It’s the final week of Financial Literacy Month! While I’m sad to see it go, the rest of the month I’m going to share financial information that just might help you turn your finances around. Grab your snack preferably raw broccoli because we want to be beach ready for the summer, and a glass of water…or wine for antioxidants…whatever makes sense at this moment and we’ll get started!
For the moment of truth! Today’s topic is surrounding the easiest way to control your finances. I’ll give you some initials steps to begin making debt your b*tch! This is pretty much what I did when realized I was doing my financial life a disservice.
#1 – Take a look at your spending over a span of 3-months to find out how much you’re spending on:
- Living expenses such as rent/mortgage, electricity, gas, water, and phone bill.
- Transportation expenses such as car payments, car insurance, and gas purchased.
- Eating out and buying groceries every month.
Get the totals for each month and average them out. In simple terms, add the figures together according to their category and divide them by 3 (for how many months you’ve done this exercise for). The resulting amount is how much you spend regularly every month. You may have to look at multiple statements to get an entire picture depending out how you handle your spending.
Don’t like what you see? Change it. Try to lower the amount spent on food/eating out, find ways to reduce costs for utilities (such as unplugging devices not in use), shop around for better car insurance, or better yet, obtain a lower more affordable car.
I was spending $1,100 on living expenses when I first started my journey not including my phone bill. I reduced my living expenses to $465, had roommates, and that made all the difference for me. That was a drastic change that I don’t regret.
#2 – If you’re spending money on late fees for loans or credit card payments, use #1 to help gain control over your spending first and really focus on aligning your bills so they are paid on or ahead of time. Use a planner to write something out in a notebook to keep track of what will pay what. This will require some pre-planning; you are officially budgeting at this point. You have to determine if you’re over spending or you just can’t afford your life and adjust accordingly.
The reason I moved as I stated in #1 is I simply couldn’t afford my life with all of the debt I had to pay. I changed things up and I had a lot more breathing room in my budget while making $47,258. I also met a few really cool people while I had roommates.
#3 – Now that you’ve got your spending under control and you’ve aligned your money in a way that makes sense, it’s time to start paying down high interest debt. Particularly, credit cards. Trust me…the interest is feasting on your income. If you haven’t stopped using the credit cards regularly…now is a great time to stop because you’re fueling the fire.
I went from spending almost $6k in interest annually at the start of my journey to paying less than $1k a year. I no longer pay a bunch of interest for debt. My current loan with the highest interest rate is my personal loan and it has an APR (annual percentage rate) of 5.99%. I had to get my credit in a better place before I qualified for this rate. It’s been the longest 4-years of my life.
As a disclaimer: This is not a cure-all, it’s a stepping stone. Occasionally, therapy will be needed to get to the bottom of some deep-rooted issues that are causing a shopping addiction or impulsive spending. Please don’t be afraid to get a licensed professional involved.
This may require you to make some hard decisions about your life which will help you to determine why you’ve decided to change your finances. My why was, I knew I wanted to buy another house as early as August of 2020 and I just couldn’t do that with $16k of credit card debt. Especially considering I had to completely change the plan in order for me to be able to afford my first house. Once I realized what I needed, budgeting was my only way out. I needed to get smart with the money I had at my disposal. Even though I don’t make a ton, I’m still making enough to finance my lifestyle which isn’t anything of luxury but is very comfortable for me.
Any modifications made to your life can be readjusted later on. If you decided to cut some subscriptions, you can always re-add them down the line when it doesn’t hurt as much. Most importantly, only do the things that you’re comfortable with because personal finance is personal.
Pro-Makeup Artist Tip
When it comes to makeup, worry less about the trends and more about what makes you feel good. If you don’t want to contour…don’t! If you’re not a huge fan of highlighter, leave that part out of your application. Just like finances, makeup is personal as well!
If you choose a makeup artist for an event or photoshoot, make sure they’re flexible with the looks they create or their personal style fits what look you’re going for.
Until Next Time!
Photo by micheile henderson on Unsplash, Photo by Obi – @pixel7propix on Unsplash, Photo by Glenn Carstens-Peters on Unsplash, Photo by rupixen.com on Unsplash
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