All or nothing

There’s a common (mis)conception in the personal finance field that if you have debt, you shouldn’t spend on anything beyond your needs.

No Starbucks

No shopping

No restaurants

No travel

No fun.

I consider this a misconception because this is no way to live. I’m by no means saying if you have thousands of dollars in consumer debt (credit cards), you should continue along this path. What I’m saying is if you have debt this should be a priority but one of many.

I speak from experience.

In 2012, I began my professional career with over $30,000 worth of student and vehicle debt. My job was well paying and I was making over 6 figures as a 25 year old.

My only focus during that first year was getting out of debt and I took it to the extreme. I don’t think I spent any money on myself for that first year so I could pay off this debt and “be happy”.

Cue the following few months where I was now free from debt but there was no plan. Due to my work schedule, I was usually back in Calgary for about a week a month and, not so surprisingly, you can spend a lot of money in a week if you really put your mind to it! Between shopping, food, drinks and just having good times, I realized I was spending way too much and very little was going toward future planning.

This wasn’t sustainable on many levels – no emergency fund, no money set aside for goals, and most importantly, a lifestyle that had me tied to a job.

I re-evaluated what I was doing and how I was handling my money. I figured out what was important to me and set money aside for this so I didn’t go crazy when I had the opportunity to spend. I started putting money towards an emergency fund and a TFSA.

I put some limits on my financial life, not as a punishment, but as guidance to achieve what I really wanted. This has left me feeling happy and secure with my lifestyle.

So please – don’t cut out what brings you joy to pay off your debts but come up with a plan to achieve all of it.