When I first started this blog I did it with the purpose of calling myself out so I could start figuring out this whole “adulthood” thing. Since then I’ve prided myself on being transparent – like sharing my income, net worth, and publicly admitting that I’d been through a break-up.

In 2014, I had to call myself out again.

For the first time ever, I was in debt.

It was debt accrued from unexpected dental expenses. I had a couple of dental surprises pop up and needed to get a procedure not covered by insurance (surprise surprise) which then led to another procedure.

Long story short I had to get a layer of my back gums on the lower jaw removed or risk serious inflammation or worse, an infection that could quickly spread to the rest of my body. While I had an emergency fund for these occasions, it wasn’t enough to cover the full cost.

So I had to slap the remainder on a credit card and I was in debt to the tune of about $2,000. My very loud financially focused fear based ego was flipping out. Stories about how I’m a financial failure have already crept in mixed with a little bit of imposter syndrome. How could I be a money blogger if I’m in debt?

And then I remembered something important. Teachers are always students. In fact, some of the best teachers are those who had to learn something for themselves.

So instead of throwing myself a pity party or complaining about how a first world country can’t figure out how to make health and dental care more affordable, I’m going to share with how I paid off my debt after an emergency.

If you find yourself in a similar situation I hope you find this helpful. By the way, these tips also apply if you’re in debt over something not related to an emergency.

Look at the bright side and release the guilt.

I’m a silver lining kind of gal and I fervently believe everything works toward our greatest good. So what’s the bright side here? I live in a country where credit is available in the face of an emergency.

Furthermore, I live in a country where I am able to get necessary treatment period. Not everyone is so lucky.

If you are giving yourself a hard time over any debt you accrued let it go. Forgive yourself and be thankful for what that credit was able to get you. In my case it was dental treatment, in your case, it could be your rent or an awesome experience.

This is a lot more empowering and motivating than crying about it. (Though if you really do need to cry please do. I certainly did.) Getting out of debt after an emergency is what you make of it. So push through and realize that it’s not the end of the world.

Look for ways to make extra money.

The beauty of being self-employed is that you can always make more money. No one has to approve you for a raise. So come up with your next offering, brush up on your sales chops or pick up some extra clients.

This still applies if you have a regular job. Maybe there’s a skill you can charge for on the side. You could take up baby sitting or dog walking. There’s always the option to sell some of your used stuff online. You could also make money online freelance writing, using affiliate links on your blog, or even using social media.

The point is there are always opportunities to make more money.

“Money For Me” To Pay Off Debt After An Emergency

A “Money for Me” account is a concept by Kate Northrup. Essentially, every time you save money or resist the urge to spend you put that money into a savings account called “Money for Me.” At the end of the month, you can use that money however you wish.

So for example, the other day I got $10 off my CVS purchases thanks to coupons. I put those $10 in my “Money for Me” account and I can now choose to use it toward paying my debt after an emergency.

Essentially this makes the idea of “saving money” and “cutting back” way more fun. So fun that it almost becomes a game to see how much you can save to put into your “Money for Me” account.

Don’t Neglect Your Emergency Fund From Now On

I’m going to call myself out here and publicly admit that I’d gotten lazy about saving for emergencies. I fell into the “I’m running a business and I have variable income, so I can’t save as much” mentality (which by the way is completely false).

I knew I needed to prioritize my emergency savings and did my best to beef up the account. My goal was to have $5,000 in the account by the end of the following year, and I met that goal with ease.

 

 

 

For people who don’t know, who is Sarah?

Sarah Li Cain is a money story teller. She helps people change their money mindset so they can see themselves as the hero of their money story.

About ten years ago, she found herself, jobless homeless and $9,000 in debt over an ex-boyfriend. She realized she had to change her mindset about herself in order to get out of that situation. Once she made that connection and started to work on it, her bank account started growing and it hasn’t stopped since.

She started her latest project High Fiving Dollars about eight months ago. She’s sharing what she’s learned with others and it’s turned into her career. SHe also just launched her new course, Figure Out Your Spending Triggers In Two Weeks.

What exactly is a spending trigger?

A spending trigger is an emotion that causes you to spend money. More specifically, an emotional need that you try to fill by spending money.

Why do you think people don’t make the connection between emotions and money?

