5 ways I was able to pay off $ 40,000 and save $ 20,000 in one year

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For years, I was a private chef for celebrities, so I was incredibly lucky with the money. I did so well that Forbes wrote an article about the little culinary empire I built for myself in 2015.

However, even though I made a lot of money, I wasn’t very good at handling it. Even though I had a six-figure income for over half a decade, in 2020 I didn’t have much to show other than $ 40,000 in credit card debt.

Self-employment is volatile, and I have treated each month of gross income of $ 25,000 as if it will go on forever, which it never has. For months without work, I would charge expenses to my credit card, assuming I could pay them off when work returned. It was a never-ending cycle, and I was never able to catch up.

Like everyone else, the pandemic has changed my life. I had quit working full time as a chef about a year or two before the pandemic, and after that I had started dividing my time between writing and cooking. These two sources of income dried up in March 2020.

It forced me to do some soul-searching around my spending habits during these pre-pandemic years. I had always prioritized happiness in the moment, and long-term stability was not something I had ever envisioned. However, now that I’m over 40, it has started to sound like a topic that I should know more about.

For this reason, I started to work with a financial consultant and a coach Andi smiles. She gave me great advice on how to structure my debt repayment and build savings.

As 2020 progressed and I started to have enough freelance writing and cooking work to consider myself a paid job again, I put them into practice along with many other changes.

Although intentional and patient, I was able to make tremendous progress quickly. Since the end of 2020, I have paid off almost all of my credit card debt and amassed over $ 20,000 in savings. These are the five changes I made that made this incredible financial progress possible.

1. I learned to budget

Andi has helped me distribute the amount of money I need each month to survive and distribute the rest so that I progress in both paying off debt and accumulating savings.

Using these tips, I made simultaneous progress in building an emergency fund and paying off my credit card debt.

2. Before making a purchase, I think about it and take a break

Before any major purchase, whether necessary or frivolous, I sit with the idea for at least a month or two.

For example, I wanted a new TV because my eyes are getting old and I couldn’t easily read the subtitles on the one I had. I did some research to decide which model was the best choice last December, then bought it last February.

3. I also have a small budget for weekly fun shopping

Even though I intended to drastically cut my expenses, feeling free is imperative to me. Be able to do some impulse spending was a freedom I wanted to keep as much as possible.

Therefore, I have an ongoing weekly budget of up to $ 100 for any purchase I want to make without having to stop and consider first. It allows me to have fun without damaging my bank account.

4. I am more determined in my travels

Before the pandemic, I took a lot of travel. I love New York, but it’s too cold to live there, so I used to go there several times a year.

The pandemic made me realize how much money I spent on travel, and now I am committed to being more insightful before planning any future trips. I have traveled little this year and I appreciate the trips I take more than before.

5. I reduced my socialization expenses

I think a lot of people have realized how much they are spending on dinners, drinks, ridesharing, and other socializing-related expenses during the pandemic – I know I certainly did.

Since everything reopened, I have reduced this considerably. I only book face-to-face meetings with my closest friends and started opting for more free things to do, like spending a day at the park together.

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