I started asking myself this question after college and started to sense the weight of my student loans. Where was my money going? I couldn't account for most of my spending and still felt like I had nothing to show for all the money I was making at the time. It felt like I was dazed, and confused about what was going on... and I hated that feeling. I didn't like not feeling in control.
What might be easy for me, might not be the easiest or most efficient way for you. Everyone is different and some budgeting methods might come more naturally to you than they do for me. Which is okay, but until you explore or at the very least research into different ways, you'll never be able to find what works for you. For me, I use Mint.com to track my spending because it links to my bank accounts.
Using a spreadsheet, I've listed out all of my annual bills (and even my semi-annual bills) and then added them all up. That gives me a total for the year, and then in another cell, I enter a basic math formula that divides that total by 12. I know have a number I save every month into my savings account automatically.
Wow! This can be really hard sometimes. You probably already feel that you’re out of your comfort zone and can’t possibly handle any more than you are. That’s okay, but growth and change will only come when we keep putting ourselves out there - whether by our own choice, or someone else’s.
This is script we are using to frame our lives and guide are actions. When we are negative and doubt, we respond to life in that way. When we believe that we can do hard things, then we start to accomplish the impossible .
Throwing a party can be stressful, especially when you aim to impress. However, I have learned that most people just like getting together and are more than willing to bring something to contribute to the party if you just ask. But you have to have a plan and be organized - the less thinking people have to do, the more likely they will contribute freely.
How to celebrate a birthday without breaking the bank. Especially when celebrating a birth week. Going out to eat is often the least stressful way to celebrate, which means you might be eating out a lot around the week of your birthday. To save money, be sure to sign up for the different birthday clubs at your favorite places so that you can get free or discounted meals.
Buying gifts in the first place can be difficult, especially if the person you’re buying for isn’t very good at dropping hints at what they would like to have. However, if you have time to plan and shop, you buy gifts on budget. What I like to do is set a budget... whatever it is I’m comfortable spending for that individual and then decide what it is I want to buy for them. Once I’ve figured that out, I go to DealNews.com and search for current deals, or create an alert for future deals.
I love the summer time. There are so many different things you can do outside with your family and friends that will cost you next to nothing. I did things like float the river. Ride bikes along the Greenbelt. Attend local festivals and other events that were free to get in.
Traveling can be addicting and just as expensive. Without careful planning, any trip or vacation could seriously hinder your financial goals because things cost more than you were expecting and all your spontaneous spending went on the credit card. Wherever you go, you need to create a plan of what you want to do and research how much it’ll cost.
Thanksgiving, Christmas, and New Years seem to happen all at once! But planning ahead can really make a difference in being able to afford the travel, the food, the gifts, and all the festivities. Even having a quiet holiday season can cost a little bit of money. The key to planning for the holidays is to give yourself plenty of time to save smaller amounts of money.
With Memorial Day still in the rear view mirror, all of the pools and water parks are officially open - Summer is here! Here are some great ways you can still have all the fun in the sun while not breaking the bank. 1) Buy season passes on discount to water parks. 2) Do BBQs with neighbors to save money on all that great food. 3) Search on Groupon for discounted events or on Facebook for the events calendar for neighborhood or community events. 4) Make a list of what you want to do for next year...
I think it’s important to believe that this is a myth and a mental roadblock. What is your roadblock? What is holding you back from even just believing that you’re capable of getting out of debt? Once we are able to identify that (even if it’s multiple things) then we are address them one by one. And I’d love to hear from you what you feel your roadblocks are.
It’s time to dive in head first, or at least with both your feet. At this point, you have a budget and you’ve already identified different things you can do or change to create some extra money for you each month. It’s just a matter of putting it all into practice. Spend a weekend make whatever adjustment are needed and setup whatever automatic banking you can so you don’t have to think about it anymore.
You probably weren’t expecting me to just say, “Take a chill! Soak up some sun.” Well, I am. Before committing to big lifestyle changes, it’ll be worth the time spent thinking through everything. This isn’t a time for doubt or to give up, it’s a time to reflect on you imagining yourself living this new way of life. The budgeted life. Once you can see yourself living this way... you have that mental game plan... the break time is over. It’s go time!
