUST be equal to or less than income. Otherwise, the answer to the equation is debt and interest owed. And that is not a sustainable answer! 

A budget will help keep your money in check and help you keep the income higher than the outgo. 

5. A budget reduces stress. 

Have you ever worried you wouldn’t have enough money in your account to pay the mortgage or the credit card bill when it comes due? A budget will give you confidence there is enough money there! 

Like what I was saying about the income to expenses ratio, if you know for a fact there is more income than expenses, that’s a huge stress reliever. 

And then you can sleep better at night. It’s a lot easier to count sheep when you aren’t counting dollars.

6. A budget helps you prepare for hard times. 

2020 was one big, gigantic hard time. People getting sick, losing jobs, what a disaster! By having a budget, you’re able to prepare for those times by curbing your spending and saving more for emergencies. 

Why not ensure that you are in as good of a financial position for 2021 as possible? 

7. A budget shows your priorities (and helps you correct them). 

Zig Ziglar, a well known author, once said,

“Show me your calendar and your checkbook, and I will tell you what is most important in your life.”

– Zig Ziglar

This is the same with a budget. If you look at your budget, it will show you what’s most important to you. This might be scary and you will have to potentially deal with some shame of where you put your money. 

“We spent how much money on chocolate milk this month??”

But it’s vital you do it! Let it awaken you to change your financial ways! Let it spur you into better money habits! 

And that’s my list!

You may have a poor view of budgeting but if you can just give it a shot, I promise it will pay off. Maybe even to the tune of a million dollars if you start investing. 

So here’s my question for you: if you budget already, What are the benefits of a budget you find for yourself? Did I miss any? 

Comment below and let me know!

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I Started a You Tube Channel for Personal Finance!

Hey all! Happy Friday!

I wanted to let you know, I have now started a You Tube channel to add to the blog! Watch the first video below!

I’m really excited about this because I like making videos and I find it’s a little easier to entertain through video than through writing.

I’ll be attempting to post videos on Mondays and Fridays. We’ll be covering a lot of budgeting tips and strategies as well as all other things personal finance.

We’ll talk debt, savings, investing, and much more. This is all in an attempt to provide you more value as we move into 2021.

I uploaded a new video this morning where we break down a budget into its recommended percentages. Give it a watch and a like if you find it provides value to you!

Also, subscribe and hit that notification bell to keep up with the videos. It’s an excellent way to support me as I continue to work on content for you all.

Click here for the channel!


Here’s Why You Should Want a $0 Tax Return Too

April 15th is a bad day for paperwork (and accountants) but a lot of people seem weirdly excited for the results of tax day, don’t they?

“I’m getting a huge tax return this year so I’m going to use it on that trip to Europe I’ve been wanting to take!” I get it, I love getting a huge tax return as much as the next guy!

Here’s what’s funny. We are getting excited about a perception. We perceive that we are getting this huge payday once a year and it feels soooo good, but consider this.

The money your company withholds too much of is the equivalent of you giving the government a 0% interest loan for an entire year.

Last year we got nearly $3,000 back (partly due to some educational credits on Bailey’s part for college courses) which was sooo nice since we were preparing to purchase a house. But that was $3,000 that I could have been collecting my own interest on throughout the year.

What are you missing by not changing your withholdings?

My interest rate for my savings account is about 0.5%. This means that on $3,000, I could have earned $15 in interest (give it up for free money!). And that’s about a third of the interest rate I was looking at a year ago. Better yet, if I invested that money in a Roth IRA, I could have made somewhere between 7-12% ($210-$360) in interest. What could you do with $15? Or $210?

Are you like many people and enjoy optimizing your money? Do you use credit cards for the points you’ll earn? Do you switch bank accounts so you’ll receive an extra 0.2% return on your savings?

My point is this: optimizing your earnings by getting a higher interest rate should be no different than optimizing your withholding tax so you take home everything you can without paying anything extra to the government the following year.

A $0 tax return means you made the most of the money you have.

If you want to optimize your money, go to the HR person at your company and request some help determining how much you need saved back so your return next year is near $0. It’s not as fun on April 15th, but it’s much more fun throughout the year. I would change my taxes any day if it meant I could earn an extra $210 for doing it.

I like tax refunds so I get why people want to ensure they have a lot of money coming back to them every year. But consider what you may be missing!

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5 Simple Ways to Avoid Lifestyle Inflation

Have you ever received a job promotion or a raise and thought “Oh sweet, now we can eat out more frequently!”

I have!

