7 Things We Did to Go From House Poor to Debt Free in 3 Years
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About a year or so after we downsized our house I wrote a guest blog post for a popular financial blog. The title of the post I wrote was, “How We Went From House Poor to Debt Free in 3 Years.” If I’m being honest with myself now, I know that that post was actually really long, drawn out, and not really beneficial to anyone who wanted to get out of the same situation.
Don’t get me wrong, I got a lot of empathy from people who related to our financial slip ups. There were words of encouragement from people who seemed to have always been better with money than me. Naturally, some of the feedback was negative.
One thing that has become abundantly clear since I was bold enough to share our story: we were not alone!
It blows my mind how many comments or DMs I get from people who confide in telling me that they are struggling financially. I hear from people who bought houses they can’t afford, and people drowning in credit card debt.
That’s why instead of just sharing MY story, I want to share the steps I took to get out. My hope is that for anyone reading this, you’ll be given new ideas on how to shift your circumstances so that one day you can have a success story as well.
Acknowledge the problem.
With any problem in our life, we can’t get out of it until we acknowledge that it exists. For years and years I blamed our money problems on circumstances outside myself. It was the unexpected car repair, or the fact that we didn't make enough.
Even though I was chronically overspending, I lived by the belief that I was a victim. I deserved the occasional pick me up and it wasn’t fair that life didn’t allow me that. Meanwhile I had a closet filled with clothes, a pantry over-stuffed with super foods, and a credit card bill that didn’t have any “necessities” on it.
For years I struggled financially with only my shopping addiction. It wasn’t until I carried that addition with me into a larger home with a bigger mortgage that I could no longer turn a blind eye to the problem.
Read The Downsizing Series: 6 Mistakes That Made Us House Poor
No one really likes looking at money, right?
The main issue was simply how unsexy it was to open up my laptop and look at my bank statements. No matter what, I always got a sinking feeling in the pit of my stomach. Even worse, when I saw there was money in the account, I had this intense urge to spend it.
It wasn’t until I allowed myself to come face to face with the full load of our credit card bills, bank statements, and medical debt that I had to admit we were…drowning.
Let me note: it doesn’t feel good to recognize that you’re drowning. However, when you find that you’re going under, you have two choices:
Close your eyes and go into the fetal position and hope the current takes care of you.
Draft a strategy for swimming safety to shore, even if it’s far away.
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Get a goal that’s bigger than stuff.
The very first thing we had to do in order to spark the desire to change our life and our finances was to want something bigger. For me, that was largely realizing that my family life was slipping away because I was clinging to a big house and the possessions that came with it.
More than anything I wanted my family back. More than the house. More than the closet filled with shoes.
As soon as I gave myself a bigger, soul-lead desire, the sooner I was able to start making real financial shifts — and they happened fast!
This is why I constantly say, “…my goal with stuff is to help you have less so that you can do more with your one life.” So often I think we settle for the baby joy that comes from material things when in reality our soul craves huge, ground-breaking joy.
Reduce spending on the things that don’t matter.
Heart-lead goals are all fine and good, but they absolutely have to be backed up by practical action if you want them to ever be more than dreams, right? I didn’t just sit cross legged in a meditation pose imagining the life I wanted. Well, I guess I kind of did…
For a while, since our marriage and finances were struggling, I started reading a lot of books and watching documentaries. I started feeding my mind and soul and surrounded myself with people who were chasing their dream life. If I hadn’t done that I might not have had the AHA moment that lead me to realize I wanted to downsize our house.
Read The Downsizing Series: 6 Books and Documentaries That Inspired Our Downsizing Journey
More than just reading and watching documentaries, though, I started showing the universe I was serious about changing my life. I immediately reduced my spending. For three years, I stopped buying new clothes. Instead of filling my card with super foods, I made intentional, budget friendly choices. I even started selling off some of our furniture and other clutter.
I’ve come to learn that when we really want change, especially financial change, we have to start showing up differently. When you first start, you might not know what “different” looks like. That’s OK, just do your best. If you set your intention and actively work to take steps in the direction of where you want to go, you will most likely end up exactly what you want to be.
Let go of your ego.
