Beating Broke

Personal Finance from the Broke Perspective

How to Combat Frugal Fatigue when Being Gazelle Intense

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My husband and I recently added up our student loan and credit card debt.  Imagine our shock when we discovered we have $58,000 in debt!  What was this debt comprised of?  It is made up of nearly $38,000 in student loans, $6,500 on a business credit card for a business that failed and $13,500 of personal credit card debt spread over two cards (the smallest balance at $1,000).  The latter debt is largely due to our current low income and some not so wise purchases.  We’ve recently become gazelle intense.  However, we’re being careful to combat frugal fatigue since we know we’ll need to live this lifestyle for quite some time.

Gazelle Intense

What a Gazelle Intense Day Looks Like for Us

At the urging of everyone around us, we began to follow Dave Ramsey.  Because we do not yet own a house but would like to in the next three to five years, we decided to become gazelle intense, as Dave Ramsey says.

What does gazelle intense look like for us?  My husband works away from the house for 10 hours a day.  After spending an hour with the kids when he comes home, he works on his dissertation and articles for publication for a few hours a night.

I stay home with the kids all day and blog, do virtual assistant work and freelance writing when the kids are napping and after they go to bed.  On the weekend, I typically leave the house for about four hours on both Saturday and Sunday to get more freelance work done.  I estimate that I am working 25 hours a week from home.  My husband is putting in another 20 hours a week at home doing work that will further his career and hopefully lead to a high paying, tenure track job in a few years.

Being Gazelle Intense Works!

Our hard work is paying off.  In just two weeks, we “found” an additional $701 to apply to our debt beyond our regular debt repayment schedule.  We found this money several ways.  First, we returned a few items we bought but hadn’t used before becoming gazelle intense.  Then, we also got an unexpected check that we put toward the debt.  We just paid off our first credit card with the lowest balance.  Next on our plan is to pay off the credit card with $6,500 within the next four weeks.

Getting Used to a New Lifestyle Takes Time

Gazelle Intense
Photo by Louis Hansel @shotsoflouis on Unsplash

As anyone who has become gazelle intense knows, there is a period of adjustment when you have to get used to the austere lifestyle that is required.  Let’s be honest—most people who have credit card debt have at least some of it because of a lack of impulse control and planning.

Was all of our credit card debt due to that?  No, we had a very low income for awhile when my husband’s graduate student teaching stipend was our only income, and we relied on credit to make ends meet.  However, we also ate out more than we needed to.  (Do you ever need to eat out?)  Our debt likely would be lower if we practiced more self-control with ourselves and our finances.  Since we weren’t stringent with ourselves then, we’re having to be now.

How to Maintain Gazelle Intensity for Months (and Years)

Gazelle intensity works with no break if you have a relatively short amount of time you must be laser focused.  If you can get your debt paid off in 12 to 18 months, you shouldn’t need a break.  However, if you’re looking at several years to pay down your debt, you will likely need to give yourself an occassional break to avoid frugal fatigue.

Take a Break After Each Debt

Because there is such an adjustment, to maintain your gazelle intensity and avoid frugal fatigue, consider rewarding yourself for each debt that you pay off or at a milestone you set.  If you have one large debt to pay off, maybe you will reward yourself for every $5,000 you pay off.

For us, since we love to eat out and now no longer eat out at all, we have decided that we will have one meal out every time we pay off a debt.  To maintain your drive, pick one thing you used to enjoy spending money on in your old, less frugal lifestyle, and commit to enjoying that activity once when you achieve your assigned goal in your debt snowball.  Keep it reasonable, less than $50, so you don’t derail your snowball, but give yourself that leeway to maintain your intensity.

Gazelle Intensity Interval Training

Another option is to do gazelle intensity interval training.  If you have a lot to pay off like we do, you may need a different strategy to keep up your motivation.  For instance, maybe you can commit to three months of intensely working and paying down your debt.  Then, you will take a break for one month.  Or, maybe you decide on an amount that you’ll pay down, and then you’ll take a break.  Maybe you decide to pay down $15,000 and then slow down in intensity for a bit. As you become invigorated again, set another goal that you’ll pay down before you rest.

Final Thoughts

Being gazelle intense definitely has rewards.  You put yourself in a painful place for an intense while until the debt is paid off.  Then, you begin to reap the rewards of all your hard work.  You can live like no one else, as Dave Ramsey says.

Yet, be careful not to become so strict with yourself that you give in to frugal fatigue and derail your debt snowball.  A small, planned out treat is often all it takes to keep you motivated and ultimately debt free.  If you’re confronting a large amount of debt, consider instead to be gazelle intense for a few months and then take a break.

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How To Prepare Your Teens to Live On Their Own

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Sure, you love your children, but there’s no doubt that raising them is expensive.  Many parents miss their kids when they move out, but they’re glad to be rid of a heavy financial obligation. . .unless the adult child moves back in.  Suddenly, aging parents may find themselves paying for Junior again, negatively affecting their finances.  One of the best ways to guard against that is to make sure Junior is ready to responsibly handle his finances when he flies the coop.

