If you want to get out of debt, there’s no question that having a written budget in place is going to help you achieve that #debtfreelife much faster. Budgets don’t have to be intimidating, and they certainly don’t have to feel like a straightjacket.
I recently sat down with Sarah Wilson a.k.a. Budget Girl on how budgeting helped her pay off $33,000 of debt in three years. Her journey is documented on YouTube and I knew there was no better person to ask about budgeting than Budget Girl.
In this interview, I wanted to know:
- How to start a budget when you feel overwhelmed.
- How spending categories are used in a budget.
- How to earn extra income to pay off debt.
- What to cut from a budget when you’re paying off debt.
I got really excited when she mentioned homemade sushi with the aid of Aldi’s and the Dollar Store. Sushi on a budget make miso happy! ???
Let’s jump into it!
Sarah Wilson doing her thing as the Budget Girl. YouTube /budgetgirl
Where did you grow up?
Long Beach, Mississippi for about 18 years. I live in Texas now.
Big family or small family?
Tiny family. I was actually adopted by my grandparents. I’m close with my aunt and uncle.
What brought you out to Texas?
After graduating from Mississippi University for Women, I worked for two local papers. I moved around from Louisiana to Arkansas working in the newspaper industry before finding a job as a marketing and communications specialist with Texas A&M.
Graduation day at Mississippi University for Women. Courtesy of Budget Girl.
What’s the craziest thing you did when you were in college?
I doubt I could get in trouble for it now, but there were fallout tunnels underneath the school that my friends and I explored. We found containers of giant maxi pads. It was weird. There were a billion cockroaches and it’s covered in graffiti from former students.
I’m totally getting a Harry Potter and the Chamber of Secrets visual in my mind. Switching gears, what’s the best meal you’ve made at home on a budget?
I really like to make sushi at home. It’s not as hard you think. I just put together a video on YouTube on how to make homemade sushi. The ingredients are very affordable. We can make a huge spread of rolls for a couple of dollars. Homemade sushi is my favorite budget meal that’s luxe. I get my tempura shrimp from the Dollar Tree and imitation crab from Aldi. It’s incredibly frugal.
“Homemade sushi is my favorite budget meal that’s luxe.”
I’m making room in my grocery budget to stock up on sushi making supplies!
What are your best cheap date night ideas?
My boyfriend and I like to go to the library or the half price book store. I really enjoy that. We can spend a couple of hours in there wandering around, picking out books and reading. It’s a lot of fun.
I also like having friends over to my place. I really enjoy hosting. We’ve done taco night or a DIY potato bar. It’s a hell of a lot cheaper and a lot more fun than going out. Restaurants try to get you in and out as fast as they can, then you have to figure out where else to go. You end up spending more money that way.
For those who are interested in budgeting but feel a little overwhelmed, what advice do you have?
First of all, budgets don’t have to be intimidating. When I started this process, I had never made one, but it’s simple. A budget is making a list of expenses that you have and deciding where you want your income to go. The point is to be intentional. I spent years not knowing where my money was going. I felt like I didn’t have enough to save or pay off debt because I was letting it fly out of my wallet. As soon as I wrote down what I wanted to do with it, I was able to take control.
We manage what we monitor. If you want to manage your money, you need to track it. It’s all about having a plan. A plan can be as simple as a sheet of paper and a marker and writing at the top your income and listing out all of your expenses underneath.
“We manage what we monitor.”
Do you use a software to budget?
I do my budget in Google Sheets. It’s online, completely free and I get to customize it as much as I want. I wasn’t always a spreadsheet girl. My first budgets were on pen and paper. But I wanted to be able to access them anytime, that’s why I switched to doing them in Google Drive. I can log my receipts from anywhere, and I always have a picture of what my budget is.
Why are spending categories important inside of a budget?
Categorizing allows you see where you’re spending and where you might be going over. I tend to keep my budget very simple. Rather than saying, “Here’s all of my bills and here’s what’s left over,” the categories keep you in check. If you just pay all of your bills and you have $500 leftover for the month, you might decide to go on a shopping spree and then you don’t have enough money for groceries. When you give yourself a reasonable outline for what you want to do then you’re more setup for success.
What were the four things that you cut from your budget to achieve debt free status?
I bought clothing exclusively from clearance racks and thrift stores if I needed it. My family and I do a money envelope exchange every year instead of buying each other gifts. I bought clothes for myself from that money every year. That’s how I was able to not spend money on clothes.
I gave myself $10 per week for restaurants during my debt free journey. I could either save that up or I could blow that at Taco Bell three times a week. Taco Bell is wonderfully cheap.
Vacations were limited with one exception. At the halfway mark, I visited my college best friend, Jaimie, in California. She actually paid for my plane ticket so all I had to do was scrounge up a couple hundred dollars to eat and play with so it was a pretty frugal vacation.
I also gave up any kind of luxuries and personal pampering. I got one pedicure a year for my birthday. I cut my own hair. I didn’t spend money on anything other than drugstore beauty products and I rarely wore those.