Just a year ago, Bailey was in school and working very part time at a local mall. We lived frugally so we could save for a house and tuition at the same time.

When she graduated, we bought a house! Ok, quick pic because it makes blogs more interesting.

Our little fixer upper after we replaced the roof ourselves with so much help from friends. Never. Again.

And got a second income! And we dropped the tuition savings since she graduated. Suddenly our income and expenses were changing…


And that’s where lifestyle inflation kicks in. Suddenly, we had a much larger income. We increased our restaurant fund. We increased our blow funds. We increased our miscellaneous fund among many others.

Now, to be clear, we lived very frugally while Bailey was in college. Our monthly restaurant fund was literally $30. Same with our individual blow funds (fun money). I’m not saying all lifestyle inflation is bad. If we kept going the way we were going, we would have gone crazy because we didn’t spend much money on fun stuff.

What I am saying is lifestyle inflation can cause you to lose out of significant savings opportunities if you aren’t disciplined. That’s why so many lottery winners lose all their wealth within a few years. It’s tough to control your desire for bigger and better houses and cars if you suddenly have an increase in cash.

So how do you avoid this? Let’s look at some practical ways to control lifestyle inflation.

How to control lifestyle inflation when given a promotion or raise:

Here’s the video version for those less inclined to the written word!

1. Give yourself a little slack (budgeted slack).

This may seem counterintuitive but here it goes — give yourself a little, tiny bit of slack. I mean, allow yourself a little lifestyle inflation just to reward yourself for the increase. But not too much.

This could be anything from giving yourself a little more budgeted money in your restaurant fund, blow fund, or something else that’s fun.

I think giving yourself this extra little bit of flexibility will actually help you be more disciplined with the rest of your money. I talked about this in my post about blow funds.

I believe with all my heart that Bailey and I spend less money overall because we have a budgeted amount of money each of us gets to blow on literally anything each month. It helps curb our spending because we know we’re allowed to let loose just a little bit.

2. Make a budget!

Speaking of a budget in the first point, make one! Budgets don’t sound fun but they aren’t what you think. People think budgets restrict their spending and thus restrict their fun. But what people don’t realize is a budget is far more freeing because you’ll know EXACTLY what you can spend! And it gives you permission to spend it.

With a budget, you’re more likely to be responsible with how you spend the money at risk of lifestyle inflation. For one, if you get an extra $200 a month as a raise, it’s really easy to say “Well, I’ve got $200 more now. Of course I can go out to eat with my friends again!” Budget that money when you aren’t weak-willed and when temptation arises, you’ll be ready.

3. Put it towards debt!

The easiest way to control lifestyle inflation is to make the money disappear quickly before you have the chance to spend it. Do you have consumer debt? Throw that extra cash at your debt! Pay it off as fast as you possibly can and you won’t owe anyone anything. It’ll feel so good. Your income, your greatest wealth-building tool, will not be absorbed by any payments.

And that will change your financial life.

4. Start/increase your retirement savings!

This is my personal favorite. This one can be done so that you never even see that extra money. With making a budget, you have to control your desire to spend that money on frivalous things. When you’re thinking about paying off debt, you have to force yourself to send in that payment.

If you start a retirement account (Roth 401k or Roth IRA), you can immediately start saving that money before it hits your checking account. When I got my last raise, I increased my retirement savings to 15% in my 401k. That money was pulled out before I got my paycheck. Lifestyle inflation controlled.

One thing to note: I wouldn’t do this if I had consumer debt. Pay that debt off first. And don’t get any more consumer debt after that. Then get a 3-6 month emergency fund. THEN increase your savings.

5. Automate savings

Similar to the last point, set up automatic withdrawals from your checking account into a savings account. You can do this so it automatically happens every payday.

Automating your savings will help you save for the car you want (no payment!) or the house down-payment or even that big vacation you want to take without paying it off for months to come.

You can control your money

Going back to lottery winners, those who blow their wealth always regret it. You may be given a much smaller increase in income but I’m confident you want to avoid any regret when it comes to your money.

What are you going to do with that next promotion or raise? I want to hear from you in the comments below!

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Myth-Busting: Here’s How Tax Brackets Actually Work

Happy Monday!

What am I saying, I’ve got a huge project due at work today. Well, I hope you are having a happy Monday.

Regardless, thanks for joining me. I don’t take a single reader or follower for granted.

Alright, let’s talk money myths. Last year, my cousin and I were talking about money while we were playing tennis. Naturally. My cousin is financially savvy, very in-the-know when it comes to money speak.

