There’s no question that we are living through one of the most financially fraught times in history. As of late 2020, 63% of Americans said they were living paycheck to paycheck, with 21% having no emergency savings. This was the case for 32-year-old Yalonda — until she took control over her finances and started budgeting, eventually embracing the freedom she felt when she knew where her money was going. Below, Yalonda shares how she broke out of a cycle of debt, became financially literate, and made budgeting work for her lifestyle. As told to Melissa Kravitz Hoeffner.
My parents split up when I was five. I lived with my mom in Texas. She didn't get child support and had to work multiple jobs to support me and my older sister. She refused welfare, or any type of government assistance, and it always seemed like she was working 1,000 hours a week.
Still, money wasn’t mysterious in our household. Our money talks were about how you have to work to pay your bills. Work, pay your bills, work, pay your bills, repeat. We didn’t go on vacations or do a lot of fun things. We barely had money for food, clothes, or really anything. After graduating high school, I realized we hadn't even had a finance class, or learned anything about money. That was so strange to me. I was 18 and knew that I had to go out, work, and pay my bills; everything I knew about money I had learned from watching my mom.
I didn’t really know what I wanted to do for work, but I knew I could make a lot of money as a server, so I started waiting tables and getting a nice weekly paycheck. Once my bills were paid, I thought I could do whatever I wanted with my money. I’d get paid Friday and would spend it all by Monday. The rest of the week, I would pray that I'd even have enough gas to get to work. I started working multiple jobs, but working more didn't help because I didn't know how to manage my money. I'd have more to spend, so I’d go get my nails done, go out with friends, buy new outfits. I was being reckless. I had a savings account, but I’d put money in just to take it out. It was a cycle, a game I played with myself. My friends were also all living paycheck to paycheck and had the same spending habits, which normalized this behavior.
Eventually, I moved from San Antonio to Waco and enrolled in college. I received a Pell Grant, but it wasn’t even close to being enough to cover my expenses, so I had to take out student loans. Once at school, I decided I wanted to study accounting. My brother-in-law was a partner at an accounting firm and convinced me it was a great career — it hadn’t failed him the way working multiple jobs had failed me. Plus, I could get a job as an accountant straight out of school.
The funny thing about accounting is that you’re learning debits and credits, not how to manage your personal finances. I felt so bad about myself, I was living paycheck to paycheck, couldn't afford anything, and yet I was supposed to be helping businesses manage their money. Everyone assumes that because you’re an accountant, you should understand finance, but those are two separate things. I was working, attending night classes, and eventually gave birth to my daughter — which led to my financial turning point.
One night before class, I was thirsty, but couldn't find 56 cents to pay for a cup of water. That was a wake up call. I knew I had to change. Though my salary had recently doubled, I still wasn't tracking my expenses — I thought I was capable of remembering it all in my head. I’d think I’d have extra money to go out for lunch or out with my friends, and didn’t plan for my upcoming bills. Or I’d tell myself, I always do this, I get paid on Friday, it will be okay. It’s never going to change because that’s the way it is. That’s such a dangerous place to be — as a result I ended up in debt. I was trying to get loans that I couldn't afford to pay back. Sometimes I would float a check, writing a gas check right before payday and hoping they wouldn't cash it until Friday. It was stressful.
I knew I needed to budget — I was spending more money than I was making, so I needed to start reigning it in. Initially, I tried to do it all on a spreadsheet by myself, listing my bills when I paid them, but it became cumbersome because I was overthinking it, getting overwhelmed, and trying to do more than I needed to. I felt like I failed. I knew I couldn't continue like this and take care of my family. And I really didn’t want to look at that spreadsheet. I Googled and downloaded some free budgeting apps — I had literally no money; I couldn't afford to purchase a program or service or anything.
Mint ended up being a lifesaver. My budget for bills and living expenses was auto-calculated, all my transactions were organized — the system did the work for me. I connected my credit cards, loans, and could log in and see my net worth, my assets, and debt. You can see the good and bad, not just the bad, which is motivating to continue going. Anticipating my bills was helpful, and I was able to save my first $1,000, which became the key to not living paycheck to paycheck. Now, if a bill comes up that I wasn't expecting, or there’s an emergency, I don't have to go further into debt — I can reach into my rainy day fund and be okay. With this, I felt empowered to become more financially educated, and started listening to finance-focused podcasts and planning what to spend my money on.
Most importantly, I didn’t feel like I was missing out on anything. Seeing where my money was going gave me more freedom. If I wanted to go out with my friends, I’d put it in the budget. I stopped experiencing buyer’s remorse. Seeing all my transactions helped get me on track, and I could do everything I wanted to do. That was key. Budgeting isn’t meant to restrict you, it’s meant to free money up so you can live the life that you want. Now that I understand that, I want to help friends and family learn that money doesn’t have to be stressful. I’ve launched my own financial literacy blog and tell my story to help show people that it is possible to break the paycheck to paycheck cycle and enjoy the type of freedom that comes with budgeting.