8 Things You Should Do to Fix Your Finances FOREVER
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The topic of finances isn’t an easy one. I am not a financial guru, as you will quickly learn, thankfully my husband is. He has a Masters Degree and was a corporate Accountant for over 20 years. Being married to him for 18 years (and being his #1 financial challenge, seriously)… I’m excited to tackle easy ways to fix your finances forever.
My husband and I dated for 10 months when he popped the question. I was beyond smitten with this hunky guy so of course I eagerly accepted his proposal.
As wedding planning was in full swing, we were talking about a lot of money matters… all to do with the wedding and honeymoon. Until one day we started talking about our personal finances. That’s when things got real.
He was in $70,000 of student loan debt and I was in $25,000 of credit card debt.
This is where we were as we were about to start our “dream life”.
Fast forward, my husband & I not only paid off our combined $85,000 of debt but I was also able to leave Corporate America to become a full-time wife, mom, and business owner!
We’ll touch on how we did that later.
In order to figure how we got where we are, we must get to the root of the cause. So let’s start with WHY.
Today in our world, this very scenario that I’ve laid out is unfortunately very much of the norm.
As a society, our spending and debt have gone completely out of control.
According to Forbes:
“Recent data from the New York Fed Consumer Credit Panel and Equifax shows that Americans 18-29 years old owe $1.05 trillion in debt.
The debt is comprised mostly of student loans, but also includes auto loans, credit card debt, mortgage debt, and other forms of consumer credit. The last time this age group owed more than $1 trillion in debt was the fourth quarter of 2007, near the time of the 2008 financial crisis.”
CREDIT CARDS
Americans overall owe nearly $1 trillion in credit card debt, and that’s an all-time record high according to a report out this week from the Federal Reserve. (Npr.com)
Credit card debt is unfortunately very normal. Spending money you don’t have is not only normal and accepted but highly encouraged.
I remember getting credit card offers in the mail as soon as I graduated high school and before I even left for college. Don’t even talk about when I got there. Credit card applications, tables, and employees everywhere.
Sporting events, the same thing. “Sign up for a credit card and win this.”
These offers are everywhere we turn.
STUDENT LOANS
According to the Federal Reserve Bank of New York, outstanding student loan debt in the United States lies between $902 Billion and $1 Trillion with around $864 Billion in Federal student loan debt.
Student loans are normal. People in their 20s, who are starting their dream life right out of college, are thousands and thousands and thousands of dollars in debt.
Totally normal.
Then they are told to buy a car, and a house, finance it all plus everything that goes inside of it, and go further and further and further down the hole.
SOCIAL INFLUENCE
Let’s start with the lifestyle of the rich and famous.
TV, social media, billboards, magazines, books, etc. Everywhere you look is all about this glitz and glam of famous people with lots of money.
Am I down on the rich and famous? NO WAY!!
Good for them. Most have worked hard to where they are today. They’ve invested themselves in their dream life. That doesn’t just happen overnight. It takes a ton of time, money, commitment to getting that kind of life.
Blood, sweat, and tears.
But we don’t want to hear about that… we only focus on where they are today. The glitz and glam.
And that’s where it leaves us.
We focus and dream upon the highlight reel of other people’s lives and dissect and rip apart the outtakes of our own.
As we scroll through social, then the comparison game and “keeping up with the Jones’” syndrome kicks in.
Who are the Jones anyway? And why do they have so much power over so many?
The Jones’ are your neighbors, classmates, coworkers, family members, social media network, anyone you spend time with. Physically or virtually.
You are who you spend time with.
So if you are trying to keep up with the Jones’ or the Kardashians… good luck! Watch your money disappear as your debt grows.
As Dave Ramsey puts it,
“we spend money we don’t have to buy things we don’t need to impress people we don’t like.”
~ Dave ramsey
We never feel we have enough or are good enough. That is a huge problem.
Money will NEVER solve that problem.
Making a lot of money or spending a lot of money will never make you happy.
Putting yourself into financial stress to have what other people have will only feel good for a little bit… until the credit card bill arrives.
Can I go off on a social media tangent for a sec?
SOCIAL 101: If you are following more people than are following you, that’s an issue.
