While I am not certainly not a financial guru; I have learned a lot over the years about managing debt and being financially responsible. In my former financial life I was one “hot mess,” as the kids say. I was never very good with money and I didn’t think twice about using my credit cards. As long as I had the money to pay my bill on time every month, I was golden.
But, eventually things started getting out of hand. My father had been diagnosed with lung cancer and in my desire to accompany him to treatments and take care of him, I took a commission-only sales job. Suffice to say, between my mental turmoil over my dad, and the fact that I hated many of the activities necessary to succeed in sales, I did not do very well. Then, I decided to try an internet business.
Around this time, I had taken a loan from a credit card company and planned to use it to consolidate my debt. But, since I was not bringing in any income, guess what I was using that money for instead? Yup, paying my bills, grocery shopping and all my other financial needs. Besides using a few thousand to pay off my car loan, the rest went towards simply ‘living.’
I had hit rock bottom, and I completely changed my habits. Besides a student loan, I have no debt. I went from never having a savings account to enough banked to probably live at least a year with no income, should that situation ever arise. Here is how I did it.
Deciding Never Wanting to Feel the Way I Felt Ever Again
Money worries are intense; we need it to live and not having enough really puts a strain on our well-being. My debt was the first thing I thought of in the morning and the last thing on my mind before I fell asleep. I would cry and panic. I realized I could not go on this way and thatI was not doing enough to change. I had to take control. I couldn’t blame the clients who didn’t buy from me, I couldn’t blame my father’s illness. My problem resulted from bad choices, and once I took responsibility, things started to change, and I started to feel better.
Sure, I made some uncomfortable sacrifices, but each time I felt tempted to get off course, I remembered all those horrible feelings, and how I never wanted to feel that way about my finances ever again.
If you are not being responsible with your debts, and it is causing all sorts of negative reactions, really tune into those feelings, and how bad they are. What choices could you make now that would help them go away? Imagine how good it would feel to make them go away. You will find it much easier to make those decisions knowing the benefit you are receiving.
Changed My View of What Budgeting Meant
Just wanting to be better with money, and knowing you have to pay off debt is not enough to accomplish this goal. First and foremost, I did some serious number crunching—yes, I know making a budget is cliché and boring, but it is effective. So stop putting it off and just do it already. Learn to look at it as a helpful tool for creating a better financial future, and not some sort of punishment or ‘’fun-killer.’’ That is what I did, and I found it much easier to stick with; in fact, sometimes it was quite fun implementing it when I began to see how much money I was able to save and put towards my debt, and brand new savings account. This post here offers several good ‘challenges’ to help you develop more responsible spending habits, and I implemented quite a few myself.
Made a Specific Plan
When it came to my credit cards, I took the tack that would give me the best psychological boost. I paid off my smaller cards first because it felt really good to see that 0.00 on the balance. Then, for my larger debt, I looked into credit cards offering no fee 0% balance transfers and moved my balances to that card. Then, I made as big a payment as I could toward that card each month.
Once my debts were paid off, I started getting more serious with my savings goals. I committed to putting in a certain amount each month, and if an expense came up that was not in my budget, I put in on my credit card, and scheduled to pay it off in full by time I got paid again, so that I would not take the money from my savings. If you are still not feeling confident in your card use, however, I would suggest maybe not doing this.