My husband and I recently purchased our first home. It’s been about two months and we’re both still pinching ourselves, expecting to wake up any moment from this great dream. Only it’s not a dream. We’re now financially responsible for a mortgage and everything else that comes with being a homeowner.

While I know there are a lot of moving parts when it comes to buying a home, I can’t help but wonder where I would be right now, not just physically, but financially if I hadn’t accidentally started my debt-free journey with DebtWave Credit Counseling about four years ago. I say “accidentally” because the truth is I didn’t realize just how fragile my financial health was back then or how the decisions I was making were putting me on a path to financial ruin.

The truth is, when I first joined the team at DebtWave, I knew nothing about money. I assumed my lack of financial literacy was tied to my struggles in math class and truthfully, I had no idea what anyone else’s finances looked like. I didn’t know if having debt was normal, if living paycheck-to-paycheck was normal, or if it was normal to not know the balances of my savings or checking account.

I had never used a budget, I relied on credit cards, and I assumed that if my credit card limit was $10,000, I had the right to spend every penny. I had no idea what credit utilization ratios were let alone how it would impact my credit score. So, when I say DebtWave literally changed my life, I’m not joking.

Without the credit counselors, credit coaches, and financial education team, I may not be sitting in my house right now. To celebrate my financial wins, I want to share with you 10 money lessons I’ve learned from the team at DebtWave Credit Counseling and the San Diego Financial Literacy Center that all helped me improve my finances.

10 Ways DebtWave Improved My Finances

1. Only Use 30% Of Your Credit Limit

Four years ago, I was planning my wedding. Given that I was still operating under the mistaken belief that I could just charge wedding expenses to my credit card – all the way up to the limit – I didn’t exactly have a set budget or a plan on how to pay my credit card off. I had always heard stories about people paying credit card debt and just assumed it wouldn’t be a big deal to be in that club of paying off debt too.

My wedding budget was my credit card. So when I learned that once you use 30 percent of your credit limit, it starts to negatively affect your credit score. I went through a range of emotions, predominantly panic and anger. How come no one ever told me about this credit utilization rule?! 

I immediately started reviewing the contracts I had signed, totaled up how much I was financially responsible for thus far, and kept the remaining wedding expenses as low as possible to avoid maxing out my credit card. To help pay off what I had already charged, I started reducing other expenses in my daily life immediately.

Truthfully, I don’t even want to fully imagine what my life would look like right now if I had never learned about that credit utilization rule and just continued to charge wedding expenses on my credit cards. Now, I make sure to keep my utilization on each credit card below 30 percent, as well as my total debt across all lines of credit, under that 30 percent threshold as best I can.

2. Store Credit Cards Rarely Help You Save Money

Almost every store I shop at offers a store-branded credit card and honestly, it’s really tempting to use these store-branded credit cards as they often come with perks including free shipping, rewards points for merchandise, and exclusive cardholder-only sales. Plus, when you open a store-branded credit card you can often save as much as 30 percent off your purchase.

I used to have a plethora of store cards in my purse portfolio. But here’s the thing with store-branded credit cards. They often have higher interest rates to offset the costs of the rewards. I did the math – the reward check I got barely covered the amount I paid in interest.

Plus, store-branded credit cards are designed to encourage consumers to frequently come back to the store, which leads to even more spending. I’ve noticed that I feel pulled to shop more frequently at stores where I have a reward point system in place – especially if I am in jeopardy of losing my points or my current reward status. So, I’ve started cutting out anything that makes me feel like I must spend money – that means unsubscribing to store newsletters and reminding myself that it’s ok if I lose my diamond status with the beauty supply store. Spending $120 to keep your $30 coupon at the end of the year isn’t much of savings anyway.

3. Pay Yourself Before You Pay Your Bills

One question I always had about money: How do other people always seem to have it and I don’t?!

Well, upon further examination of my finances I started realizing that I wasn’t making any effort to save money. Once I got my paycheck and paid my bills, I used the rest of my money to go out with friends, order takeout, buy clothes, and get my hair and nails done. Once I realized that I had to make saving a priority, I changed how I spent my money.

Instead of saving whatever is leftover at the end of the month – that’s if there is something leftover – I now make an intentional effort to transfer money to my savings every time I get paid.

In other words, I pay myself first.

I also randomly transfer $20 to my savings when I remember to or if I see a social media post from a financial coach reminding me to transfer money to savings. This has helped me on my money journey in so many ways. Not only am I watching my savings balance grow, but it’s also actually making me feel less fearful when it comes to money because I know that if I encounter an emergency, I have some financial padding in my account. It’s empowering and makes me want to learn more about personal finance topics that are still foreign to me.

4. It’s Almost Impossible to Become Debt Free if You Keep Using Your Credit Cards

The idea that I wouldn’t be able to use my credit card if I enrolled in DebtWave’s debt management program terrified me initially because I’m not used to buying things exclusively with cash. Truthfully, cash makes me nervous for a variety of reasons. The biggest being, I feel rushed when I’m trying to make sure I’ve been given accurate change.

So, I did a little at-home test. I kept using my credit card for things like groceries and gas, but otherwise, I tried to not use my credit card. And guess what? My debt load didn’t seem to go down no matter how much money I threw at the credit card companies.

It seemed like there was always some new expense bubbling up and because I was throwing so much money at my creditors, I basically justified my continued use of the card. After all, I had a friend getting married and needed the plane tickets, hotel, and dress to wear. Plus, I had some car issues and had to upgrade my phone. All in the same month.

When I was unable to pay off the total balance each month that just further added up all the interest I was paying to my creditors. After a few months of seeing no progress on my debt, I realized if I ever wanted to be debt-free, I had to dramatically limit my spending – at least temporarily.

