This week we’re sitting down with Ashley Patrick, a former police officer turned financial guru helping others to control their debt quicker and easier. She is sharing her story today with us, as well as sharing some amazing resources for planning and budgeting and I know you’re going to love it. This is a topic that we are all dealing with in rural America today and I know that it is a topic that’s going to help all of us. She is a Ramsey Solutions Master Financial Coach and owner of Budgets Made Easy. She was able to pay off $45,000 in debt in 17 months while working as a detective. Now she is able to stay at home with her three children and live the life she wants. She has been featured on Yahoo Finance, MSN, CNBC, The Penny Hoarder and many more!
In this episode you’ll learn:
- How and why Ashley got started on her paying off debt and budgeting journey
- Her tips for how you can build a budget
- Her advice for paying off your debt
Get To Know Ashley
A police officer and detective for over 10 years her and her husband ended up paying off $45,000 in debt in 17 months which allowed her to stay home when she had their third child and leave her very stressful job behind. Now she works from home over at Budgets Made Easy while caring for their children.
How She Decided to Pay Off Their Debt
Ashley and her husband took a loan out of their 401(k) in order to do some renovations to their home to prepare for their second child. However, they ended up owing the IRS quite a bit and her husband lost his job at the same time. So she put what they owed the IRS on a 0% interest credit card for 18 months but as the credit card bills began coming in she realized she didn’t know how she was going to pay off the amount on the card within 18 months.
So she started looking for debt plans and found Dave Ramsey. She started working her way to a “zero based budget” and ended up paying off all of their debt, except for the mortgage, in 17 months.
Her Advice for You
I asked Ashely what her advice is for those struggling with debt and she said it starts with a plan and the priorities in your life. Pay cash whenever you can and start reducing as much debt as you can.
Step 1: Figure out if there is anything you can sell, old equipment, do you have enough to have a yard sale, etc.
Step 2: Keep your personal finances separate from your business. If you’re working on becoming debt free then work on your personal household budget first then maybe tackle the farm side.
Step 3: The debt snowball. This is one of Ramsey’s signature lessons. You list your debts from smallest to largest and then you focus all of your energy and all of your money on paying off the smallest debt. It gives you a quick win and it gives you the motivation to keep going. Instead of trying to save and pay it all off at once focus on paying off one thing at a time. It’s much more sustainable. So once your first debt is paid off you apply that debt’s payment to the next debt you’re working on. For example, if you were paying $50 to card #1 and $30 to card #2 once you pay off card #1 the payment you would apply to card #2 would be $80.
Step 4: Plan for the year ahead and manage your priorities, what your savings goals are, what your business expenses will be, etc.
What Has Been Her Biggest Challenge?
Eating out has been a challenge, especially with 3 kids. There are just days when she’s been tired and doesn’t want to cook. She works off of a zero based budget, meaning that every dollar coming in is accounted for in one way or the other. When she originally went through what they were spending on food it was more than their mortgage payment! They would spend all of this money at the grocery, then eat out and the food at home would go bad. So she started meal planning and sticking to a grocery budget.
What is the best tool or resource to stick to your budget?
Write it down. Studies have shown that you’re more likely to achieve a goal if you actually write it out. Ashley has the Budget Planner available to make it easier to write it down and start working on it. However, if you would rather use an excel spreadsheet, budgeting app, or some other template that’s totally fine too.
What is Ashley looking forward to this year?
According to Ashley this has been a really good year for her and her family and she’s really just looking forward to that continuing. She’s really looking forward to growing her business, making more money in order to start planning for more things with her husband and family.
How to Build Your Budget
Ashley has four main categories when building your budget. Food, housing, transportation, and clothing. Then you need to take utilities, entertainment, and annual expenses (Christmas/birthday gifts) into account as well.
When you first start the best way to begin is to print the previous 1-3 months of your bank and/or credit card statements. Use highlighters for each category, food, utilities, housing, etc. Calculate your average in each category but also individual bills. What is your average electric bill? Water? Trash? etc.
Write down your income and what your fixed expenses are, set a reasonable amount for food and gas then calculate what’s left. How much is going towards debt? Towards Christmas? Towards vacation? Emergency fund? Once you calculate all of those things you’ll be able to build a budget.
Her #1 piece of advice for you is to set your priorities and have your money go towards those priorities. If your priority is saving or paying off debt, great! If your priority is traveling, that’s awesome too. Create a budget based on those priorities and then stick with it. It takes determination and dedication but it’s 100% worth it.
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