Taxes came up and she mentioned that she and her husband were trying to keep their income below a certain point to avoid the bump in overall taxes. She said they didn’t want to make less money just because they entered a higher tax bracket. I was confused because that’s not how tax brackets work.

This was a simple misunderstanding, certainly nothing against her. But if a financially savvy individual doesn’t understand how tax brackets work, how many other people is it incredibly confusing to?

Let’s break down tax brackets

Alright, let’s do this!

Tax brackets are broken down into levels of income and corresponding percentages paid in tax to the federal government. There are more categories than this but we’ll show the most common, single or married and filing jointly.

Single Filer Tax Bracket
Married Filing Jointly Tax Bracket

Here’s the myth

Now that you have the IRS tax brackets for 2020 in front of you, it’ll be easier to understand what I’m talking about. Here’s the myth that many people including my cousin believe.

Myth: If I’m married and filing jointly, we’ll be paying 22% in taxes instead of 12% if we make even $1 more than $80,250.

If this couple made $80,250, the myth would say that this couple would pay $9630 in taxes (12% of $80,250). This would leave them with $70,620. And if they made $80,500, they would pay $17,710 (22% of $80,500). This would leave them with $62,790.

If this were the case, you can understand why this couple would want to avoid the extra $250 of earning. It would save them $8080 in taxes and come home with more money, clearly worth losing the $250 of extra income!

Here’s the bust

Here’s how it actually works. Let’s take the same couple making $80,500.

First they would pay 10% of the first $19,750. That’s $1975.

Next they would pay 12% of the amount over $19,751 but under $80,250. That range is $60,499.

That means they would pay 12% of $60,499. That’s $7260.

Then they would pay 22% of anything over $80,251 but under $171,050. Since they make $80,500, we only care about the $249 over $80,251.

So they would pay 22% of $249. That’s $55.

Given their income, they fit into the 22% tax bracket but they don’t pay 22% on their full income.

To figure out their final tax bill, we take the $1975 from the 10% bracket, the $7260 from the 12% bracket, and the $55 from the 22% bracket and add them together.

They would owe the IRS $1975 + $7260 + $55 = $9290

I hope you now understand how relatively simple tax brackets really are! And I hope you won’t worry about making more money because you won’t lose more money in taxes than your increase in income.

In the case of our lovely couple, their last $249 was taxed at a higher rate of 22%, but they still came away with $194 more after tax than they would have if they didn’t make that extra money!

Long story short, if you get the opportunity to make more money, do it. You won’t come out financially any worse than if you didn’t.

The 7-Step System Proven to Financially Set You Free

Today, I’m going to share with you something about which I’m very passionate! When it comes to helping people get out of debt and get ahead with their money, it’s hard to beat the Baby Steps.

What are the Baby Steps you ask? It’s what millions of people worldwide will attest to helping them get control of their money. It’s what Dave Ramsey put together about 25 years ago as he worked his way out of financial ruin.

Here’s the video version for those more inclined to the spoken word!

It’s what my wife and I have been following for the three years of our marriage. And it works.

Now, without wasting time, let’s get an overview of the Baby Steps to start! Then we’ll go a little more in depth on each one.

The 7 Baby Steps

Baby Step 1: Save $1,000 in a beginner emergency fund.

Emergencies are a part of life, whether we like it or not (we don’t)! That’s why you need an emergency fund! You’re going to start out with $1,000. It might not seem like much but it will just be enough to get you by while you pay off your debt. Don’t freak out. Keep your pants on till step 3 at least.

Baby Step 2: Pay off all debt except for the house.

This is where your wild comes out! You’re going to pay off debt like there’s no tomorrow.

Or, uh, like there is a tomorrow and a collector is going to call you..

Anyway, the point of this step is to rid yourself of all non-mortgage debt. That means everything. How are you going to do it? Use the debt snowball.

The Debt Snowball

This is where you pay the minimums on all the debts you have except for the smallest one. Then you put all you possibly can towards paying off that smallest debt. Once that’s gone, you do the same with the next smallest one. When that’s gone, you do it on the next one.

It might not be the best way to pay off debt mathematically, but it will help you gain momentum which is what we care most about. Most people would think they should pay off the highest interest rate debt first. Ultimately, it’s up to you, but if you stick to the debt snowball, you will gain momentum and will knock it out. People do it all the time.

Baby Step 3: Save 3-6 months of expenses for emergencies.