5. Money is More About Psychology Than Math

As much as I would love to excuse all my poor financial decisions on my struggles with math, that would be a lie. The truth is the math surrounding finances is fairly simple: you take your take-home pay or net income and subtract your expenses from that figure. If the remaining balance is positive, you are spending less than you are earning. If the amount is negative, you are spending more than you are earning and likely have debt.

The secret to not spending more than you earn often lies in creating a plan for how you’ll spend your money so that you can ensure more of your money goes toward things you do want, need, and desire.

And if you notice that you are spending more than you’re earning, you don’t always have to cut items in your budget. Another way to correct the math is to earn more money through a side hustle or passive income.

6. Budgets Are Your Friend

One of the many wrong beliefs I had about money was that using a budget was only for wealthy people who wanted to ensure no one was skimming a penny off the top of their account a la Office Space. But a budget is just like bowling lane bumpers; it increases your odds of hitting your financial goals dramatically compared to those who are not operating with bumpers on their lane.

Before I could even start a budget, I had to track my spending and once I did that, I realized just how much money I was spending on things that really didn’t bring me that much joy. Random purchases add up over time – even if it’s only $5. Now I am way more intentional about how my money is spent and I make sure I allocate funds to things that I really enjoy like spending more money on plant-based skincare, ordering takeout, taking meditation classes, and entertainment streaming services like HBO Max, Disney+, and Netflix.

7. Most of Us Spend Money to Impress Other People

Most of my career was spent in the public eye. This meant that I spent a lot of money getting my hair and nails done regularly and I spent a lot of money on clothes. While no one told me that I had to do all these things to keep my job, I felt pressured to look and act a certain way – even though my income didn’t exactly support the amount I was spending.

When I first began my debt-free journey, I stopped my biweekly nail appointments immediately. I knew it would be different not having this “self-care” time, but I wasn’t prepared for just how frustrated it was going to make me. Every time I looked at my naked fingernails, I was reminded about my debt, my past money mistakes, and it made me feel not so great. So, I bought a bottle of nail polish and started painting my nails myself. The color pop was enough to make me feel just as confident as I did when my nails had been professionally buffed and polished.

In other words that $7 bottle was enough to keep me going on my debt-free journey for more than three years! And in that time, I’ve realized just how many things I spent money on because I felt I had to look or act a certain way to be accepted. Now, every time I feel pressure to buy something or spend money on a particular service, I do a gut-check and ask myself if this is something I really want or need, or if this is something I want others to see that I have or experienced? If it’s the latter, I don’t buy it.

8. Almost No One Was Taught How to Spend, Save & Invest Money

When I began my debt-free journey, I didn’t know how to tell anyone I was on a debt-free journey. I was embarrassed and truthfully, I didn’t understand how everyone around me didn’t seem to have debt. I started declining dinner invitations and passed on the chance to go out dancing with my friends. It was when I said no to dancing for the third time that my friends asked me what was going on. It wasn’t my normal behavior to say no to dancing. The truth had to come out, I had racked up credit card debt and now I was working on paying it off.

Their responses shocked me. Most of my friends had credit card debt. A few of them had maxed out credit cards, one wasn’t even sure how she was going to afford the minimum payments. In other words, we all were struggling with the same debt burden, debt shame, and debt fears, but because none of us wanted to be seen as less than or stupid, we all kept these debt feelings to ourselves.

When our debt laundry was aired in the open, we all felt relief and comfort knowing we were not alone just in terms of having debt, but of never being taught how to manage our money.

Now there’s a group of us working toward the same goal of financial freedom. We support one another and check in regularly. And the kinds of things we ask one another to spend money on have changed. Instead of going out dancing at a club with a cover fee and drink minimum, we may have an at-home dance party where we get to pick the entire playlist.

9. Your Mindset Matters

If you believe your debt-free journey is going to be painful, you’re right. If you believe you’re not good with money and that you’ll never have enough, you’re right. If you believe that you’re good with money and that money is consistently and constantly finding its way to you, well, you’re also right.

How is this possible? Well, nearly 95 percent of the decisions we make every day are on a subconscious level. This means our brain is constantly looking for evidence to support what we perceive to be true. So, if we believe we are bad at money and will never have enough, our brain is going to always be on the lookout for opportunities to prove ourselves right that we’re bad at money and that we never have any.

If this sounds like you, cut yourself some slack. Like I mentioned earlier, most of us were never taught how to manage our money, let alone how to save, spend, invest, or how to use credit cards. So why do we expect ourselves to automatically know how to do all of this money management stuff? Would we expect one another to know how to perform open-heart surgery or build a house if we had never been taught before? I’m guessing no.

10. Your Relationship with Money is Always Changing

When I began my debt-free journey, I was under the impression that once my debt was paid in full, my life was going to go back to “normal.” I had plans to save money and “invest” in a Chanel handbag, I wanted to stay at luxury hotels, buy new clothes, and do whatever else my heart desired.

But now after spending all this time paying off debts that were accumulated because of handbags, hotels, and new clothes, well, I don’t want any of these things. I’ve moved into a new season of my life where now when I think about debt, I think about how every dollar of debt I accumulate takes away my energy, my feelings of security, my ability to invest in my future.

For me, my future involves expanding my family. So now when I think about charging things on my credit card, I think about the impact my debt will have on my future children and my ability to provide for them. As my kids grow up, I know my finances will have to adapt to their wants, needs, and desires, and again when they eventually leave the nest.

Interested in learning more about money? Schedule a free budget analysis with one of our certified credit counselors, review your credit report and credit score with our credit coach, or enroll in one of our free financial education programs!