By Lisa Walters,

The COVID-19 pandemic is affecting every single one of us in some way. I’m not here to compare situations or share my opinions; but I did want to share how the recently released color-coded phases, which state guidelines for “reopening,” have caused me to reflect on my own personal debt-free journey.

I immediately began making connections of what life was like during our red phase to financial freedom. At the beginning of this phase, my husband and I were drowning in debt and sought guidance from professionals at the Credit Counseling Center. Our counselor gave us the most beneficial check of our financial journey… a reality check. We immediately stopped using credit cards, budgeted our income to live cash only, and prioritized building our savings accounts. Because of this, we said, “NO” to many things for nearly a year. (Please note: I am not suggesting or comparing actual length of time for each phase. This will be fluid and dependent upon individual scenarios.)

The reality of saying, “No” meant we rarely went out to eat, declined invitations to a few weddings, and made minimum payments on all our bills so we could build our savings. We pushed off house projects and vacations and didn’t go shopping without a strict purpose. We meal-planned and stretched what was already in our kitchen cabinets. Our grocery store runs were limited, quick, and efficient. Do you see the similarities? We were in complete shut down mode and stopped doing many things from our previous way of living. Together, my husband and I were forced to adapt and develop new routines, in order to prepare for a financially healthier yellow phase.

The yellow phase of financial freedom isn’t nearly as strict as the first phase, but you must still proceed with caution. In this phase, you’ve adapted smarter spending routines. Your debt is getting paid down at a nice steady pace and you have cash available for your basic needs. You do not have to say, “No” to every little thing, and you have the skills to plan ahead and prepare for upcoming events. You will have some money saved for “what-ifs.” However, you are not completely out of the woods. You are definitely not debt free and the bulk of your income is still being applied to paying down those nasty credit cards balances. Though you will have the tools and habits in place to be successful, and this phase is full of so much hope because you are headed down the right path.

The green phase of financial freedom is where we should all want to be. Maybe you still have a large long-term debt like a mortgage payment to chip away at, but all those annoying high interest credit cards and car loans are a thing of the past. You have cleared the bulk of your debt and your savings account is strong. Strong enough to tackle 3-6 months of your basic expenses in the event of a job loss. Strong enough to pay for a vacation you’ve been wanting to take. Strong enough to not cringe when you have to purchase a new dishwasher because your current one decided today was the day to go wonky. Strong enough to donate money to organizations and charities you believe in without it ruining your monthly budget. It will take a period of time to reach this “Go-Zone,” but you’ll get there.

I recommend everyone sit down and make a list of restrictions and goals for each phase. What debts do you need to pay off? What things will you cut out in each phase to become financially stronger? Which boxes do you need to check off to move into another phase? What are your hopes and dreams of things you want to be able to afford to do? It is never too late to take control. Get started by planning out your own three phases of guidelines to achieve personal financial success.

Lisa became a client of the Credit Counseling Center three years ago, when she reached out to ask for help to take control of spending and credit card debt. Since then, she and her husband have successfully developed a budget, established a savings account and emergency fund, and started a plan to pay off their debt. She is the mother of three and lives in Bucks County, Pennsylvania.