Living Life without Credit Cards

Erin Lowell hails from the great state of Maine. Her financial “awakening” happened in the summer of 2006. Spurred by growing credit card debt, Erin dug her heels in and adopted the YNAB Way.

What do you do for a living?

I am a high school chorus teacher at a large high school in southern Maine. I’ve been teaching music for about 20 years. I LOVE what I do and I LOVE working with the kids.

Describe your financial situation prior to using YNAB.

While I’ve always paid my bills on time and have excellent credit, I always felt close the financial edge. My checking account was nearing zero right before every paycheck. Emergencies were difficult to handle and I almost always had to turn to credit if something unplanned came along. I managed, it just wasn’t easy.

Did you experience a “pivot point” where you decided things needed to be different?

During the summer of 2006 I had a number of unexpected, unplanned expenses; each time, I turned to credit. I finally sat down one day in August, added everything up and was horrified to discover that I was almost $9,000 in debt. It was shocking to me how quickly I had accrued that debt (I was essentially debt free six months prior). Clearly, I wasn’t paying close enough attention, wasn’t prepared for emergencies, and needed to do something to stop the leak. Also, I knew that digging out wasn’t going to happen overnight, so I knew I needed a sustainable plan.

Why did you settle on YNAB as your “sustainable plan”?

When you suddenly come to realize that you not only have no money, but that nine thousand of your next earned dollars have to go to pay off your creditors, spending more money on something to solve the problem seems counter-intuitive. There are so many scams on the internet, I didn’t want to buy something that would end up being a waste of money that I didn’t have.

So was there any one thing that convinced you to go for it?

It was the methodology. As skeptical as I was, I just couldn’t poke any holes in the logic of the method. It made perfect sense.

Describe your learning process with YNAB. How did you feel during that time?

I learned A LOT about my spending; that was an eye opener. I couldn’t believe how much I was spending in certain areas. The awareness helped me rein things in.

Describe your feelings one or two months into using YNAB. Had anything changed from your pre-YNAB feelings? What were those changes, if any?

I knew I had found the answer, I just had to learn the ropes.

One or two months in, I was doing fine, but the big change for me came at 6 months. You see, to be honest, I didn’t even try for Rule #1 until about 6 months in. When I first started it just seemed impossible. However, the other rules were already proving helpful. Finally, I realized that I would never be able to live on last month’s income if I didn’t at least try. So I made a promise that I would put SOMETHING in the buffer category every month. Every month I would make sure that the amount grew, even if it was only a little. Within a few months of starting my buffer category, that’s when I started to see my checking account really grow and that’s when I realized how powerful the concept of the buffer was. It has taken a while to get there, but this July I will be operating under Rule #1. I can’t wait!

Describe your current financial situation now that YNAB is in place.

I feel great. My financial outlook is SO much better. I decided to make the credit debt repayment a lower priority and so I moved it to a zero percent card. I have paid off about half of it. I wanted to make a priority of saving a mini emergency fund and getting my buffer. I have the emergency fund and will have the buffer in July. After that, I attack the debt!

Another benefit is that during the time I’ve used YNAB I also managed to make several major purchases WITHOUT a credit card or debt, including a brand new computer. That never would have been possible before.

The greatest thing is that I don’t have to panic now even if something unexpected does happen. I know I have the cash flow to handle it and I know I can find the money in my budget.