Are you struggling to make your budget work but keep coming up short?
If your budget isn’t working, you might think that you’re just not trying hard enough to stick to it. But I don’t think that’s always the case.
Recovering From Crisis: What You Should Avoid
In November of last year I was faced with moving into a hotel until I could pay off some debt and get approved for an apartment. It was a struggle and one of the lowest times of my life. I lived there for six months! While I was there, I was able to pay off some debt and finally save for the moving expenses to get myself into an apartment, which I’m now able to call home. Though things are certainly better than they were, I’ve found that recovering from crisis can be just as difficult as the crisis itself.
Recovering From Crisis
You would think that the time after crisis would be the best part but you’re getting used to living in life… without crisis. You’ll need to adjust different parts of your life to make sure that you are still on the right track, financially and mentally. If you don’t, you run the risk of landing yourself back in a mess. So, what should you avoid when recovering from crisis?
- Don’t spend too much! Seriously. It is so easy to go out and buy all new stuff for your new place, start going out with friends or even buying yourself new clothing after you’ve climbed out of a financial crisis. Don’t! Of course, allow yourself some leeway but be vigilant about saving money and insuring that your crisis never happens again.
- Don’t buy anything you can’t afford. For me, this was difficult. I was moving out of a hotel room into a 2-bedroom apartment and virtually had nothing. It would have been easy to take everything out on credit and rack up debt but instead I opted for used furniture and gifts, which saved a ton. If you’re coming out of a crisis the last thing you want to do is send yourself back into one by being irresponsible with your money.
- Don’t confuse needs and wants. Do you need that 65” television? Probably not. Confusing needs with wants can send you down a rather scary financial path. If you are constantly buying things that you don’t need but want, you’ll wind up either really needing something or in debt getting the things you need.
- Which reminds me, don’t take on new debt. If you’ve just recovered from some sort of financial crisis don’t come out of it and open a new credit card account. Take a while, pay off some debt and establish a new financial routine. After you’ve gotten comfortable with your finances, then apply for credit.
- But also, don’t forget to have fun. While recovering from crisis is usually very serious, you need to make time for yourself. Don’t forget to spend a little money doing things that you enjoy, like going out with friends or seeing a movie every once in a while.
Personally, recovering from crisis has been trying for me at times. However, being able to build yourself back up will be the best feeling in the world! So, don’t give up and remember that there is a lesson to be learned through everything.
Have you recovered from a crisis (financial or otherwise)? How did you handle it?
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From Credit Card Debt to Loving Her Money with Sarah Li Cain
A few years ago, Sarah Li Cain found herself jobless, broke, and in $9,000 credit card debt after a breakup with her boyfriend.
Today, Sarah is debt-free, married, and living a happy life with her husband and spirited toddler.
Sarah is a freelance writer and illustrator. She believes in the power of storytelling and wants people to share their money stories to remove the stigma around money. An avid traveler, she believes that the way to a happy and productive life is to love your money and be compassionate when it comes to your finances.
I am so excited to share Sarah’s story and introduce her brand new book, Cha Ching! A Money Coloring Book.
In the interview, Sarah shares:
- The lessons she learned from racking up more than $9,000 in credit card debt from an unhealthy relationship
- How she paid off the credit card in less than a year
- Her advice to anyone currently in a similar situation
- How she’s using her experience to teach others to love their money
- And the message behind her brand new coloring book
Thanks again to Sarah for sharing her debt-free journey and her new coloring book with us! [bctt tweet=”How @sarahlicain went from credit card debt to loving her money.” username=”MonicaRLouie”]
Sarah’s brand new coloring book, “Cha Ching! A Money Coloring Book” is available by clicking here.
You can find out more about Sarah at HighFivingDollars.com.
Now I’d love to hear about you!
What did you learn from Sarah’s story? Have you been in a relationship that put you into debt? If so, how did you handle it? Please share in the comments below.
Have you joined our free community yet?
Join me in our private Facebook group called Your Debt Freedom Family, where we’ve got an awesome community of people who are kicking debt to the curb so they can break free and live life on their terms.
I’d love to see you there!
Keep moving forward toward your goals. You really can live the life you dream about!
How We Made $2,148.25 in EASY Money!
You and I both know that getting out of debt and reaching our financial goals is WAY MORE than just scrimping pennies and slashing our spending as much as we can.
Right?
Major Update On Our 2015 Financial Goals, Part 2
This is part 2 of 2 of our summer update. If you haven’t read part 1, click here to catch up.
In our disappointment, we scrambled to figure out what to do.
Our agent put our house back on the market, and we planned to have an open house that weekend so that we could encourage more lookers.
We had already locked in our rate with our mortgage broker so we only had a couple of weeks to find new buyers if we wanted to close on time and avoid being penalized for the transaction falling through.
And then something unexpected happened —
Why You Should Have an Emergency Fund (And How Much You Really Need)
An emergency fund is something we all know we need, but unfortunately, a lot of us don’t have any savings.
And if we do, we don’t know if we have the right amount.
Where To Prioritize A Personal Loan in Your Debt Snowball
Have you ever had a personal loan from a friend or co-worker?
I sure have.
It’s a situation a lot of people have been in, and it has the potential to destroy relationships.