For most people, money is just an object, which is why they sometimes have a hard time realizing that your emotions affect what you do with your money. For many, money is a tangible thing you measure, see and touch which isn’t exactly in the same category as feelings.

What are some examples of spending triggers?

However, Sarah realized that the reason she even got herself into $9,000 of debt because she was emotionally spending money. She was trying to fill an emotional need by buying stuff. She was chasing a fantasy of the romantic relationship. Once she figured that out, it was easier to find healthier ways to release those emotions without whipping out her credit card.

Another example comes from one of Sarah Li Cain’s readers. One of her readers was resentful of her ex-husband for having cheated on her. This person has a secret bank account her husband doesn’t know about. She used this account to buy things in order to make the feeling of resentment disappear. In her case, she was trying to avoid reliving that situation.

How does self-worth play a role in spending triggers?

One common emotional spending trigger is when people try to affirm their self-worth. On the flip side, trying to affirm your lack of self-worth also causes people to spend money.

For example, I had a coaching client who had a spending problem. After working together, we realized that the reason she was spending so much money and getting herself into financial turmoil was so that she could subconsciously punish herself for being a bad mother. Of course, she wasn’t a bad mother, but she thought she was. With that thought came uncomfortable feelings she would avoid by spending money.

In Sarah’s case, she bought a bunch of CDs when she was a teenager in an effort to fit in. Her lack of self-worth at the time told her she needed to spend money to be a part of the community.

People often times get themselves into debt because they are trying to affirm their self-worth to themselves and to others.

What’s the difference between healthy spending and unhealthy spending?

According to Sarah, it all comes from knowing your boundaries and having clear guidelines as to what your values are.

Going back to her CD example, Sarah knows she has a need to connect. Instead of spending money on CDs to try and fit in. This was just putting a band-aid on the issue. A better use of the money would have been using it to take social classes so she could address her need to connect.

What can people do as they are shopping to keep their spending triggers in check?

The first step is you have to be willing to be honest with yourself. For example, if you’re tracking your spending but you’re becoming afraid of what you see, you’re never going to get out of that situation.

The reality is we all know the answers to what we ask. In Sarah’s case, she knew her boyfriend was terrible and she shouldn’t be spending money on him. She knew she was wasting money on records. However, she was afraid to find out why because she didn’t know what the next step would be.

For those who are in the middle of their healing process, what can they do as they are living their regular lives to keep their spending triggers in check?

You can’t just avoid money. It’s something we have to use every day of our lives. That’s why individuals who are beginning their healing process for emotional spending need to pay close attention when they are out shopping for things we actually need to live (food, clothing, etc.)

In this case, Sarah recommends asking yourself two questions when you’re out living. When you pick up an item ask yourself:

• Why am I purchasing this?
• Can I justify this purchase?

When you answer “Yes” or “No” to justifying it, it brings up all of your spending triggers. Because of this, it can be an effective way to stop yourself from spending unnecessary money.

When many of us are healing, we’re spending money unconsciously. The key is to start becoming mindful, even if you look like a crazy person in the middle of the store.

What advice do you have for people who are in debt and need to be more strict with their finances?

People can still spend a little bit of money even if they are in debt. One thing Sarah did was put all the change she found in a jar. She decided she could do whatever she wanted to do with that money.

It’s important to give yourself some flexibility and permission to spend some money. In my case, I use my Digit account as my fun money account.

The problem many people face with becoming too strict is that they start becoming resentful of their bank account. Even worse, many of them end up relapsing.

There’s also plenty of stuff you can do around town for cheap or for free. Not all entertainment needs to cost money.

What is one tip listeners can implement right away to improve their finances?

Take away the 1-click option on Amazon! You can also take your credit card info off of websites or the Google Chrome Autofill.

How do you make money your honey?

Sarah regularly checks her bank account and practices gratitude for the money she has every day.

 

Where to Find Sarah and Her Work

• High Fiving Dollars
• Figure Out Your Spending Triggers In Two Weeks – Sarah’s new course.
• Sarah’s Twitter
• Sarah’s Instagram
• High Fiving Dollars on Facebook

Resources Mentioned or That Add Value To This Episode

• Spenders Anonymous
• Podcast Episode 13: Interview with Jason Vitug, Author of You Only Live Once – A great podcast episode where we talk about determining financial values.
• Digit Savings Account Review– Savings account that rounds up extra money in your checking account and puts it into savings.