skip to Main Content
(971) 238 - 8033 mary@marycecilia.com PO Box 102 Kekaha, HI 96752
Debt eats your dollars

My husband and I are living the dream.  We live and work in Kauai, HI and we are not retired millionaires.  At least, not yet. And we don’t have any debt.

How do we do it? We pay ourselves, not banks.

We can hike or swim with gorgeous views nearly any weekend we choose. It is a blessing to have paradise so accessible.

Although, living in Kekaha, HI in Kauai county is 47% more expensive than the average US city, but my husband and I have been living better than we have anywhere since applying the Dave Ramsey budgeting method using everydollar. It has allowed us to stay on the island despite the cost of living challenges.

Of course our situation is unique, but in most cases, these budgeting principles can apply to anyone living anywhere.

I will be open and honest about our advantages and how we ended up here, but smart decisions certainly led the way.  First of all my husband and I have marketable skill sets even though we’ve spent many years teaching yoga for a living. I have a degree in accounting and have an above average proficiency in the field.  And my husband is an avid reader and studies until he masters what he learns. He has taught himself web design and SEO and started his own business last year after spending some time exploring his interests and talents.  

Another advantage of Hawaii is that all employers are required to pay for their employee’s health insurance if they work more than 19 hours per week.  This keeps medical costs below the US average.  If you work for a great company, they may even cover your spouse with little to zero cost to you. This is a marvelous personal benefit.

Since my husband works from home and we live on a small island, we can share a car. Also, when we need to move separately, the Kauai Bus is an affordable option. That makes our transportation costs lower than the US average.

The disadvantage the is the cost of housing and everything else, more than 2 times higher than the US Average.

I am earning a basic salary as a staff accountant and my husband is able to take home a modest amount from his business. This is enough to invest in his personal expenses and some extra perks like eating out or Starbucks.  

But the biggest advantage we have is no debt and that makes all the difference in the world.  

We are saving for future investments, possibly an additional vehicle or a down payment on a condo or small house.  We’ve put aside a payment every month in savings that earns a bit of interest. Plus we have a savings funds for medical, car maintenance, insurance, registration etc.  And a separate emergency savings we don’t touch. This consists of 4 months of expenses that sits in an account that earns an even higher rate of interest. With this method, inspired by Dave Ramsey, we are free of any debt including emergency credit card debt.  

We live off of 80% of our take home pay and save 20% for expenses that happen within the year including longer-term investments.  For example, I don’t need contact lenses, but I like to have them. They are a big expense every year, about $300+ with the help of supplemental insurance.  Since that level of expense would affect our regular monthly budget, I instead put aside $25/mo to cover that expense when it comes. I don’t have to put it on a credit card and I can comfortably pay it without hesitation or stress. I do the same with dental and even though we don’t go to the doctor, we might, so I put aside something for co-pays if we need to suddenly visit a doctor.  Yes, life can bring unexpected expenses, but they don’t have to be paid with credit cards.

Making a planned budget gives you an opportunity to ask yourself, what is most important this month?  

Are there gifts and events you want to contribute to? Are there places you want to go? Do you need to add additional funds to your fun budget for that trip?  If you do that, what are you willing to do less of?

My husband and I plan together. Because of this we make mindful decisions. We also have a shared vision for our life, so it makes sense that we would plan our money together too. Don’t get me wrong, we too are sometimes pulled by the sparkly shiny new things that suddenly appear during our shopping trips. But we have made it a habit to discuss and wait before we buy.

After planning for fixed expenses like housing, utilities, food, daycare, you find there isn’t anything left, it is time to think about how you can raise your income or supplement your income.  I can’t emphasize enough, supplementing with credit cards is not the answer. It will make your life harder in the end. Even if you are able to pay off your credit cards each month, being 1 month behind on expenses and having payments eat up your freedom to choose how to direct your money, is stressful and uninspiring.  Each month you can decide, this is where my dollars go, you decide, not the banks.

Directing your money each month is one of the most empowering things you can do for yourself and your family.

Depression sets in when you feel trapped.  When it comes to the banks, society has willingly trap themselves in debt.  The average credit card debt in America is $5,331 per person.

Making savings payments rather than debt payments will bring you financial freedom.  Money is a tool and will certainly brings happiness. Is money everything you need? Of course not, but it will support you to build a meaningful life.  If you are not in a financial position to save and are deeply in debt, invest your time in Dave Ramsey’s Total Money Makeover. It will add so much value to your life. It is never too late to start.

This Post Has One Comment

Comments are closed.