This is where your finances get just a tad more comfortable! You already have your $1,000 emergency fund (presuming there wasn’t an emergency that happened within the last paragraph). Now just expand it to 3-6 months!

Make sure you don’t get confused here — it’s not 3-6 months of incomes, just expenses. Calculate your expenses for a month and just multiply it by 3 or 6. Now, this is going to depend more on you and your comfort level. Do you have consistent income or inconsistent income? Do you have a high or low risk tolerance? Choose how many months you want covered based on that.

Make sure you save this fund into a place you can get to it quickly. That means no investing with it. Just throw it in a high yield savings account and watch it grow slowly but surely.

Baby Step 4: Save 15 % of your income for retirement.

Did someone say retirement? Travel?

This step takes some extra self discipline because you have to be willing to give up a good chunk of your money to ensure you don’t have nothing in the future.

Wherever you work, go to your HR representative and ask about a retirement account. Most employers have them. If they offer an employer match, make sure you take advantage of it!

One thing to note: You want to be putting your retirement money into a tax-favored account. That means putting it into a Roth 401(k) and a Roth IRA. These will allow you to pay taxes on the money you contribute now, and then, when you retire, you’ll be able to withdraw the money plus all the growth at no tax rate.

Baby Step 5: Save for college for your children.

Some parents like to ensure their child never has any debt. Other parents find they prefer to teach their child the value of money by making them pay for everything in college. My parents did somewhat of a hybrid. It’s completely up to you.

Baby Step 6: Pay off the house early.

Don’t wait till the end of the mortgage! Throw some extra payments on that now as you are able. Make sure it goes straight to the principle. This will be your last EVER debt!

I am so unbelievably excited to pay off our house early. It’ll still be a while but I am motivated.

Also, just so you know, Baby Steps 4, 5, and 6 are to be completed simultaneously.

Baby Step 7: Build wealth and give.

Continue what you’re doing except now you can add more money into that retirement account! Maybe you want to start investing in real estate. Now’s the time!

And most importantly, give outrageously. Generous people are attractive people.

Do the Baby Steps Work?

Absolutely. They have worked for millions of people.

Here’s why I like the Baby Steps. Out in the world are gobs of people trying to help you hack your life financially. They’ll tell you about credit card churning, traveling on credit card points, etc. just to make a little extra cash. I like the Baby Steps because it’s simple. There are no if’s and’s or but’s. It works the same way for everyone, regardless of life circumstance, salary, etc.

And it’s a proven method that will work for you too.

Why a Self-Proclaimed Money Nerd Doesn’t Use Credit Cards

I’ve been asked on a few occasions why I don’t use credit cards.

“I mean, you get points and cash back and if you pay it off, it isn’t a problem, right?”

Yes, true! I love rewards. I sign up for a lot of rewards programs to take advantage of saving money. And there are some tempting benefits to credit cards.

Here is the video version for those less inclined to the written word!

Credit Card Pros

  1. Security: Credit cards have great security. If your card number is stolen and illegal purchases were made without you knowing, all it takes is a call to the credit card company to have it taken off your account. They’ll send you a new card and you’ll still have access to your money in your bank account.
  2. Credit: Credit cards give you the opportunity to build credit so it’s easier to get loans if you need them.
  3. Rewards: Credit cards allow you to get rewards on the money you spend on a regular basis whether that is through cash back or airline points.
  4. Insurance: Credit cards can give you an extra layer of insurance on items you buy. Some provide some extra comprehensive insurance on a rental car, or maybe theft protection of items purchased in the last 90 days.

So why don’t I want to take advantage of these benefits? Do I just not see how I could make credit cards work for me?

I can see it. I really can. I’m so aware of my financial status, I could easily make the benefits work for me and make me more money.

Let’s get into why.

The Dreaded Cons

The credit card is a product. In 2019, the average American’s credit card balance was $6,194. And just this year, the average credit card interest rate was 15.78%.

That means the credit card companies are making billions upon billions of dollars from people who can’t afford to use credit cards.

Credit cards are heavily marketed in America. It’s pretty clear why. The companies make a ton of money off people who can’t pay them off every month.

I think everyone uses the excuse that credit cards are okay because you can just pay them off every month. But statistics show real life looks different than intentions.

Here’s Why I Don’t Use Credit Cards

I love talking money with people so much that I got training to be a financial coach from Ramsey Solutions. I want other people to enjoy the freedom of no debt.

The reason I don’t use credit cards is because I want to show people that they can live without them. Those who come to me for financial coaching are more likely to be those who need to quit using credit cards entirely to get their financial lives back in shape.