As I slowly began to let go, and keep my focus set on the type of life I wanted to live, I began to see how our big house was not right for us.
Of course, when you start to realize that in order to change your life, you’re going to have to be a different person than the one you have been up until this point, there is a good chance your ego will desperately try to keep you exactly where you are. Some of the ego beliefs I had were:
People are going to think we’re poor.
People will look down on us.
What will our neighbors think if we sell.
Everyone is going to talk about this.
Will my friends still want to talk to me?
This is so embarrassing.
Notice how the majority of the fears I had about escaping our house poor lifestyle solely revolved around other people’s opinions of me.
Even still, my soul goal was bigger than my ego. It told me in no uncertain terms that it was better to course correct now than keep forcing myself down a path that was not right for me.
When you decide to course correct your life, your ego will try to force you to stay put. Be willing to let go and know that you can trust that internal knowing that there is something better for you on the other side of your comfort zone.
Downsize, declutter. Do it again.
Of course, if you want to escape a house poor, paycheck to paycheck lifestyle, the first thing to do after reducing your spending is declutter. A lot of times people see decluttering as only a space clearing procedure.
In reality, I’ve realized that when we are willing to let go of the items that aren’t serving us, we become braver and braver when it comes to letting go of the big things that aren’t serving us. (Like outdated beliefs and mindsets around money.)
Think of it like this: You are going on a new adventure. There is a lot of stuff you don’t need on this new adventure. Let go of anything that is dead weight.
Downsizing your way
One of the things I get backlash on a lot is the fact that we changed our financial future by downsizing our house. Let me be clear, we didn’t sell our house and then use the profits to pay off $20,000 of debt.
I don’t actually think we paid off any debt, because after realtor fees and all that crap, we barely made any profit. What we did we used to paint the walls of our smaller home and the rest went into savings.
I want to tell you this because I want you to know that you don’t have to have a big house to sell in order to downsize your life, or escape the house poor lifestyle. Sure, depending on your circumstances, this might be the right option, but it’s not something that will work for everyone.
By reducing your spending, simplifying your stuff, slowing your spending and following the next two steps you WILL be able to change your financial situation.
Learn what you don’t know.
The hardest part about overcoming being house poor, paying off debt, learning to invest, etc. has always been learning what I don’t know.
I mean, how can you learn what you don’t know?! If I wanted to know it, I would just know it. Ya know?
If you didn’t grow up being given financial tools and information to help you succeed in life, what are you supposed to Google? “Why am I poor?” “How do I stop being poor?” “Am I budgeting wrong?”
This isn’t like looking up how to fix a dishwasher, it’s like trying to find a book in the worlds largest book store and you don’t even know the title.
Up until this point in my life all I had known was the budgeting was restraining, shopping was fun, and being broke was normal. Learning to unlearn that was weird, it took a long time — I’m still learning. BUT, it’s doable.
If you’re struggling with feeling house poor or living paycheck to paycheck, start with some of these Google searches:
What are phantom costs?
What is lifestyle creep?
How do I pay off debt?
These are great places to start as well as finding financial podcasts and listening to them like your life depends on it. Start with my episode on the Money Love Podcast.
Do not later, rinse, repeat.
Most importantly, once you start taking the steps to get out of your financial rut, do. not. go. back.
This is tough.
I have failed many times and my ego hasn’t let me talk about it. Until now. (That’s why I created this newsletter.)
If and when you do slip up, make mistakes, and fall into old habits, don’t stress. Stand up, dust yoself off and try again. Try again.
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Want the full downsize experience?
If you are craving a simplified life, or maybe even a smaller home, I am sharing LITERALLY everything in The Downsizing Series on the paid side of my Substack.
On top of getting a few newsletter every Sunday, you’ll also receive a bonus post each Wednesday that specifically focused on parts of our downsizing journey. The good, the bad, and the super f*cking ugly. (Seeing these photos of my son again, shatters my heart all over again.)
If you want to know:
How we got into a house poor situation
The books and documentaries that inspired the simple life
All the things that went wrong as soon as we listed the house for sale
What we did to save our marriage after we downsized
All of this and more is coming to The Downsizing Series. You can preview one post for free, or sign up now and get access to all of it!