I have teenage boys. They are not active on Instagram. They do, however, have accounts so that I can tag them in posts for memory building and journaling.
Their accounts are private. So when they get follow requests the first thing I do is look at who the person is. Then I look at how many people they are following and how many people are following them.
I always shake my head as I usually see most people are following THOUSANDS of people. Literally THOUSANDS.
That instantly tells me they are confused. Why?
Too much noise. Too many opinions. Too many voices. Just too much. They are being inundated with stuff thrown at them all day. How they should look, feel, think, act.
They are comparing their lives to those they follow.
How do you even keep up with following thousands of people in a single day?
I can’t and don’t.
Less is more, friend. Less is more.
Time for a social media detox
COMPARISON
The comparison game is an evil trap! I learned a long time ago… comparison is the THIEF OF JOY.
Wanna be miserable? Keep comparing your life, clothes, house, car, relationship, kids to everyone on TV, social media, at school, or work.
Comparison is a total recipe for DISASTER!
GET REAL
The only way to fix your finances forever is to, yes, get down and dirty… into reality and the nitty-gritty details.
This part is NO FUN… but must be done.
You can’t fix what you don’t know.
1: TRACK IT
The BEST way to start to fix your finances forever is to take 7 days and write everything you spend money on down in a notebook. When I say everything, I mean EVERY. SINGLE. THING.
That bag of chips and soda from the gas station. Those movie tickets. That Starbucks run.
Every single thing, big or small. Write it down.
Through all we’ve learned and have overcome financially, my husband and I have mentored hundreds of people to do the same.
We love to sit down with people and walk step by step through where they are and where they want to go.
And let me tell you when looking at the details, 9 times out of 10, the area that takes the top spot in spending is…
Eating out
Money-Saving Rule #1: STOP EATING OUT
What you can get at a restaurant for $15, you can make at home for $5.
Save eating out for a special occasion or a celebration… not daily meals.
You can only go out to eat so many times before you start wondering where all your money is going.
At the end of the 7-day challenge add up how much money you spent on food out. It’s literally shocking.
Choose to cook at home. You will save a ton of money.
Not sure where to even begin with planning, preparing, and shopping?
Check out these 3 Simple Steps to Meal Planning on a Budget
2: HAVE A BUDGET
Speaking of budget… let’s get into it.
This is my least favorite word and thing to do but in order to fix your finances it must be done.
As a “fly by the seat of my pants” kind of gal a budget was very controlling. I didn’t like being controlled. Annnnd that’s exactly how I ended up in $25,000 worth of credit card debt.
There needed to be control.
So when making a budget here are the areas to consider for your budget:
- Charity
- Savings
- Housing
- Utilities
- Food
- Clothing
- Transportation
- Insurance
- Health
- Personal
- Debts
Be sure to Download your FREE Ultimate Monthly Budget Planner below.
Did you know there are recommended percentages of your income that your living expenses should fit into?
I had no idea!
For example:
- Charity = 10-15% of your income
- Savings = 10-15%
- Housing = 20-35%
- Utilities = 5-10%
- Food = 5-12%
- Clothing = 2.7%
- Transportation = 2.7%
- Insurance = 10-25%
- Health = 10-15%
- Personal = 5-10%
- Debts = 5-10%
There’s the math equation.
This is a great time to stop and really break down:
- What your spending should be based on these percentages above
- take your current income x by each of these percentages
- Determine your goal numbers
- Figure out what your spending percentages currently are
- take your current income divided by current spending in each category
- What areas are far above the recommended percentages
- Where you can start cutting some spending
This exercise is very eye-opening!
Need to get your mindset clear on finances? Here’s a great option!
3: BE A FRUIT INSPECTOR
In order to fix your finances forever you definitely want to become a “fruit inspector”.
What does that mean? That you are looking to talk to people about your finances based on the fruit on their tree. In other words, how successful they are managing and thriving in the area of finance.
It’s not their stuff you want, it’s their financial knowledge and peace you want.
I learned early on that if I really did know everything there was to know about money management and finances then I would NOT be in the situation I was in.
I had to lay down the ego and admit that I needed help.