Going on a thrift hunt for deals pays off (and saves money). Courtesy Instagram @gobudgetgirl
Groceries and eating out are big budget busters for millennials. What else have you done to make sure your food expense was kept at a minimum?
Oh man. During the three years that I was getting out of debt, I didn’t want to just eat ramen and rice and beans.
I wanted to eat well but not so well that it was going to be an excess expense. I was still buying fresh fruit and produce but I wasn’t springing for the nice goat cheese or the good coffee. I was buying Wal-Mart block cheese and Folgers coffee.
I would look up prices at an Aldi’s an hour and a half away and my Wal-Mart would price match. I would get the deals to buy much better food on a much lower budget. My food budget was $200 per month for most of my debt free journey. I was able to eat pretty well on that.
Check out what you can get at Aldi’s for under $50!
When did you start your debt free journey?
When I lost my job. After college, I thought that I was going to be making a lot more money than I was. I was blissfully unaware that journalists and reporters did not make a lot of money. I thought that I’d be making enough to pay off my student loans. I worked for a newspaper making $26,000 per year and the government said I could defer my loans, so I did. You know, that whole income-based repayment thing? I didn’t make any payments on my loans for a few years.
Eventually, I was laid off and suddenly my situation was very clear. I had $33,000 in debt, no income, and no idea how I was going to pay rent or eat. I had to apply for unemployment. I was screwed. I decided that once I got a new job that I was going to do whatever it took to get out of debt.
As soon as I got that first paycheck, I started budgeting it to the penny. I started seeing how I could earn extra money on the side to pay down my debt. It was really frustrating at first, because I was putting just the minimum payment towards my debt and my balance wasn’t going down at all because of the interest. For four months I was doing all that work and I wasn’t seeing any progress. I knew I needed to up the ante and bring in additional income or cut my expenses to see the debt go down.
“I had $33,000 in debt, no income, and no idea how I was going to pay rent or eat.”
What else did you do?
I was a secret shopper. Companies hired me to attempt to buy cigarettes at gas stations to see if they carded me. I guess I looked older or younger, I don’t know. I never got carded so the gas stations kept getting in trouble.
I trained dogs which I’m technically not qualified to do, but I’ve always been good at getting dogs to behave. I was charging $30 an hour to get the dog to behave and train the owner on how to interact with the dog.
I did pizza delivery, babysitting, house sitting, I did some online selling. I was a firework salesman a couple times during New Year’s Eve and Fourth of July.
Dog whisperer, pizza delivery gal, budget master. Don’t underestimate your talents to hustle for a dollar! Courtesy Instagram @gobudgetgirl
Damn! That’s incredible focus. So, all of the debt was from your student loans?
Every single bit of it. I had $33,000 in debt and I made $26,000 as a newspaper reporter for most of that time.
How long did it take you to become debt free?
Three years and two months.
Why did you decide to do a YouTube channel?
It was the accountability. I knew if I was going to make becoming debt free the main focus of my life, I wanted to talk about it. So, I picked up my phone one day, balanced it on a bunch of books, and I started talking about what a predicament I got myself into. It was like an online journal. I got really addicted to that community very fast. It motivated me to do better, faster.
“If I was going to make becoming debt free the main focus of my life, I wanted to talk about it.”
Budget Girl made her debut on the Dave Ramsey Show in February 2018! Courtesy of @daveramsey
Recently, you did your debt free scream on the Dave Ramsey Show. What emotions were going through your mind?
I was excited to talk to Dave and I was honored to be there. Everyone was incredibly nice at the studios. I wasn’t really nervous except that I thought my voice might crack when I yelled, “I’m debt free,” because I hadn’t practiced it.
You did phenomenal. And Dave Ramsey said you’re going to be a millionaire. That’s huge.
He understood how hard I worked. A lot of us in this community think of him as Uncle Dave and we just want to make him proud. I was proud of myself but I wanted to thank him for providing a plan that was instrumental in getting me out of debt.
Any parting words of wisdom?
No one is going to fix your money situation for you. You are the only person who cares. You are the only person who will be affected by this. If you’re scared about money right now, that’s a huge sign that you need to do something about it.
If I had just decided to pay the minimums on my student debt or kept deferring it until I made more money, I would be paying off my student loans at 40 years old. I’m now 30 and I have my entire paycheck that I can do whatever I want with. I’m able to invest for my future, I’m able to save for an emergency, and I don’t worry all the time.
There is a community out there to support you through this. You have to take responsibility for your money situation but you don’t have to go it completely alone. The debt free community will root you on and give you advice. I’ve met some absolutely wonderful people I now consider dear friends. I can’t imagine my life not having done this. I’m financially fearless now.
Check out Budget Girl’s YouTube channel. She’s going over frugal hacks, budget reports and a how-to sushi video.
Learn How to Pay Off Debt By Putting A Budget In Place