How The Budget Mom Stopped Failing at Money and Paid Off $100K Debt

Portrait of Kumiko Love in a coffee shop
Kumiko Love combined aspects of three budgeting methods — calendar budgeting, paycheck budgeting and the cash envelope system — to come up with a custom method she calls the budget-by-paycheck method. Photo courtesy of Kumiko Love

Kumiko Love is known online by the moniker The Budget Mom, but money management didn’t always come naturally to her.

Having a finance degree didn’t make her immune to money issues. Not long after graduating college in 2011, Love was staring down a mountain of over $100,000 of debt — a combination of student loans, credit card debt and medical bills. She had poor spending habits and couldn’t stick to a budget.

“I got really depressed over my finances,” says Love, a divorced mom of one. “Here I was a financial professional and I couldn’t even figure out how to manage my own income. And for me, that was not only embarrassing but it was really frustrating. I wanted to excel in my field and I felt like if I couldn’t do it with my own finances, how was I going to help other people?”

A Budgeting Journey Begins

Love’s money management struggles didn’t come from lack of trying. She experimented with a bunch of budgeting methods but continuously found herself giving up on each one.

Love felt disconnected from her money when she recorded transactions electronically with an Excel spreadsheet. Budgeting for an entire month at a time didn’t translate well to getting paid twice a month. Using cash envelopes for everything, including bills, was too much of a headache. Personal finance guru Dave Ramsey wanted her to save just $1,000 for emergencies and then funnel money toward debt, but that didn’t feel like enough of a safety net.

“Every single time, I felt like I was failing because I wasn’t reaching my financial goals the way I thought I should be,” Love says. “In fact, I got so frustrated and stressed out I just gave up.”

For about a year, she didn’t attempt to budget her money. Though she paid her bills on time, she wasn’t saving money or tackling debt.

Love eventually hit an “aha” moment when she learned about the psychology and emotions behind spending and money management while studying to earn her Accredited Financial Counselor designation.

“It really sparked a new positivity in me,” she says.

Instead of viewing her struggles as failures, Love flipped her perspective and started examining the ways she found small successes with each budgeting method she tried. She picked apart each strategy, focusing on which elements worked for her. From there, she was on her way.

Creating a Budgeting System on Her Terms

Love combined key elements of three budgeting methods — calendar budgeting, paycheck budgeting and the cash envelope system — to come up with a custom method she dubbed the budget-by-paycheck method.

She uses a calendar to stay on track of expected expenses and bills throughout the month and creates a budget each time she gets paid. The cash envelopes come in handy for variable expenses — categories like “food,” “fun” and “beauty.” Using cash makes her budget tangible and prevents her from overspending. Love also has envelopes set up as sinking funds to save for future expenses like travel, holidays and her son’s birthday.

Throughout the month, Love tracks her spending and saving, and she closes out her budget at the end of the month to analyze her progress.

As for that mountain of debt?

“I paid off all my debt, which is a huge, huge thing for me,” says Love, who quit her job in 2019 to work full-time on The Budget Mom. “I am now able to save for the things that I want.”

How Becoming ‘The Budget Mom’ Changed Her Life

Love came up with the budget-by-paycheck method in 2015. By 2016, she decided to share her story, blogging as The Budget Mom.

She started The Budget Mom because she felt like she never got the whole picture when she was looking for budgeting help online.

“I was getting thrown examples and step-by-step instructions, but the burning questions that I felt could really help me weren’t being discussed,” Love says. “When someone gave me an example about budgeting, the first question I always had [was], ‘Why?’”

Love not only strives to share the reasons behind her spending and saving strategies, but she’s very transparent about her finances on her blog, in YouTube videos and in Instagram posts.

“I didn’t want to just tell people how to budget,” she says. “I wanted to show them what it really looked like for a real person to use a real budget in their real life. I wanted them to not only see my numbers but be able to explain to them: I’m feeling this way, this is what I’m thinking, and this is why I’m making this financial decision.”

Love says she wants her audience to feel confidence, hope and inspiration when connecting with her platform.

I didn’t want to just tell people how to budget. I wanted to show them what it really looked like for a real person to use a real budget in their real life.

These days, Love’s life is very different from when she was a recently divorced mom trying to raise her little boy alone.

“I was struggling to even figure out how was I going to make my monthly payments to now running a successful 7-figure business, being debt free,” she says.

Love’s son, James, is the inspiration behind what she does. He’s the reason she won’t give up on budgeting again.

“When my son was born, something happened to me,” she says. “I discovered a love that I didn’t know existed … but on top of that I felt a whole bunch of pressure. Here I was, a struggling mom and now I have this itty bitty human that’s completely dependent on me and my decisions.”

James has had a front seat to his mom’s budgeting journey and has naturally picked up important lessons about money along the way — shaping him into a conscious spender.

“We went out to get ice cream and we went to the park and before we left the house he said, ‘Mom, how much money do we have in our fun envelope?’” Love recalls. “He knows that whether or not we go and get ice cream depends on how much is in mom’s fun envelope.”

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Nicole Dow is a senior writer at The Penny Hoarder. This story was originally published in June 2019.