22-year-old budgeting expert reveals how she paid off $17,000 in credit card debt
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A 22-year-old budget expert who paid off a staggering $17,000 in credit card debt in just two years has opened up about the clever “cash stuffing” method she used to restore her finances.
Lily W., what’s up? @lilyrnbudgets on TikTok, he started accumulating cash income in 2019 and is now also helping others save a small fortune.
While in nursing school, the 22-year-old racked up a lot of credit card debt because she didn’t have a full-time job and turned to YouTube for budgeting.
With inflation and the cost of living soaring, more than half a million people were soon turning to the nurse to teach them how to top up cash to help them keep their costs in check.
Lily W, 22, a budgeting expert who paid off $17,000 in debt in just two years, revealed how you can start saving with the cash-fill technique
To collect things, you’ll take your cash paycheck and separate it into labeled envelopes based on money allocated for spending in different areas.
Lily revealed that she starts by writing down her budget goals on a paycheck breakdown to decide how much money to put into each category.
‘When I started working… I realized very quickly, I needed [a way to control my spending]. And I found cash stuffing through YouTube,’ she said. money wise.
Cash stuffing, also known as the envelope method, is a budgeting method that has been used for several years by money experts such as Dave Ramsey.
To collect things, you’ll take your cash paycheck and separate it into labeled envelopes based on your spending dollars for different categories.
You will also do two sections for both spending and saving.
For example, if you have $200 budgeted for groceries, you’ll pull that money out of your ‘groceries’ section and bring it with you when you go shopping.
If your total is over $200, you’ll have no choice but to put the unnecessary items back on the shelf.
Lily said her top spending categories are groceries, spending for her pet, and beauty purchases like nails and hair.
She decides how much money to put into each category based on the amount she is paid and the circumstances.
Lily added that she usually puts money into her 401(k) plan at work and plans to open a Roth IRA later.
She explained that she deposits $50 into her emergency fund and personal savings every two weeks.
Elaine King, a certified financial planner in Miami, Florida, noted that paying with cash feels more straightforward than paying with a credit card because of how simple it is to tap or insert your card these days.
He added that when paying digitally, it’s not always easy to keep track of expenses.
King compared the cash-stuffing technique to putting coins in a piggy bank, saying that “you need to touch it and feel it.”
The certified financial planner explained that those just starting out with the cash-fill method should use the 50/30/20 rule: 50 percent for necessary items, 30 percent for wants, and 20 percent for financial goals.
With cost of living prices soaring, more than half a million people soon turned to Lily to teach them about cash padding to help keep their costs in check.
Many other budgets have recommended paying cash instead of a credit card because it helps you stay on track to save money instead of overspending.
One user, who goes by Kuburat, also shared that he starts by writing his budget for the month and breaking down his paycheck.
“I always tell people, go through your bank statements and see how much, say, you’ve been spending on groceries, over the last three to six months, and give yourself a comfortable amount that you know you’re not going to pay. come over,’ he added kuburat27-year-old from Canada, which began cashing in 2021.
He explained that he can always adjust his budget depending on any unforeseen situation.
The 27-year-old recommended putting any extra money into his emergency funds, if he falls short of budget.
When she started cashing in, her goal was to save $13,000, but she ended up saving much more, which helped her start her own business, ItsMissK, where she teaches others how to budget.
Kuburat explained that her savings funds plummeted when the pandemic began and made her realize how seriously she needed to start taking her budgeting.
Now everything is expensive: food, gasoline. But when he budgets… it gives him a better idea of how much he will have to set aside each time,” Kuburat told Money Wise.
Although inflation has decreased in recent months, it remains high at 7.1 percent.
As the cost of living rises, people across the country are forced to skip meals to save money.
According to consumer data firm Dunnhumby, a third of households skip meals or reduce portion sizes to save money.
The researchers found that 18 percent of the 2,000 survey participants noted that they were not getting enough food to eat.
Kuburat explained that her savings funds plummeted when the pandemic began and made her realize how seriously she needed to start taking her budgeting.
Additionally, 31 percent of households have reduced their portion sizes due to empty pantries as a result of rising grocery store prices.
In addition to food costs, millions of people across the country lack a financial safety net.
According to the researchers, 64 percent of the participants admitted that they would not be able to raise $400 in an emergency.
Many have suffered due to inflation, which has caused prices of basic commodities to soar, including meat and poultry prices, which rose 10.4%, grains, 15.1%, and fruits and vegetables, 8.1%. .
Gasoline prices are another pressure point for many people across the country, rising nearly 60 percent over the past year, with the cost of airfare more than 34 percent and the price of cars used more than 7 percent.
Clothing costs increased 5.2 percent, general housing costs increased 5.5 percent and delivery services increased 14.4 percent.
Whether you go for the cash-fill technique or not, King recommended that everyone find small ways to cut spending in whatever way they can, like taking public transportation or buying groceries in bulk and splitting the costs with friends.
“I think the message here is that planning works,” he said.
And while you may find it easier to simply tap your card when you shop, using money has been shown to help you spend less.
A 2001 study by MIT showed that consumers spend up to 100 percent more when they pay with credit instead of cash.
In 2018, research reported that Americans still spend up to 83% more when paying with credit.
And the reason many recommend using cash is because it’s so easy to overspend when using a credit card, unlike cash because you can only use the amount you have on hand.
King suggests using your credit card for fixed expenses, including monthly cell phone bills or key payments.
She points out that you need to be careful when it comes to other purchases.
‘The sky is the limit. You could really go above your means,” she said.
In the past, undercover rachel37-year-old from Massachusetts shared her money-saving tips that helped her retire at age 36.
She revealed that she followed the four percent rule, which sees her never spend more than four percent of her assets in any given year, in an attempt to live her life to the fullest, and invested in low-cost index funds.
Dyana King, 30, of Arkansas, shared that six years ago she was saddled with $34,907 in debt and snowballed to pay it all off.
The snowball method is the practice of listing all the debts you owe and paying off the smallest debt first before working to pay off the next smallest debt.
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