Many families today struggle with debt. College loans, car loans, credit cards, medical bills, mortgages, and other personal loans can easily add up to a lifestyle of struggle and stress.
Total household debt in America during the first quarter of 2018 was $13.21 trillion—the 15th consecutive quarter with an increase—according to the Federal Reserve Bank of New York.
Allison Baggerly, a teacher, blogger, and mom of two, decided in 2012, along with her husband, to show debt the door. They paid off $111,000 in just 4 and a half years on two teachers’ salaries. She is now inspiring her growing online community, Inspired Budget, to do the same.
I asked Baggerly about her journey to becoming debt-free.
The Epoch Times: When did you decide you were going to get out of debt?
Allison Baggerly: My husband and I didn’t decide that it was time to tackle all $111,000 worth of debt until we were pregnant with our first child. Anyone with a child in day care knows how expensive it can get! There was no possible way that we could afford our frivolous lifestyle, debt payments, and day care expenses all at once. Something had to change!
At the time we were sending over $1,400 to debt in minimum payments each month. And that didn’t even include our mortgage. So we buckled down, cut back on our spending, and worked to change our family’s future.
The Epoch Times: What first steps did you take to begin this process?
Ms. Baggerly: Our first step was to read “The Total Money Makeover” by Dave Ramsey. From there we followed most of his guidelines.
What I have come to learn is that every situation is unique, so we found what worked for us. That meant that we had about $3,000 in savings and then we worked our debt snowball. This method involves listing out your debts from smallest to largest. We paid our minimum payment for each debt and then paid any extra money we could to our smallest debt. Little by little we conquered our mountain and ended up debt-free in August 2016.
The Epoch Times: How would you describe this journey and its impact on your family?
Ms. Baggerly: For my husband and I it was definitely a marathon, not a sprint. There were moments when we were on fire and wanted nothing more than to be debt-free. However, I would be lying if I said we didn’t have moments when we wanted to give up.
The summer months and holidays were the hardest times. I wanted to go on vacations and it was difficult to see everyone else take fabulous family vacations. But we did our best to stay on track with our budget and debt snowball.
When it came to my children, they didn’t know any different than the lifestyle we were living. Thankfully they were both very young and still didn’t fully understand how our life might have been different than others. I knew that it would be easier to tackle our debt when our boys were young and not aware that they were “missing out” on vacations or extravagant gifts.
The Epoch Times: How have you involved your children, if at all, in discussions or decisions about getting out of debt and budgeting?
Ms. Baggerly: To be honest, we didn’t involve our children much until recently. Sometimes my kids will ask to do something that costs a lot of money. I usually respond with, “That’s not in the budget right now, maybe another time.”
I realized that they don’t really know what that means. So to help them understand, we started a contributions chart for them. Each child has contributions that they must make each day. They range from picking up toys and cleaning the dinner table to speaking in a kind voice. They are paid each week based on whether or not they were able to complete their contributions a certain number of times.
When they are paid, they must set aside part of their income for giving, saving, and spending. So now when our son asks for a new toy, he goes to his little bank and counts his money to see if he has enough spending money to buy the toy!
The Epoch Times: What has been the biggest challenge?
Ms. Baggerly: I think that the biggest challenge was learning to say no to myself when I wanted something. My husband didn’t struggle with this quite like I did. I used to love buying home decor and makeup all the time. I crave a full shopping cart at Target like a kid craves candy. I love when I buy something online and the box arrives at my house.
But I had to learn that I can have those things when I budget for them. And when we were on our journey to becoming debt-free, it meant that I rarely got those things. I had to teach myself to say no to the things that I wanted in the present moment so that we could build a better future for our family.
And let me tell you that there were times when I failed and ended up spending $200 at Target! I was certainly not perfect, but this life isn’t about being perfect. It’s about making progress!
The Epoch Times: What has been the greatest benefit of getting out of debt?
Ms. Baggerly: I have no doubt that the greatest benefit of our journey was being able to set up our family for success! To know that my kids will grow up in a home where they will be taught how to properly handle money, and see that firsthand, is wonderful.
Secondly, I have personally benefited from this journey by learning just how passionate I am about saving money, paying off debt, and teaching people how to make it happen! My full-time job is teaching, and I love that I have learned how to take my passion for teaching and my passion for finances and put them together.
I never thought that I would be the nerd that enjoys talking about how to take back control of your money, but here I am! And being able to reach people through Inspired Budget and through my story is just the icing on the cake!
The Epoch Times: What inspired you to begin sharing your journey publicly?
Ms. Baggerly: When we started our journey, I honestly had so much shame. Shame surrounding the fact that we had so much debt and shame about the fact that we didn’t even recognize that it was there!
But as I grew more and more passionate about budgeting, I knew that we couldn’t be the only family facing this mountain. So I started by talking about it with my friends and family. And after several years of talking about it with them, I’m sure I became quite annoying! That’s when a family member talked with me about the possibility of helping others. She encouraged me to reach thousands and inspire others to live a life on less.
Once that seed was planted, I couldn’t give up on it. I started Inspired Budget and began sharing as much as I could with others. I began creating printables and products to help people reach their financial goals.
The Epoch Times: What advice would you give someone who wants to get out from under debt, but feels overwhelmed by the idea?
Ms. Baggerly: Start by making a budget. A budget is the key to getting control of your finances and facing your financial truth.
When you learn how to make a budget that fits your needs, you will find extra money to be able to send to debt each month. It’s almost like magic! You don’t realize how much you are spending until you sit down, write your budget, and track your expenses. It’s worth the time and effort because I can promise you that it will end up being the pathway to your financial goals.