McNaughton says a "hidden skill" of managing your finances is learning to recognize when you're stuck in a limited mindset. Fed up with the "struggling artist" stereotype, McNaughton realized that she had become too comfortable with debt, simply because she couldn't envision a way out of it.
"Initially I had a very aggressive debt repayment plan, which was about 70% debt repayment and then 30% savings," she says. It was working for her, but she never felt truly comfortable. "Everyone operates differently." So McNaughton shifted gears. For the past two years, she's been allocating 70% of her discretionary income toward savings and 30% toward paying off her debt. This allowed her to pay down her credit card balances at a rate she felt comfortable with, covering a little bit more than the minimum payments every month. She made a goal to pay off one credit card every six months while building up a cash safety net and also saving for retirement.In January 2020, McNaughton hit her savings goal.
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