Those stats I showed above? People who need financial coaching are the ones paying over 15% in interest on their credit cards. Sure, credit cards carry some great benefits, but not for these people.

And I can’t in good conscience use credit cards while I tell other they shouldn’t. I can’t do it.

I don’t want someone who is deeply entrenched in credit card debt to say, “Well, Caleb uses credit cards and pays it off every month. I can do it too.”

I want them to say, “Caleb is proof I don’t have to use credit cards any more and he can support me in that decision.” That’s why part of Dave Ramsey’s baby steps involves cutting up the credit cards and never using them again. Credit cards are designed to make money for corporations, not you. So I want to support people who need to do this by not using credit cards myself.

Some Other Benefits to Ditching the Credit Cards

Personally, I’ve found a couple other reasons I don’t need to use a credit card.

  1. Debit cards have similar security measures. I am on our checking account fairly frequently. If there is a fraudulent purchase, all I have to do is inform the bank as soon as I see it and they will take care of refunding me that money and sending me a new debit card.
  2. I don’t need credit. I don’t like payments at all so I have committed to paying for everything with cash from here on out. Contrary to popular opinion, you actually don’t need credit to purchase a house. If you go with a company that does manual underwriting (like Churchill Mortgage), you can still obtain a mortgage with a great interest rate, no credit needed.
  3. I find it is far easier for me to track my finances just based on using a debit card. I never have to wonder if I have enough money in my bank account to pay for my credit card bill because every time I purchase anything, that money is take straight out of my account. Seriously. I have to legitimately live below my means because if I don’t, I run out of money. I’m much more careful that way.

I Understand Why People Like Credit Cards but…

There are some nice benefits on the surface. I just can’t justify it myself with the type of financial help I want to provide to people.

I honestly don’t have a problem with people using credit cards. People will do what people will do. That doesn’t mean I wouldn’t encourage someone to get rid of credit cards if I had the chance. In fact, if I ever coach you in your finances, you can bet I’ll encourage you to cut them up. But money is such a sensitive topic, I don’t want to push people away because I’m giving them unsolicited advice on credit card use.

And I know that not everyone is the same. Many people pay for food on credit cards because they don’t have the money to pay for it any other way. If that’s you, please please please fill out this form below so we can talk about your situation. I promise to give you hope.

Do you use credit cards? Why or why not? I want to hear from you in the comments below!

What are you going to NOT buy today?

What are you not going to purchase today? I want to know in the comments!

Black Friday is all about spending money and getting killer deals. I love me a good killer deal. I’ll probably get some today to be honest.

And by all means, get some Christmas shopping done or pick up that item you’ve been eyeing for a while. Just don’t go buy stuff for the sake of buying stuff.

I fear that many people are just like me in that it is so easy to make excuses for purchasing things when there are good deals. Black Friday is a PERFECT excuse for a spender like me. Though I’m more of an online shopper than an in-store one.

Amazon Prime, yo. ✌🏻

Regardless, if something is a good deal, it doesn’t mean you have to purchase it. We don’t want to steal from our future by frivolously spending money now. 

If you are going to buy something today, go for it, but be intentional about it. Don’t make an impulse decision!

Now, tell me what you didn’t buy! Personally, I did not buy some new tennis shoes even though my current pair are wearing out. Let me know in the comments down below!

How to Break Down a Budget so it’s Simple

Budgets are daunting if you aren’t a numbers person. Just getting it set up for the first time is challenging. How are you supposed to know how much money to put into each category? What’s the “responsible” percentages? How to adult?

11 Hilarious Memes About Adulting and Money

Below is a breakdown. 

  • 10% in Giving
  • 10% in Saving 
  • 25% in Housing 
  • 5-10% in Utilities
  • 10-15% in Food
  • 10% in Transportation 
  • 5-10% in Medical/Health
  • 10-25% in Insurance
  • 5-10% in Personal
  • 5-10% in Recreation
  • 5-10% in Miscellaneous

Now, of course, these aren’t perfect for everyone. These are recommended percentages straight from Ramsey Solutions based on research and experience. Percentages are going to be different based on your situation. 

If you have a higher than average salary, some of your categories are going to be much smaller! Like food in particular.

These percentages are a great place to start. Get started budgeting today and break down your spending into these categories. See what percentage you’re putting into each per month. How are you going to have to change your finances in order to hit these targets? 

Here’s the video version for those more inclined to the spoken word!

