Paying Debt & Common Sense

Debt, Financial Boss Series, Minimalism, Minimalist, Money

Wouldn’t it be perfect if we didn’t have credit card debt, could live a passionate life, and be generally awesome?

One major focus of mine is paying off debt. I’m no guru, but I have recently changed my strategies and have let go of fear. I have become my own Financial Boss and put the responsibility back where it has belong all along: to me, the Boss.

I’ve done a few things that I want to share:

  1. Admitted I am severely in debt and need to change that now.
  2. Opened my mind, let go of fear and adjusted my strategies.
  3.  Stopped useless spending.

But there is one thing that I think is most important of all when paying off debt and it’s really simple:

Use common sense.

I saved nearly $8.50 on one grocery store purchase today using that philosophy alone. Want to know how?

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By not buying mixed nuts with a black label that only used the words ‘Premium’ and ‘Deluxe’.

Excuse my sarcasm (not really), but who would buy that, I thought? Then I was mad at Publix for putting an outrageous pricetag on nuts in the slightest, tiniest, bit larger can than the one it sits next too.

Then I thought…

Well, clearly people are buying it! Why?

I just…I can’t.

We all need to be sure to keep our eyes open for ridiculous marketing strategies. It’s us against them. It’s easy to fall prey when we shop. It’s important to know our values and follow through with our dreams and not let silly obstacles get in our way of being who we want to be. It’s important.

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Financial Boss: Part 4

Clarity, De-Cluttering, Debt, Financial Boss Series, Gentle Change, Money

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After a long time of digging deep into my financial dependence, and auto-pilot behavior the day had come to come up with a budget and game plan. If we continue to do the same thing over and over we will continue to get the same results.

Well, I don’t like my results.

That means that I have to change how I do things. This can be super scary, but in order to move forward and have a chance for success, we must take risks to get us where we want to be.

I have determined that I have been on auto-pilot allowing my money to rule me instead of me being the boss.

For me to be the boss, I had to take the initiative and create my own financial plan.

My goal is that every month I will be telling my money where to go. Period. 

My plan started after I de-cluttered my wallet and credit cards. I cancelled every unused credit card account. Then, I had a shred party where I disposed of those soul-sucking colored pieces of plastic. Some financial gurus say you still need to keep your unused credit lines open because if you don’t it will hurt your credit score. Well, I have a secret:

I do not care. I want them gone. My credit score doesn’t define me. And, I’m giving up credit cards all together when I pay off the last of my debt. This means that my credit score is not a factor in my money or how I live my life. My credit score no longer rules me either. I rule it because I am the boss and am handling my imaginary “credit score” as if it doesn’t exist. Because from now on, I will pay upfront for everything I want or need. 

I’m not scared anymore. I am angry. I am angry because the little score that pops up took me 20 years to create a ‘green colored’ number. I stressed, fretted, and had anxiety attacks to keep it there. Then, outside of my control, I got laid off from my job and within 2 measly months my credit card number is now ‘red colored’ and it is designed to make me feel bad.

So, if you want to do something drastic just like I am; you have to be ready and willing to let go of a lot of your predisposed thoughts about money.

I totally am, so that’s why I am doing this. And secretly, I know that my credit card number is going to quickly increase back to green without any of my mental chatter and obsessions about ‘keeping it at the top.’ And that’s fine. It’s just a weird game to play anyway and I’m not playing anymore.

My passion from opening my mind and looking at my finances with a new outlook made me motivated.

I grabbed a sheet of paper, a pen, and a calculator and got to work.

Previously:

My bills were auto-payed out of my checking account every week, whatever their due date.

My income is consistent weekly so I get paid a certain day every week.

I ball-parked estimated what discretionary money I had each week for gas, groceries, and anything else I wanted.

Nothing into savings, and nothing left over at the end of the month.

Now:

do not auto-draft. Ok, this is a big deal to me because I have ALWAYS auto-drafted. Now I am in control of paying my bills individually.

I pay my bills the first week of the month. Every single bill that is due that month is paid in the first week. So right then and there I am current.

I have three banking accounts:

  1. Bill account
  2. Spend account
  3. Savings account

Bill Account: I have figured up how much I owe each month in fixed bills. I divided them up weekly. Every pay day I put that amount into my ‘bill account.’

Spend Account: This is the amount of money I can spend on gas, groceries, and anything else I need/want. I have figured out how much I will allow myself and will deposit that amount into this account.

Savings Account: I have pre-determined how much I will save each week. I will be paying myself now. This amount will be deposited into this account each week on payday.

This way, at the first week of the next month, my ‘bill account’ will have the money need to pay my next month’s bills. I will then use that money to pay bills the first week of the month.

I have a separate debit card for my spend account. This will be the only debit card I use for purchases.

My savings account is going to grow really quickly. I will be using money here to build my emergency monies and pay off current credit card debt.

The formula is simple (and I am no math whizz that’s for sure!)