Debt Update: June
It has been a little while since I posted a debt update on the site. As mentioned in my blog post “Is Your Outlook Holding You Back?” we’ve been able to pay down a significant amount of debt over the past year or so. Most of this has been done by snowballing our debt (to the best of our ability). Here’s a debt update with detailed numbers…
Debt Update
The major three things that have happened since our last debt update on the blog are…
- We paid off my husband’s car! That is $175 per month that we now have available to help pay off other debts.
- My N.C. state taxes has been paid off. This will free up about $463 per month.
- At the end of July, I’ll have paid off my higher-interest credit card. We’ve been paying $175 per month since April to get this done. So, the last payment in July will free up another $175.
Altogether, these three things will free up around $800 per month to go towards paying off other debts and saving.
On top of paying those three things off, we have decided NOT to pull out a loan for my wisdom tooth extraction. Instead, we’ve decided to save and pay in cash for it. With the additional $800 or so per month (starting in August), we should have the money to pay for that in the early fall.
Other “wins” when it comes to our debt freedom progress have been paying down the amount on my husband’s tool bills. Each of them has been paid down significantly each month. We should see them disappear in less than a year (nearly $600 per month). Now that a few other items are paid off, we should be able to reallocate the funds to get these paid off faster.
Earning Extra Cash
We’ve both been searching for ways to make additional money as we continue snowballing our debt as well. My husband has been picking up quick mechanic jobs within the community for extra cash (i.e. putting in a battery on the weekend, or jumping someone’s car).
I’ve been looking for things around the house to sell and picking up a freelance project from time-to-time. More recently, I discovered an old coal bed warmer we’ve had collecting dust. Online it says these can go for between $250 and $1,000. I’m hoping to visit an antique store and sell that soon. That extra cash will go directly into paying for my wisdom tooth extraction.
All in all, our debt update for June is looking pretty good. I’m happy about it and can’t wait to see how it progresses in the future. Of course, I’ll keep you all updated here.
Readers, do you have any easy side hustles that have really helped you decrease your debt? Let me know in the comment section below!
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A Pathway to Freedom
The following blog post is part of The Road to Financial Wellness blog tour. The Road to Financial Wellness is a three-month, grassroots campaign promoting financial empowerment on a national level and encourages people to pursue their dream lifestyle. Find out more about local events near you.
What were we going to do?
It hadn’t even been two months since my last day of work, and we saw that our savings we had built up to prepare for me to stay home was starting to disappear.
How to Stay Debt-Free
Becoming free of debt is no small task for most people but many have been able to do so. What a lot of people don’t talk about is how to stay debt-free after you’ve paid everything off. It’s not as easy as it seems.
How to Stay Debt-Free
I’ll be the first one to admit that when I think about having all of my debt paid off I start to think about the things I’ll be able to do, things I’ll be able to buy, etc. If you’re thinking the same way, stop! You won’t ever be able to stay debt-free if you’re constantly thinking about what you’ll spend your next bit of money on. So, how do you stay debt-free?
1. Create a budget and stick to it.
As a part of becoming debt free you probably had to create a budget. The best way to create a budget after becoming debt-free is to set a zero-sum budget (where all your income is spent one way or another at the end of the month). The money not being spent will go into savings (or debt payments if you still have them). Once you’ve set a budget, don’t waiver from it. That will only open a window for debt to get in.
2. Automate your finances.
Once you’ve created a budget, automate the rest. Set your bills to automatically draft from your account so that you won’t encounter late fees or credit score drops. You can also have your savings withdrawn from your paycheck instantly so that even saving money can be effortless. If you have to think about your finances less you’ll be less likely to create more debt.
3. Don’t live outside your means.
This is a huge point on the list of things you need to do to stay debt-free. Most people wrack up debt by living outside their means, buying things they cannot afford. If you continue to do this once you’ve become debt-free you won’t remain without debt for very long.
4. Hold yourself accountable.
Holding yourself accountable is another big deal. You may not realize it but if you have a lackadaisical approach to finance your finances may suffer. If you find yourself having trouble holding yourself accountable for financial decisions, chat with a friend you can trust and have them remind you have why you want to stay debt-free.
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5. Cut out temptation.
Another great way to stay out of debt is to cut out temptation. For example, if you have multiple credit cards consider cutting the ones you don’t need/don’t use. This will prohibit you from being able to use them for an unnecessary purchase.
6. Join a debt-free community.
If you’re searching for more support on your debt-free journey, join a debt-free community. The Saving Advice forums is a great place on the internet where many people collaborate on various personal finance topics, including being debt-free. There are a number of other great debt-free communities on the web as well.
7. Keep a reminder of your old debt.
Those trying to stay debt-free have likely already paid off a tremendous amount of debt. Keep a reminder of the absolute agony that was paying off your debt. To do this, some people have framed loan payments, loan amounts, statements, etc. You can also simply keep a reminder somewhere you look often (like a desk drawer).
8. Celebrate sometimes.
Lastly, if you’ve paid off a lot of debt and are living a debt-free lifestyle you deserve to celebrate sometimes. To maintain a debt-free lifestyle you need to allow yourself some wiggle room from time to time, so remember to enjoy yourself! A bit of comparison shopping or finding a good deal will also make you feel great and reinforce the savings process.
Are you maintaining a debt-free lifestyle? What’s your secret?
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