Let’s look at an example

Let’s pretend you make $50,000 per year. After taxes, you would have about $3300 left per month. Let’s break this down so you can see exactly where you’d be at.

Giving: $330

Whether it is 10% of your pre-tax or your post-tax income, what organizations are doing important work in your eyes that you want to give to? Personally, Bailey and I are Christians and give to our church because we believe in it’s mission.

Giving is important because this is how you keep a healthy perspective of money. I know for me, it keeps my greed in check and reminds me that I’m merely a manager of the money I have.

Saving: $330

Ultimately, we want to get to a higher savings rate than 10%. This is a healthy start, though. Keep in mind, the goal is to hit 15% in saving for retirement. But if you aren’t used to saving, 10% is a great way to get you to that fully funded 3-6 month emergency fund.

Housing: $825

This means keep rent below this if you live in an apartment or a house. Or it means keep your mortgage payment at or below this including property taxes. We’ll cover insurance in a minute.

Utilities: $165-$330

Get your electric, gas, sewer, garbage and water below this all together!

Food: $330-495

Food is an important one and here’s why. Most people spend way too much on food!

People go to the grocery store with no plan, buy things they didn’t plan to buy, get name brand items when generic is almost identical, AND spend far too much eating out.

Food is a simple section of the budget where money can almost vanish without you realizing it. Keep your food budget in check!

Transportation: $330

This will include anything from gasoline to maintenance on your car(s).

For transportation, Bailey and I have two lines. One for gas and one for car maintenance. Maintenance is hard to factor in since it’s not a consistent monthly expense (some months, we spend absolutely nothing on maintenance even though our cars are 180k+ miles). However, if you start a sinking fund for maintenance, it’ll be ready to go when your car isn’t!

Health/Medical: $165 – $330

You’re going to get sick and bad things will happen so be prepared! Of course, insurance does take care of a lot of health and medical things, but you still need to pay for anything from doctor’s visits to medications to deductibles to bandaids. Maybe even bandaids with Olaf on them.

Insurance: $330 – $825

So much insurance!

Home insurance, renter’s insurance, auto insurance, life insurance, health insurance, identity theft coverage – it all counts. Shop around. Get an insurance broker who can shop around for you. They know the industry and can find the best rates while comparing all your options.

Personal: $165 – $330

This is Bailey’s and my favorite section of the budget. We call it the blow funds. I wrote about this recently and you can read it here.

What I love about the blow fund is it is designed to give you some flexibility in your budget. I am convinced that we spend less money on frivolous things because we have blow funds. Then we keep ourselves to a certain amount of personal money instead of spending far more money on a bunch of little justifications.

Make a personal category and let yourself splurge a little each month. Just don’t go overboard!

Recreation: $165 – $330

Here’s the section for any of those entertainment items like clubs, concerts or going to the movies. Though, you might be saving a little money in this category with current Covid restrictions!

Miscellaneous: $165 – $330

Last one. This is for all the miscellaneous items that come up throughout the month. For example, our dog, Jack’s collar broke and we have to purchase a new one! Or we need paint for repainting our living room.

How was I not expecting that?

Regardless, this all goes into miscellaneous. Plus, then it won’t screw up any of my other categories.

Wait! Before you make your new budget!

Here are a couple very important things.

  1. This did not include paying off debt.
  2. This is only a guideline.

If you are in debt, I recommend paying it off as quickly as possible. This means sacrificing some serious money in a lot of those above categories so you can make some progress on your debt payoff.

Check out Dave Ramsey’s Baby Steps in order to get some good direction on paying off debt and getting ahead financially.

Remember, this percentage breakdown is a guideline.

Not everyone’s percentages are going to be the same. Personally, our savings rate is a little higher because we’re preparing for some big home renovation projects coming down the line.

Also, remember you have to make your percentages add up to 100%. If you take the higher number from all of those category ranges, you’ll be over 100% and that’s a good way to go further into debt!

Budget is important. Don’t put it off.

The important thing is start budgeting today! A positive view of money starts with telling it where to go versus wondering where it went. There are lots of great apps you can use for a budget. Check out some that I think are great options here.

If you find you need more help getting your finances in order or even just getting a start on budgeting, shoot me an email at or sign up for a free call below. I’ll coach you through paying off debt and making an effective budget! First session is always free. Start today, don’t way till tomorrow. ⁣

So how’s your budget looking? Are your percentages in the right place? Do you even have a budget? If you are in need of budgeting help, I’m happy to do a free budget review. Just contact me through my website and we’ll start getting you on the right track.