  1. Add your monthly fixed bills (car, house, insurance, credit card payments, etc.) and get the total. Divide by 4 (4 weeks in a month).This is the amount that you need to put into your ‘bill account’ each week.
  2. Determine your spend account. This is the amount you have to spend on things like gas, food, snacks, clothing, or whatever is not a fixed expense. Set a cap on it and divide by 4. This is the amount that goes in your ‘spend account’ for the week.
  3. Whatever is left over goes into your savings account. I am separating my money among these three account on payday which is the same day every week.

This is my new, drastic way of telling my money where to go. When I do the math and split my accounts this way, I have plenty leftover for my savings. I have savings because, well…you never know what can happen and I don’t plan on working in a career for someone else until I’m old, feeble, and dead.

There are a billion different ways to handle your finances. There are spreadsheets and programs and so many opinions.

I am not at all saying this is the BEST way to handle finances; it’s just the best way for me now.

Are you in a financial crisis? Do you hate the way your finances are ruling you? Is it time to be the boss? If so, and you are prepared for action, discover why you do the things you do, behave the way you behave, then for god sake grab a pen and paper and get to work!

I wish I had done this sooner. I really, really do. But there is no better time than today to be the person we want to be. And sometimes, that means a drastically different approach to something and an open mind.

Financial Boss: Part 3

Financial Boss Series

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This whole Financial Boss serious came about because I got to a point of ‘enough’ when it comes to my money managing me, and not the other way around. I couldn’t come up with a good excuse anymore as to why I keep allowing that to happen.

Living on auto-pilot can seem alluring and easy sometimes, but in the end important things can be neglected. I know this because I’ve been on auto-pilot for many years, skimming by. My focus now is to live an intentional life;

an intentional life in everything that I do.

So, because that is my core it is no surprise that my auto-pilot money management needed an over haul. Hence, becoming my own Financial Boss.

In Financial Boss: Part 2, I gave a quick glimpse into my credit and money spending history. It’s not a shocker, but it reveals a lot about how I’ve justified being on auto-pilot.

Discovering how I actually behave when it comes to my money was my starting point.

  1. Financial Behavior: Auto-pilot; includes auto bill pay, making minimum credit card payments, not paying attention to my interest rates, and putting no thought into how and where I spend my money.

Now that I have defined my behavior, I needed to discover where I spend money:

Hint: It ain’t pretty.

I’ve been ignoring my credit card interest rates. My statements are all online. I know my minimum payment, so I just have it auto-drafted. I’ve been afraid to face the nitty gritty. So, instead of taking the time to know the truth about my financial situation: I’ve turned a blind eye.

When we do that, credit card debt never ends.

Here is an example: My Target credit card has a 22.9% interest rate. I pay the minimum payment of $27.00 a month. That means that I pay WHAT I OWE (principle) $9.37 and Target credit gets $17.63 of that in INTEREST.

I don’t know about you, but I am not OK with that anymore.

That’s stealing and robbing from me, People!

Every dollar we hand over to a company is a way that we tell them:

I support you.

I support your business practices.

I support your mission.

I support every thing that you stand for.

I am OK with giving you my hard earned money for your product/service.

My motivation for paying credit card debt is simple:

I do not support their business practices. I do not support their mission. I do not support what they stand for. I am not OK giving them 3 times what I paid for an item.

Now that I am fired up I can move forward. I will not give them another dime after I pay off what I currently owe (and I’m going to pay it off quick). I’m totally withdrawing my support from credit card companies because it’s straight-up stealing from me; and it’s stealing from you.

My mind is made up, there will be no turning back.

My wallet would barely close when I started the process because it was so full of plastic. Cards that I don’t use anymore, duplicate cards, and active cards.

I pulled them all out and laid them on my desk to get the full visual of what I’ve been doing.

It was messy, scary, and quite honestly disgusting. I asked myself how I ended up with credit cards from so many clothing stores. Is it because they promised $10 off? Did I get scammed by advertising and my auto-pilot behavior?

I spent a few hours on the phone calling every single unused and duplicated credit card company. And it was really simple:

I closed my accounts.

They all tell me that they hate to lose me as a customer. What? I can still shop there, just not on high interest rates from credit cards.

I did leave 3 credit cards open only because I’m still paying on them, but as soon as they are paid off, they will be closed as well.

My favorite part of closing my accounts?

STICKING ALL THAT PLASTIC THROUGH THE SHREDDER.

By de-cluttering my wallet and getting rid of unused accounts I can now laser focus on what I have left without distraction or guilty feelings about my past.

So, if you are interested in getting off of auto-pilot and becoming your own intentional boss, I would encourage you to spend some serious time thinking about it before tackling it.

Ask yourself these questions:

  1. What is my financial behavior?
  2. What don’t I like about my current situation?
  3. How does it really feel to not know where my hard-earned money is going?
  4. What businesses am I supporting by giving them my money?
  5. Am I really OK with paying that much in interest rates on credit card purchases?
  6. Am I willing to take a risk in changing my strategy?
  7. Or, am I completely content with where I am?

