Did I not just give you money to get your laptop fixed three months ago?
Yes, Mother, you did :)
Hi, I'm Kate. I'm a recovering overspender and shopaholic. I gladly and proudly admit that I am rising from the ashes of an overspender's cremation. It's funny to imagine this, but four years ago right now, my and my husband's finances were better than they've ever been. Things didn't begin to slip until I lost my job and had our son shortly after just two years ago. Since then, I've been building back up, pretty much from the ground (or perhaps the pits of financial hell). I would say we hit pretty close to the bottom in the summer of 2015, but things were much better when I returned to work full time as a teacher that fall.
As you guys know, my venture back into teaching, what I'll always consider my fourth year, didn't last very long, but thankfully, I began my adventure with ItWorks shortly before quitting my job in the classroom. You want to talk about the Lord's blessings? ItWorks immediately was there to pick up the slack from quitting my job so that we didn't get even further behind.
In complete honesty, it's been uphill from there. It's not always easy, nor is it fun, but I am most at ease with my finances when Vaught's dad and I sit down, write them out, and decide where and how we can improve.
If I could go back to being eighteen years old, here's the best budgeting advice I would give college freshman me.
1. Stay away from credit cards. Credit card debt is not sexy, and it's hard to get out of. If you absolutely must, get one card with a low interest rate and low limit ($500-$1,000). Charge a tank of gas or a snack to it once a month so your card stays active (perhaps pay a small bill too if it's helpful at a certain time of the month). The second your credit card bill comes in, pay it off. Completely, if you can. If you can't afford to pay it in full for whatever reason, aim to pay at least double the minimum. I know it sounds horrifying, but don't just pay the minimum.
2. If you must have credit cards, keep the balance on them at 30% of the card limit or below. I'm serious. If the card limit is $1,000, aim to keep the balance at $300 or less (refer back to number 1). But if at all possible, don't rack up a bunch of credit cards.
3. Keep a checkbook and keep it balanced. No one taught me how to do this until my mother sat me down and did it herself towards the end of my senior year of high school (that's how she found out about the tattoo on my left ass cheek, too. "Why is there a $75 debit at Oxford Ink??" Awkward).
I cannot stress the importance of writing down your bank account balance and keeping up with every transaction processed through it, even something as small as $2 spent at the convenience store. It will save you a lot of trouble and senseless anxiety to always know what's in your bank account!
4. Start saving and start small. It's completely understandable if thinking about starting a savings accounts overwhelms you or freaks you out; it did me too. It took me years to finally open an account strictly for savings. That's why when I did, I started small. I used an old coffee tin to put loose change and dollar bills in. After a couple months, I had more than $50, and I knew it was time to open a savings account! I called around to find one with a great interest rate (make money while you save money, right??) It took about twenty minutes to open my account and the rest is history... Sort of.
5. Designate a percentage of your paycheck to put in savings and put that percentage in there every single pay period! My personal preference is at least 5%. If I make $2,000 a month, for example, at least $100 is going into my savings account. That money is there for me to use in case of emergency (things happen), or to dip out of if unexpected expenses comes up (again, things happen).
6. Pay your bills on time. Not only is this good for your credit, it's good for your conscious. There have been times where paying every single bill on time didn't leave us with much left over to make it to the next paycheck. Although it sucked sometimes, it was always worth it to know we were in the clear. There have also been bills that I've pushed to the backburner to make room for the extras... That sucked even more. Don't do it. Bill comes in mail, pay it. Immediately.
7. If you need help, ask for it. I don't mean asking your parents to spot you because you blew all your money on GNO (I don't know that from experience or anything), but if a monthly expense is becoming unmanageable, see if there's a way it can be lowered or even eliminated. My DirecTV bill became far too high for me to pay every month a couple years ago. Lowering it was as easy as getting online and chatting with a representative who helped me take $25 off of it without eliminating any of the channels we love. When our Verizon bill was upwards of $500/month, we made the decision to switch to Sprint and saved $300/month (seriously). If you must ask to borrow money from family for any reason, do it respectfully and make a plan as to how you will pay it back.
8. Do not make any big, financially-binding decisions until you're ready. Whether buying a home or a car, don't do it until you're 100% certain you can foot the bill each month. I never dreamed that when I bought my house, I'd be jobless less than two years later. I'd also added two vehicles to my name during that time, which put even more pressure on me and quickly began to affect my credit. Think these big decisions through and learn as much about the process as you can.
9. Eliminate small, unnecessary expenses. Starbucks every morning. McDonald's everyday at lunch hour. You may only be spending a few dollars at a time, but making your coffee and meals at home and taking them with you will save you hundreds of dollars every year. I used to go to Starbucks every single day until I did the math on how much I spend at this over-priced (but freaking amazing) coffee chain and realized I could be putting an extra $100-$150 in my savings account without it. Now, Starbucks is a once or twice-weekly treat. Okay, three times if I'm feeling crazy.
10. Get some goals and make them happen. Another reason I absolutely could not remain in education? There's little to no money to be made, and you can say what you want, but it's the truth. I hated the idea of my salary being only a handful of dollars higher each year, so I opted for something else. Let me just add to this that money isn't everything and I value time with family and friends and making memories over any dollar amount, but I do want to know that I have funds there if and when I need them. I want to travel some day, and you need money to do that. I want to have money to put down on a new home when the time comes. I want to buy my mom a new vehicle and maybe some farm equipment for my dad, silly as that may sound. I love giving to charities and my church, and I never want to not be able to do those things.
Maybe I don't have it all together, but I'm well on my way and have learned so much about my finances in my "adulting" experience so far. My hope is that maybe you've learned something here you can apply to your own situation too!
Thanks for this. Very much needed.
ReplyDeleteYou're so welcome, girl! I'm glad it was helpful!!
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