Once I made the decision to move out on my own a few years ago, I had to stretch my paycheck and make it work. I had to pull up my adult bootstraps and pay for rent, food, utilities, student loans, credit cards and my car. Oh, and let’s not forget my social life. I was still young and did not want to give up the fun nights out with friends. I was still shopping (aka retail therapy) and going out with my friends when I should’ve kept my wallet in check. Restaurant visits, mani/pedi dates, vacations – you name it and it was on my agenda. At the same time those were the days that I was scared to log into my bank account and look at the balance. I knew that all those nights out and trips to the mall were adding up and I was scared to face the reality.
I feared the truth. The truth that I didn’t want to know how much money I was spending mindlessly. All the frivolous spending was catching up to me and I always feared that my account would be overdrawn. Whenever I thought my balance was getting too low in my checking account, I would turn to any one of my
trusted credit cards and place the expense there instead. Foolish I know because I wasn’t taking care of the real issue at hand. It was much easier to just throw out my bank statements when they came in and not pay attention to where all my money was going.
The fact that I was fearful of the state of my finances was enough for me to want to change what I was doing. My mindset was always that I worked hard for my money so I should be able to spend it as a please. Correct I did work hard, but I owed it to myself to make wiser financial decisions. I felt that I deserved nice things, to pamper myself and to go away on nice vacations. What I deserved was to feel financially stable and to be free of debt. I didn’t realize that I could still have what I wanted, but only if it fit in my budget. I told myself that had to sit down and create a budget at the beginning of every month. I had to take control of my money and know exactly where it was going.
In order to take control of your finances, I’ve listed some tips below:
Face Your Truth
The only way you will truly know how much debt you are in is to find out the exact number. You will need to open up those bank statements, check your credit card balance, log onto the student loan website, etc in order to find the total amount due. Once you have this figure write it all down. The number might startle you or it might not be as bad as you thought. Either way you now know and can move forward from this point.
A huge reason why you will succeed is by having a budget. You have to know where your money is going otherwise you will never be fully in control of your finances. The budget will allow you to see how much income you’re making and what bills you have to pay every month. Once I became serious about paying off my debt I created a budget and it’s been one of the reasons why I was able to become debt free. As mad as I was to see how much I owed debtors, it made me mad enough to want to be done paying them once and for all. Having a budget will allow you to see how much you are paying for everything and then you can find areas where you can make cuts.
Make sure you pay the bills that will keep a roof over your head, your lights and heat on and food in your belly first. After these bills are paid, then you can make payments towards your debt. When I was paying down my debt I used Dave Ramsey’s baby steps. During baby step #2 he asks that you list your debts from small to large and attack the smaller debts first. Once you pay off the smaller debt it will give you a feeling of accomplishment and give you that motivation you need to attack your other debts.
This moment in your life is not forever. The harder you work now to pay off your debts, the better you will make your future. There might be times when you compare your situation with others and get down on yourself. Don’t try to keep up with the Joneses because they are broke! People only show you want they want you to see. Remember why you started this journey to begin with and allow that to help you through the tough moments.
Start Saying No
You can no longer make every social outing, go on all these vacations, continue to go out to eat and shop mindlessly. You might be worried that by the end of this you may no longer have any friends if you continue to say no, but your real friends will understand. You have to remember your priorities and that includes being debt free. So minimize your frivolous spending and keep an eye on the prize.
Find an Accountability Partner
Find someone that you trust and will support you along this journey. It can be a spouse, a sibling, parent, best friend, co-worker, fellow blogger – whoever you feel you can confide in and will keep you in check. It’s hard to be on this debt-free journey without someone who will continue to cheer you on when times get tough. Tell them about your wins, but also your fails. You never know you might motivate them to want to get their finances in control too.
If you’ve ever felt scared about your finances, today is the day to turn that around. Log into your bank account and take a hard look at where your money is going. It’s time to face your truth. Are you shocked at anything on there? Notice any areas that you can spend less? Now grab that pen and paper and create a budget. Or get a fancy with it and release your inner spreadsheet nerd.