I feel these questions are really important. I spent A LOT of time asking myself each and every one of these. My answers were clear:

I haven’t been happy. I am not OK where I was. I am ready to take a risk and simply change the way I do things.

I’m excited about Part 4 of the series. I’m going to reveal to you the differences in my past financial management, and my new one.

Spoiler alert: It’s nothing intense or drastic: just a little different, but will pay off much better in the end.

Financial Boss: Part 2

De-Cluttering, Financial Boss Series, Free Spirit, Gentle Change, Hippie Life, Hippy Life, Letting Go, Minimalism, Minimalist, Money, Simplicity

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This is Part 2 of the Financial Boss series.

Within 24 hours I went from reactive to PROactive about telling my money where to go.

Because there are so many internet articles on how to budget, and how people deal with their personal finances, I want to tell a little bit about my history.

I opened up my own checking account when I was 19. Before then, I only made a little money at odd jobs and spent it all on clothes, of course. With time, my account would fill up with money, whether from work or from student loans through college. I never had a budget, I just knew I would be getting this much and could only spend so much.

This left my account empty for many, many years.

As I got older, I started working full-time and slowly began making more money, but also paying bills. I got a car, student loan debt, cell phone, gas, and insurance. I managed my bills the same as I always did: I received so much money a week, and owed so much money a month. I just knew not to spend more than I made.

Easy enough.

Then, time went on and I switched careers, got married, had a baby, and bought a house along with more bills on top of my ‘early years’ bills. I continued making more money, but increasing the money that I owed by buying more stuff. At this point, my credit card debt was minimal, and if I ever used credit cards, I paid it off quick. I knew how much I made, how much I owed in fixed bills, and then I wouldn’t charge more than I could pay off quickly to credit cards.

Insert AWESOME credit score here.

I didn’t have a hardcore budget in place at this time. I just made sure I wasn’t going in the hole. This made it possible for me to pay all my bills on time, with just enough discretionary to get what I needed. However, no money was leftover at the end of the month and I had no idea where my money was going. But, I continued on in a reactive approach. My bills were autodrafted on time, and I just didn’t spend a lot on frivious things. Still, I had no idea where my money was going. I just knew I had zero at the end of the month and nothing to save.

Insert JOB LAYOFF here.

Oh man.

I got laid off last year. Since my finances were stretched to paycheck to paycheck I certainly couldn’t pay my bills. I don’t know if you are familiar with unemployment income…but it’s not enough to pay the basics such as a mortgage or car. It’s better than nothing or you would surely starve to death, but beware: if you have debt over $800 a month you are about to spiral down to a hot mess just like I did.

Insert CREDIT CARD purchases here.

Because I couldn’t afford diapers for my child.

Now, this is extreme and I don’t take fault for this part, but it changed the way I view my current expenses.

Insert TRASHED credit score here.

If we are not prepared for the worst, the government will not cover your expenses even if you live ‘modestly’ as I do. By modest I mean: a modest house, car, and insurance. Forget it.

So, I am now trying to pay off my debt, reduce my expenses, and find out ways to survive on my own should this ever happen again. Like, gardening, savaging and the like. Sounds extreme right? Well, not really.

What would you do if you lost your job? Or, if you stay home and husband/wife supports the fam, what would you do if he/she left?

It’s something to think about, for sure. I always put those thoughts out of my mind so I wouldn’t be scared about my future.

But if disaster strikes, we need to be prepared.

This is what inspired me to boss my money, instead of letting it take on a life of it’s own without my direction.

Part 3 will discuss my first steps in de-cluttering my wallet/credit cards and getting a game plan in order.

Financial Boss: Part 1

Clarity, Debt, Financial Boss Series, Free Spirit, Gentle Change, Hippie Life, Hippy Life, Minimalism, Minimalist, Money, Simplicity

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It totally happened yesterday.

I am now in charge of my finances aka THE BOSS.

Financial advice is totally rampant on the internet because so many of us live reactive to our money.

I want to share with you how I went from reactive to proactive in 24 hours. Sounds to good to be true? Well, it is and it a’int. It was a long day yesterday getting my finances in order:

but I went to bed PROactively in charge of my money last night. 

I’m going to break up this explanation in parts because it is a little lengthy. I want to share my personal history and background and then tell you how my strategy changed drastically.

It’s not a magic potion or fix-all. It’s just a financially lazy, simple girl’s way of shaking up the way I do things and TELLING my money where to go.

You may be in the same place, but scared to make a change. It is kind of scary, but when you have your mind made up that you must do things differently, take risks, and are in an energetic, positive mental state: It can be done.

So, follow along if you want to hear about it. It’s time for change and it’s time to be the boss.

For starters:

That picture above was my stack of credit cards as of yesterday. Wow. Let’s just say that it has reduced drastically as of today, only 24 hours later.