Getting out of debt sooner than later relies 100% on the amount of extra money you’re able to put towards your debt every month. This tip basically requires you to add it all up. How much extra money do you have from your paycheck every month, and how much could you have after making those adjustments. How much do you have? How much faster will you be able to pay off your debt with it?
Now that you’ve created a budget, meaning, you’ve setup some spending categories and now know how much you’ve been spending in each of them. It’s time to evaluate what you’ve been spending money on and if there are any adjustments that can be made to save some money. This could be realizing that gym membership you forgot you had. IMPORTANT NOTE: For this tip, or step, don’t take action right away on anything. You’re just making a list of things you could cut out, or make an adjustment to.
Creating a budget is no easy task. Don’t let anyone fool you if they are saying otherwise. The most important thing you need to figure out is which method you’re going to use to track your spending. You might even have to try a few before deciding which budgeting system works for you. Once you’ve figured out what works for you, you need setup some basic spending categories that every bit of spending can be tracked in. Even using previous transactions, you start to figure out how much you spend i...
Knowing where to get started is tough, but if you can do these things, you’ll find success: 1) Create a budget. Know where your money is going. 2) Find areas you can make adjustments to with where you are spending money. 3) Add up how much extra money you have. 4) Let it soak in and take a deep breath. 5) Go gazelle (as Dave would say).
Oh man. What do you have?! Honestly, selling of random things is great for the sprint, but not the marathon. Sell your couch, but where will you sit? Sell your car, but how will you get to work? I believe its less about what we are able to sell as much as it what we are able to change or switch out that will help us get out of debt faster.
A common roadblock is just knowing where to get started. Simply put, getting out of debt is paying more than your minimum every month. However, that proved to be much harder for me and I struggled over this concept because putting an extra $50/month towards a loan was good, but not enough. I needed more than that, but where do get more than $50/month if your paycheck isn’t magically going to increase?
Unhesitatingly, yes! It is so worth it. In the last episode we talked about why it’s important, but is it worth it? From a self-worth perspective, getting out of debt is easily in my Top 3 of major life accomplishments. Sometimes the worst experiences in life are often times the best teachers because of how they shape us and help us grow into better people. If you allow it for yourself, I think you’ll find many wonderful life lessons along the way that will change you for the better.
There are a lot of reasons why this might be important, but for myself, getting out of debt was important to me so that I was no longer burdened every time life was turned upside down. Going along with the last episode of how do I get out of debt with no job... well... being unemployed with a mountain of debt constrains how far you’re able to stretch whatever income you do have.
The answer to this will vary greatly depending on individual situations. My experience of being unemployed while still trying to pay off debt was tough and everything was reduced down to paying only the minimums until I could sort everything back out. I have a follow up question... Does no job also mean “no money?”
A low income certainly makes us squeeze if we are trying to get out of debt. The good news is that it’s not impossible, but it will require some thought out sacrifices until your debt is paid off. Just remember, getting out of debt with a low income only means it might take a little while longer is all.
You bet it will! There are two things that impact your credit score greatly: 1) Being on-time with your payments and 2) Using only a small portion of your credit line. The more you pay down your loans and get out of debt, the more you’ll improve your credit score naturally.
I’m going to assume that you have bad credit because you had a rough go at paying back some borrowed money. Which might make it seem like history might repeat itself, but the good news is that paying off debt doesn’t require good credit - only borrowing money needs good credit.
A credit score is basically a ranking system that tells lending companies how well you handle money that doesn’t belong to you. There are a bunch of things that affect your credit score such as: on-time payments, usage, average age, number of accounts, inquiries, and derogatory marks.
So much of this comes down to your ability to recognize the struggles and the fears that you have and addressing them one by one. You’ll be stopped dead cold in your tracks every time if you’re unable to get over the barriers that are there. We won’t be vaulting over hurdles, most likely, but we’ll be more willing to try.
Write down the positive things that are happening in your life everyday. Training your brain to see the positive will go a long ways in your ability to roll with the punches. Also, finding trusted outside perspectives can help us see the bigger picture.
