Where Do I Start?

Getting control of your finances can be a very difficult thing. It is messy. There are a lot of moving parts. It can even be downright terrifying! Relationships usually complicate things even more. You can easily feel completely overwhelmed. So you might find yourself asking, "Where do I start?" This is a great question because it shows you are ready to start.

First, unpack your financial baggage. Take a good long look over the last few months of bills, spending, and debts. Pull a copy of your credit report to make sure you aren't forgetting anything. Lay it all out and take a good look. At this point, one of two things will happen. You'll realize that things aren't as bad as you thought. Or your numbers are sobering because things are worse than you expected. Both of these reactions are alright. The important thing to remember is you need to know where you stand in order to do something about it.

Second, balance your budget. There are only two sides to the equation- Income and Outgo. If your expenses are more than your income, which is very common, there are only two things to consider- cut expenses or raise your income. Usually a combination of both is needed. The deeper you cut, the faster you can pay down debt.

Third, Prioritize your spending. This is essentially a budget- telling your money where to go. Start with food. How much money does it take you to buy groceries? I'm talking basic groceries, not pricey pre-packaged convenience foods. You would be surprised how much you can save just by meal planning, food prepping and shopping sales. Even if you have food allergies or special diet considerations, cooking at home is cheaper and healthier than eating out. It takes time and planning, but no matter what your circumstances, you can trim this expense. Next you want to pay for housing. This includes your rent or mortgage, all utilities and insurance. Transportation is next. Pay your car payment(s) and gas or buy your transportation pass. Last is clothing. Again we're talking basics. You would be surprised at what you can find gently used at your local thrift store. These are what form your four walls. If you can afford these, no matter how bleak your circumstances, you will live to fight another day because you've got a roof over your head, clothes on your back and food in your belly and a way to get to work.

Fourth, consider selling something. This can be a car that is ridiculously expensive. A good rule of thumb to sell is if your vehicles total more than half your annual income. Or sell extra stuff you don't use or need anymore. Have a big garage sale or sell items on Ebay, Craigslist, Facebook, Instagram or other online yard sale sites. The house is the last thing I would consider selling and that's only if the payment is half your takehome pay with no prospect of having your income increase dramatically.

The Fifth and final thing you need to know to get started is to keep going! If you are new to budgeting, give yourself a solid 90 days to get used to it. I guarantee there will be hard, horrible days, but I promise it's worth it. I've been there and can tell you there isn't a greater feeling than seeing the fruits of you labors.

Why Debt is Never a Good Thing

In today's world of easy credit, buy now- pay later consumerism, we are bombarded with debt every way we turn. This isn't surprising as selling debt as a product is quite profitable for companies. In many cases companies make more on debt payments from consumers than they do in actual product sales. Think about that next time your cashier asks if you want to save 10% on your purchase by opening a credit card.
On the other side of this are the giant retailers borrowing massive amounts of money to keep the status quo. We saw this a lot during the 2008 recession and subsequent housing bubble bursting. Those who failed to adapt or had loads of debt to begin with, went out of business when consumers stopped spending. With cutthroat competition and sometimes razor thin profit margins, debt becomes a millstone around the necks of retailers. Now a decade later it's all hitting the proverbial fan for these retailers. We're talking household names like Radio Shack already gone, while Sears and Kmart are both in a downward spiral. Toys R Us is next with complete closure happening in June.
You might be asking what this has to do with personal finance? Debt is normal, what's the big deal? Everyone has debt, so why does it matter if I borrow money for things I need and want? Don't buy into the myth that debt is a tool that smart people use to their advantage. The truth is whether it's personal or business- Debt only works until it doesn't. It's estimated that once a decade the average household faces some kind of major emergency. This means an extended job loss, illness, disability, accident or death that majorly impacts finances. It is not if, but when there is the slightest change in circumstances, debt can bring you (or that giant retailer) down. Remember that debt is risk. Debt is bondage. Debt limits your future. It is that pretty facade masking a house of cards that could fall at any moment. Is that really a path you are willing to take? Trust me. It is not. Having been down both roads, I can tell nothing equals the freedom of living debt free.

Clean Slate

Isn't it funny how life gets busy and time slips away from you? I've been thinking about writing another post for months, but never taken the time to actually sit down and do it... Until now! I've been watching a lot of YouTube lately (which is another reason I haven't been blogging), but several of the channels I watch on a regular basis are financial vloggers. They are all different ages and from different backgrounds and in different walks of life, but the one thing they have in common is a passion for getting out of debt, living frugally and being transparent about the good, the bad and the ugly on YouTube. Watching their stories has reignited my love for helping others win with money. While I prefer to write rather than vlog, I hope I can make a difference for you and your financial position. I want to start by getting back to basics, helping you start from scratch if necessary. A clean slate so to speak. I also want to talk about the deeply rooted emotions we all have about money. So stay tuned for some exciting things to come later this week!