Finance. Money. Bank Account.
All of these words used to (honestly still kinda do) make me feel uneasy. Money talk is sensitive. If you have a solid amount of money, you can be seen as bragging. If you are broke as a mofo like me, then you can be seen as asking for sympathy or hand outs. I'm here to shake that theory up.
It's embarrassing to go online and say, "Hey, I am only 25 and owe almost $25,000! Thats a grand per year I've been alive!" While it was hard to find the cojones to do this, I have so much more financial confidence now. It's been awesome to hear personal stories of how my saving is encouraging others to save as well. It is also incredibly empowering to not have to check my bank account every five seconds because I already know the balance.
While not everyone can go on a Spending Freeze, here are 10 ways to squash those financial fears and create stable financial habits.
1. Budget: Making a budget can seem scarier than going to the dentist, but it's a requirement. For those of you who are creative, free spirits like me, this can seem suffocating. Who wants the boundaries of a budget? Aint nobody got time for that! Well, put your big kid undies on, suck it up and start a budget. If you have no idea where to start, Dave Ramsey has great worksheets that can be downloaded here. Those worksheets seem a little intense for my taste. If you would like a more relaxed version, shoot me and email at firstname.lastname@example.org and I'll pass mine along.
2. Open Mail: Okay, I get it. Everyone hates seeing that credit card/student loan bill in the mail. I have to admit that in the past I would literally walk the bill from the mailbox to the trash. How much interest does your credit card charge? Has it gone up? Has your loan company sold out to another company with new terms? Open your mail and face facts. Knowledge is power.
3. Financial Fidelity: I'm not married nor do I share a bank account with anyone. But I do have family and friends with joint accounts and I encourage everyone to maintain financial fidelity. You would (hopefully) never cheat on your partner so why would you steal money from them? Sure, it's your money too but finances are the number one cause of divorce. Respect their money and the boundaries that come with that. Stay loyal to your budget, communication and bill payments.
4. Get real: I happen to live with my boyfriend and being honest about my financial situations has been one of the hardest things for me to face. Sure, he knew what I made hourly but I rarely told him about bills or how much money I had in my account. I figured that as long as I'm paying my half of the bills then that should be good enough. I have found though that after telling him about my Spending Freeze, it's (obviously) easier to suggest cheaper fun ideas. Being honest with your partner/family/self is tough and scary but in reality, they probably don't care that much. You're doing yourself a favor by getting that monkey off your back.
5. Know Your Score: Credit scores are scary, mysterious things. Well, actually they aren't. If you have no idea where you stand on the credit scale, check out Credit Karma. This free, online resource is my new B.F.F. It is a secure website that has been featured on multiple Finance sites/shows. You log on, enter your debt info and it connects with the lenders and generates your credit score. The site also has various generators that have been pretty helpful. One is a debt repayment generator where you can put in the debt total, interest rate and amount of time you wish to pay it off within. It will generate the monthly amount you need to pay to achieve your goals. Its also had a credit generator that simulates how your credit score will change if you did various things like pay off credit card balance or open a new loan. This is a huge source of motivation for me and I encourage everyone to try it.
6. Create Goals: You know that whole, "you miss 100% of the shots you don't take" saying? It's true in every aspect of life. Create a financial goal and envision your life once that goal is met. Look how happy and debt free you are! Look how happy your kids are in college! Make and goal and shoot for it.
7. Find Accountability: Find someone who knows more than you do about finances and secretly make them your Guru. If you are accountable to someone then you are less likely to break your own rules. This works in all situations. If you're on a diet, you're accountable to the scale and you know to put down the cookies. For me, I chose this website as my accountability. I don't know how many times I've wanted to cheat a little and buy something extra on the side (*cough *cough nail polish) but I didn't because I knew I would have to give updates and totals online. Even if it's as simple as getting a calendar and writing how much you save every day. Find a source of accountability and power forward.
8. Build Your Safety Net: It has been proven that women are happier when they feel financially secure. I feel like this is a no brainer and all humans are happier with money but apparently money affects us women more severely. We like knowing there is money in the bank (shawty what you drank). Dave Ramsey says to build an initial emergency fund of $1,000 and then focus on paying debt. Whatever savings goal you set, stick to it and build up that safety net. Skip the coffee and put that $5 in the bank. The small changes add up.
9. Uncover Confidence: You're smart. You can do this. So many people think about money and get overwhelmed. Annuities? Roth IRAs? Yes, these things exist and you should know about them. Go to the library and check out some finance books. Super lazy and don't feel like leaving the spot you are currently reading from? Go online and search financial trends. Why trust your money in the hands of someone else? Educate yourself and take action. You got this champ.
10. Don't Give Up: Today is a new day. You're going to make a budget and suck at it. You're going to mess up and buy that soda/coffee/fast food/unneeded item so chalk it up to a learning experience. I spent money on Valentines Day that I "shouldn't" have spent. I chose to do some nice things for my man because he puts up with me and makes me laugh and I'm grateful. I also bought a few small things like pizza or $2 Goodwill pants (that are awesome). Yes, I messed up. But I am learning to be patient with myself. My poor spending habits didn't happen overnight and starting a Spending Freeze isn't going to go perfectly the first month. With each extra expense, I get more motivated to stay on track. If you over spend then sit down, re-budget and move forward. Eventually saving will become more natural and spending will seem so unpractical.