Since April is Financial Literacy Month I decided to make my "return" to blogging focus on finances this month. After the end of the marriage I was left with all of the collected debt. I guess someone usually ends up with the debt, right? Lucky me. It was the price I was willing to pay to get out peacefully. My credit was the better of the two so most of what we had was in my name. Once again....lucky me.
I am the average "working middle class" woman in America and am not claiming to be a financial planner. What I did was pay off all of the marriage debt, credit cards, overdue accounts, etc. in five years without receiving a pay raise in three of those years. The first thing I did was to pull everything together and realize the amount of debt I was facing. Luckily, I have always been frugal. You know, what some people call cheap.
Step One: Get a budget (and know how much money you make)
Ah, that word budget. It might be uglier than cheap, right? It is a must. You must know what you spend and you must know where you spend it. My first response to a budget was, "But, I don't have any money!" You will be shocked at how fast a dollar here and three dollars there adds up. How much have you spent in fast food, a cup of coffee and the vending machine today?
You can find a few budget guidelines online for free.
This book is a great resource. I have listened to the author for years on the radio during my lunch break. He is the reason I bought my house and got out of debt. I will forever be grateful for finding his radio show. He shows you how to manage your money without changing your lifestyle. That was a big plus for me because I didn't have much left to cut back. If you have the chance to attend one of his
seminars, do yourself a BIG favor and go! Most of them are free.
I added
know how much money you make for a reason. You may say, "Who does not know how much they make?" I said the same until I went to a building wealth seminar and the question was asked. Only three people out of around 100 knew how much was in their paycheck. Amazing...how can you manage something when you have no idea how much you have to work with?
Step Two: Track Your Budget
What good is the best budget if you ignore it? Don't have the time? Well, you have a phone. Chances are it is a smart phone that you have with you all the time, right? Guess what? There's an app for that. I use the free version of
this one. There are many apps that track your expenses and there is a good write up on a few of them
here. There are always new apps available but bottom line is find one and use it. It takes about the same amount of time to make an entry in the app as it does to send a text. My main focus is four areas of my budget, food, gas, utilities and pet supplies. Those are my four areas that fluctuate so I try to keep a close eye on them. I use sub-groups to cheat the app a little because you can only track four "budgeting areas" in the free version of the app I use.
At the end of the year you can save a copy of your data and export it into excel to organize/manipulate it to see what you spend and where you spent it compared to your budget.
That is the beginning. A good first step. I have a few other things I have used over the years. More to come...
Until Next Time,
Peace & Blessings...
