Since starting my business, I have talked to a lot of people from all different walks of life. It has hit me hard realizing how many people out there are financially hurting. In fact, 2014 statistics say the average American family has $15,480.00 in credit card debt alone. Having stated that, my husband and I almost went bankrupt 7 years ago. Creditors kept giving us credit when we needed more and it turned into a snowball effect, borrowing from one credit card to pay the next one and having all those cards and loans becoming bigger and bigger and getting no where but further in debt. We had 3 children at home and I was a stay at home mom. I had no school degrees under my belt, so for me to go out and work for a minimum wage job and pay daycare costs wasn’t an option. So I started a home business that I had invested over $5,000.00 into. I was desperate to try and help my family get out of the mess we where in. I put everything I had into this business and needless to say, I didn’t make a dime. We ended up losing our house and found a place to rent for a few years till we were able to get back out there. What a depressing and stressful situation it was.
I get so frustrated now when my husband and I are in a bank and they can’t understand why we don’t have credit cards and loans. They are always telling us that we should have a credit card or line of credit or bank overdraft. They treat you like your not normal if you don’t have all these resources of credit for that ‘if you need it’!
So how did I change my financial mess?
Here’s some rules I live by to get where I am now:
1. Create a budget. My husband and I sit down together every week and pay the bills first, decide how much that week should be put into a savings account and how much we can have for ‘fun cash’, even if it’s only a small amount.
2. Save $1000 immediately for an Emergency Savings Fund. (for those unexpected car fixes or house issues that arise.)
3. Pay off debts, from smallest to largest. AKA Debt snowball
4. Put 3-6 months of expenses in savings. It’s always a good idea to have this to lean on if something happens to you and you can’t work.
5. Pay off house early. Even if you put a little more money towards your mortgage payment every week or month. You will be surprised how much of a difference it makes.
6 .Save for your kids college.
7. Build wealth and give.
None of these steps are possible if you don’t make some changes in your spending behaviour along with bringing more money into your budget each month. It’s not always easy and it takes time, trust me. But never give up and keep plucking away at your list. Work hard and stick to you goals. It will be remarkable when you look back in years to come!