Then I needed to search in and out of my network for people who were super successful with their finances. Whether it was a book, podcast, online course, wealthy family member, or a referral from a friend… if they had the type of life I wanted, then I was willing to listen to what they had to say.
Please note: just because someone is related to you or is a close family friend doesn’t mean you MUST listen to them.
This is where you put your inspector hat on and analyze their life. You won’t see or know everything but there’s enough evidence to gather by their social media, their job status, their income status, their attitude, and the words coming out of their mouth.
Successful people speak success, broke people speak broke… stop listening to broke people if you don’t want to be broke!
4: CUT UP THE CARDS
As my then fiance and I were working through this financial bombshell, he sat me down and asked for all of my credit cards.
Most were maxed out, so that was fine. He proceeded to take a pair of scissors and cut them up before my eyes.
I was like where do I get money??
He repeated… CREDIT CARDS AREN’T MONEY. This was an important lesson to learn in order to truly fix my finances.
He put me on a full-time cash-only system!
5: CASH IS KING
We had to go on a total and complete CASH ONLY lifestyle. If we didn’t have the cash for it, we couldn’t get it.
Each week, he gave me an “allowance” and once it was gone it was GONE! Period.
Oh my gosh… this was life-altering.
This forced my mindset to change… completely.
It went from getting what I want when I wanted it to… nope, not today, or tomorrow, or the next day.
I know what some people are saying right now… Maureen, isn’t that your money too?
Yes, I was working a full-time job at the time, I was earning my own money, I did not need someone to tell me what I could and could not do… but ya know what? I had to get real.
I put myself into this situation… I needed help getting out.
I earned the title of “fiscally irresponsible”. I had to accept the title and do what was absolutely necessary to fix it.
I had to put my ego aside and let someone help me. I needed to fix my finances.
I started learning the concepts of delayed gratification and goal setting.
6: DELAYED GRATIFICATION
For me, it was mainly in the area of shopping.
I didn’t NEED that new pair of shoes, or jeans, or that amazing new handbag.
I definitely wanted it, I just didn’t NEED it.
I had to get real with what my needs vs wants were:
- Food
- Water
- Shelter
That new handbag did NOT fall into any of those categories. Leave it on the shelf.
I knew that if I adopted this mindset of “not now” and “the time will come” that I would succeed overall. This would help fix my finances quicker.
I had to put the impulses aside and I had to focus on the big picture of what I wanted to accomplish.
That’s where goal setting came in.
7: SET THOSE GOALS
I had to have the big goal. What was the specific number that was going to make my life better and more peaceful?
What was the plan to get there?
Then, get to work.
In the meantime, there were things that I wanted and needed. So how did I handle that?
#goals
If I wanted something, big or small, it was time to set a goal.
I couldn’t just say I wanted to fix my finances, I had to get specific.
If I wanted a new pair of shoes I would cut or print out a picture of them, hang them up, and write out exactly what I needed to do to get them.
I would often tie my goal to my business because I knew if my business grew, my income grew, and ultimately would take care of any financial worries.
Tip: be sure the goal fits the prize. Cleaning your room for a week for that new Gucci bag… ummm, no girl, no.
If it’s something you want to buy, then the goal should involve something that makes you money.
However, if you want a new pair of workout pants, set the goal to follow a strict workout or eating plan for 30 days.
Hit that goal? I totally think constitutes a new pair of workout pants.
Something that’s helping you with a big goal overall is always good.
Need help crystalizing your future and what you want to look like? Then definitely take the 5-Day Vision Challenge. Wow ~ will this help you know EXACTLY what you want!
8: FOLLOW THROUGH
Do whatever it takes to follow the plan. If you know you are not strong enough yet on your own then find an accountability partner.
Have a conversation with them and discuss your roles.
Open and honest.
What do you commit to?
What do you need and expect of them?
Talk about it, get on a plan, follow through.
EDUCATE
Want a course that will literally take you step-by-step to gaining financial peace?
Want to get your kids off to the right financial mindset start?
So that is it! These are the 8 things you should be doing to fix your finances forever!
Tell me your thoughts in the comments below… I would love to hear them!
