It’s time for another Q&A with one of our personal finance favorites, and this week we’re talking about building smart money habits with Amanda Krill from Mom vs Debt. Amanda is showing us how it’s done – not only did she tackle a crippling consumer debt on her own, she’s got some great advice if you have nieces, nephews, or someday soon kiddos of you own that you want to have a good relationship with money.
Let’s dive right in.
You paid off a $64k credit card debt. Obviously, you racked that up over quite some time. What was the spark that made you realize change was needed? Was there something that pushed you towards action?
You know, you’d think that it would have taken a ton of time – but it was actually less than four years. I got to a point where I knew I was in deep, but wasn’t sure how much exactly. I figured mid-30’s or so? But when I added it all up – it totaled $64k. That realization – that I did not have a really good handle on where I was at, and that it had gotten that bad – that was the catalyst. I had to do something before it got worse. And I had to fix it before my husband found out.
You also recommend people have a budget. What do you say to people who are scared to budget or don’t think they can stick to it?
I actually just wrote a blog about this, because it’s something I still struggle with doing on a regular basis. But, it is the key to living within your means and staying away from debt. You simply have to set aside some time each week to stay on top of it. That way it doesn’t get out of control or too overwhelming.
You’re a mom. What are you doing to help them build smart money habits young?
All three of my kids have savings accounts. Any time they get money, we make them put half in savings, give some to church and they can spend the rest. They’ve made some really dumb money choices, like we are on vacation and they spend all their money on candy, and then can’t afford a nice souvenir, and they’ve learned from it. We don’t bail them out and give them extra to spend, they have to learn the lesson…and as far as I’m concerned, the younger the better.
Pretend you’re at a dinner party, and the host mentions that you have a blog about reducing your debt. You’re then asked to share with the group your best piece of money advice for the group. What do you share?
I think my number one piece of advice is that you need to make sure you really love &/or need the thing you are about to buy before you spend your hard earned money on it. And if you don’t have the money to pay cash for it, don’t buy it. If you come back in two weeks with the cash to get it, it’s yours. If it’s gone when you get there, it wasn’t meant to be.