No one likes to talk about debt and how much debt they may be in. We most times want to close our eyes and just hope they will take care of themselves, but we all know that is not true. For most of us, we can swiftly state our monthly debt payments with ease one bill at a time, whether it’s the car note, phone bill, daycare, rent/mortgage, and utilities. Those are all things that we you can probably say off the top of your head. But when it comes to the total amount of debt you owed? Many people don’t know or don’t care to know.
You might say, “Why does it even matter”? It matters because the total debt amount is what is keeping you living from paycheck to paycheck and unable to do things you would like to do in life (without restraints). If you haven’t added up your debt, you probably have not created a plan to get out of debt. To change your habits, you need to see what the big number is.
Tackling debt starts with writing it out or writing it down. Making a list of everything you owe, whether it’s mortgage, credit cards, car notes and even student loans.
Start by writing out the following:
1. The lender name
2. The amount you owe
3. The term of the loan/debt
4. The interest rate and fees
Then total them up. Sort them from the smallest amount to largest, or you can sort them by the length of time left to pay the debt. This will give you an idea of how much debt you have, how long you have to pay debt and possible ways to attack them. This is something that people do NOT like to do, but doing this is a necessary step to give you a complete look at all debt.
Once you’ve tallied the totals, you can create a plan for getting out of debt. Please don’t underestimate the power of a plan. “Debt avalanche” or “debt snowball” are two of many methods that can be used to implement a plan to get out of debt. Don’t get weary if it takes some time. Just like a diet, you didn’t get in debt over night, so you most likely will not eliminate debt over night (unless you win the lottery).
If you’re having difficulties figuring out where to start or can’t do it on your own, you can seek help from a credit counseling agency, financial planner or money coach, or even a bankruptcy attorney. With a plan, and guidance if you need it, hopefully those fuzzy numbers will turn into a clear plan — and you’ll have a get-out-of-debt success story to share!
Cicely Jones is the owner of MPA Financials, a Full Service Accounting Firm with 15 years’ experience. Cicely has a passion to spread knowledge of financial empowerment by educating clients and giving sound financial advice.
Being a single mom most times does not afford the luxury of having additional funds, that’s a heavy burden when everything is solely depended on you. Single mothers carry the responsibility of taking care of the household, paying bills, grocery and clothes for the kids, and just MAYBE trying to save if anything is left. Child Support, Alimony or Government Assistance is not something every single parent receives to help, so it can be hard to be prepared for emergencies and save for a rainy day.
If you don’t have an emergency fund for unplanned events, you’ll most likely have to borrow the money or take money from a responsibility you already have. You know what that means? That means you’ll end up in more debt! Building an Emergency Fund will help you from incurring more debt but also create foundation of financially stability.
No two people have the same financial situations so your strategy to build an emergency fund should be catered to just your life. Most say an emergency fund should be the equivalent of 3-6 months’ worth of living expenses in cash or liquid assets; that consists of paying for housing, food and necessities at least. Or a better way to decide how much to store in cash is to think about how much of a cushion you would need if you lost employment for a few months.
To start saving, you must know where your money is going. So your first step is to create a budget or write down all of your income and all of your expenses for a month. Having those numbers in front of you will show you exactly where your money is going and the areas that you are spending too much money in. Know your monthly expenses will allow you to calculate your monthly take home pay. If your expenses are more than your income, your priority needs to be getting the two in line. You need to either cut your expenses, earn more money, or do both.
The most difficult thing at times is starting. You’re saying, “But I don’t have it.” I’m saying, “Have you tried?” Just start. Don’t overthink it. Just start small and do it. Even if you start with $10-25 every month or every time you are paid, guess what? If you are diligent, it can add up. Looking at a huge number of thinking you need a $1,000 saved up is scary and seems farfetched. But if you change your perspective and break down the savings goal to monthly seeking smaller amounts, it will become easier and less scary to start.
Save loose change
An easy way to save without much thought is to save loose change. Ask the family to collectively contribute any loose change from their pockets daily. To speed up the savings, include loose one and five dollar bills. Doing this daily will add up but should be your only source of saving.
Planning is a key component to saving money. Planning your day, meals, events, trips, etc. can all become cost effective measures that can potentially save you some money vs spending more money. This can cut down on gas expenses from unnecessary errands and trips, to planning your lunch for work and not eating out wasting money on food. Planning your meals ahead of time allows you to better plan your grocery list, which will also allow you to not waste funds on unnecessary items in the store.
Unplanned events are almost guaranteed to happen when least expected. So having a cash cushion accessible in case of emergencies is important. This may cause for a little sacrifice but it will prepare you for some unforeseen occasions that can cause additional financial strain. Being a single parent sometimes means it’s all on you. So why don’t you go ahead and be prepared.
Seems absurd right! Yeah, and so does living paycheck to paycheck seem to be so normal.
It doesn’t have to be that way, yet 71% of moms are in the workforce, and half need an additional income of what they already bring home. Women in the workforce and education levels have increased significantly and this shows that highly skilled women fleeing job opportunities and juggling family are becoming more and more obsolete.
Sarah Titus was left with just $5 to her name, the kids, no gas and homeless when her ex-husband just took off. She had to figure it out all on her own. And she did by selling free items from eBay and Craigslist. She was making $700 a month then $1500. Her inside drive led her to – read the story here!
I love cooking. I don’t always like the help.
But I enjoy special moments that I can share with my kids. I love being my child’s first teacher because they are like little sponges and soak up so much information that can be carried throughout adulthood. I teach them manners, ways to make and save money, chores, so why not teach them how to cook. Now before you think of all the harmful things that could happen, like cutting their finger or placing a towel too close to the fire, think of what you’d actually gain.
Casey Seidenberg shares with the washingtonpost.com that teaching kids how to cook allows room for mediation, learning money management, and resisting technology. Now during the school year, this may seem a little far fetched due to a demanding schedule, but saving your kids from a lifetime of unhealthy takeout starts – to read the full story, click here!
A trip to the grocery store to pick up a few items can go a long way. Sure, you’re tired, don’t feel like dragging the kids with you, you can stop by the store tomorrow (yeah right) and a quick stop by your local restaurant where kids eat free sounds ideal, but you’re only cheating yourself. And it’ll cost you more in the end.
On your next stop to the grocery store, pick up these few items and see how you could plan modest meals by sticking to a more healthy diet AND keeping your weight down (if this isn’t HARD already). To begin, you’ll need butter, eggs, avocado and … to see the full list, check it out here!
For more great ideas, visit chasingfoxes.com