How to Prepare Your Teens to Live on Their Own

Since our son was about 12 years old, he has been eagerly anticipating moving out and living on his own when he turns 18.  We want to make sure that when he does move out (whether that’s at 18 or a year or two later), that he can live independently and sustainably.  These are some of the skills we’re working on.

How to Prepare Your Teens To Live On Their Own

There are some essential skills your child should master before moving out of the home:

Have a Strong Work Ethic

Some teens leave the nest never having worked a job or done chores around the house.  Kids who leave home without a strong work ethic are less likely to successfully transition from childhood to adulthood, meaning they have a higher chance of ending up back at home.

Teach children from the time they’re young to work for the things they want.  This becomes even more important as they reach the teen years.  Rather than just give your child $20 when she wants to head to the movies with friends, make her work for her money by doing a job around the house or helping a neighbor with a task.

Budget and Handle Money Responsibly

How to Prepare Your Teens To Live on Their Own

Many an adult child has moved back home saddled with debt from the college years.  To avoid this, in the high school years, teach your child how to budget.  Show her how you budget for the family and have her create her own budget with the money she earns from an allowance or part-time job.  Teach her to save for an emergency fund and to save for upcoming expenses.

Just as important as teaching her how to budget is to teach her how to use money responsibly.  One way to do start doing this is to give your 13 or 14 year-old child the money you would normally spend for her clothes for the season.  Let your child buy her own clothes with the money, and she will start learning how far a dollar stretches.  Another way to do this is to let her buy her own food.

Buy and Cook Food

How to Prepare Your Teens to Live on Their Own
Photo by Andy Chilton on Unsplash

When our son was 15.5 years old, we decided to give him a weekly grocery budget and let him do all of his own grocery shopping and cooking.  This has been interesting to watch.  The first few weeks, he ate too many carbs because they were cheap and he thought they would fill him up, which he quickly found to not be true.

The next few weeks, he had a meat heavy diet, which left him feeling sluggish.

The weeks after that, he started finding healthy recipes with balanced nutrition.  He did all of this with minimal input from us.  He learned by doing and experiencing.

Plus, he’s learning not only how to grocery shop wisely, but also how to meal plan and cook, essential skills for when he leaves the home.

Final Thoughts

Obviously, there are many steps to get a teen ready to leave the nest, but right now in our family, we’re focusing on these three as they seem most important for a teen to be able to successfully live on their own.

What suggestions would you add for how to prepare your teens to live on their own?

 

Should You Create Sinking Funds Before You’re Debt Free?

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You have debt. A lot of debt. And now you want to pay it off, IMMEDIATELY! You’re fired up. You’ve read financial blogs, read debt payoff gurus books, and you’re setting up your budget. Should you create sinking funds before your debt free or put all of your  money toward debt repayment?

Should You Create Sinking Funds Before You're Debt Free?

What Are Sinking Funds?

If you’re new to budgeting, sinking funds are money you put aside for irregular expenses you know will come up during the year. Let’s say you spend $1,000 each Christmas, so you decide, in January, to set aside $83 a month in your Christmas sinking fund. When December rolls around, you have all of the money you need to pay for your Christmas gifts debt free.

Create Sinking Funds Before You Pay Off Debt?
Photo by Eugene Zhyvchik on Unsplash

The Argument Against Sinking Funds

Some argue that you shouldn’t set up sinking funds until you’re debt free. What is the point of putting $83 aside for Christmas when you’re paying 15% interest on your credit card? That $83 each month would be better served if you applied it to your credit card and reduced the balance and therefore the amount you’re paying in interest. You’ll get out of debt more quickly this way.

The Flaw With This Kind of Thinking

There is one major flaw with this kind of thinking. What will you do when you need to actually pay one of these irregular expenses?

I live in Arizona, and six months of the year, my air conditioner runs night and day. During those months, my electric bill ranges from $225 to $275, depending on how warm it is outside. Then there are about two months a year in flux when the electric is $125 to $175, and, in the winter, for four months, my electric settles down to $80 a month.

My budget can’t handle such big fluctuations in our electric bill, so every month, I set aside $150 for electric. When summer comes, I have a large sinking fund to help me pay for those hot months when the electric bill will be much higher than $150. 

If I didn’t have a sinking fund, how would I pay for the high electric bill in July?

A Happy Compromise

I encourage everyone to set up sinking funds, even if you do have lots of debt. Part of getting out of debt (and staying out of debt) is changing your attitude toward money. What’s the use of putting all of your money on your debt if you have a $1,500 car repair, no money set aside, and you have to charge it and go further back in debt again? That’s not a budget roller coaster I want to be on.

But there is a compromise; if you have extra in the sinking fund after the event is over, apply that money to debt. For instance, let’s go back to the sinking fund of $1,000 at Christmas. Let’s say you’re conservative, shop the deals, and only end up spending $750 on Christmas presents. Great! Take that leftover $250 and apply it to debt. Then, in January start saving for the sinking fund again.

Sinking Funds Before Paying Off Debt?

If you’re paying down debt, make sure to create and fund sinking funds. You won’t be sorry, and you’ll be changing your attitude toward money so when you get out of debt, you stay out of debt.

Do you create and fund sinking funds each month? If not, how do you handle it when large, unplanned or irregular expenses come up?