It took until recently (and a nice bump in pay) to finally come to terms with my finances. I, like many others, went through the college cycle. I’ve got those student loans mixed with medical debts. At one time my credit score was in the 300s… yikes.
Things are getting on track.
I’ve been able to pay down a lot of my debts, recover my credit score, and even put money toward retirement investments and trading accounts. A lot of this I chalk up to better work but even that didn’t come about until I got my head straight about my budget and lifestyle choices.
It Started by Downgrading
I admit – I lived outside my means (for pretty much all of my 20s).
· Partied too much
· Kept up with trends
· Held off on paying debt
It was becoming a house of cards which came crashing down a few months before my 30th birthday. I promised myself I wouldn’t treat my 30’s the same – it was time for a change. That change came about when I did a full assessment of what I owned/subbed to and decided to minimalize and downgrade.
Entertainment was one of those big expenses.
1. Cable and Internet packages were eating up a big portion of my budget, which made me choose DirectTV as an alternative (since I was already selective with my viewing).
2. I decided to take cooking courses, so I could make great meals at home vs eating out or ordering which also aided with improving my overall health.
3. Most stuff went to Goodwill because it was bringing me down just from the sight of it; I set up a minimal living space that I’m happy with that also stops me from buying stuff I don’t need.
I challenge anyone reading this to do the “one-month check”.
Look at what you have and ask if you’ve used that item/service in the past month. No? Then you probably don’t need it. Downgrading your lifestyle does wonders for freeing up income – I ran the numbers, I’m saving about $3-400 a month!
Then it Went to Long-Term Gains
With things stabilized, I forced myself to do what I dreaded the most… pick up the phone.
I called the issuers for:
· Student loans
I had my first, real adult conversations with these people letting them know my situation and creating a plan to either fix the problems or get them on track. It had me obsessively researching the best ways to negotiate with these people along with making plans for big moments throughout life (ones I didn’t care much for in my 20s because I was partying too much).
The big moments we’re probably all bound for include:
… And, of course, our eventual passing (which even got me thinking about life insurance).
I was able to negotiate a lot of the debts. They became manageable with my budget and lifestyle. This allowed me to make those all-important on-time payments to build my credit score – and ultimately my financial confidence. A confidence that let me double down on my savings and money-making efforts.
Now I’m (mostly) on track with the big-ticket items.
There’s still a long way to go but I’m in a way better position than I was at. It makes me realize all these years reading money and finance blogs are starting to pay off (literally).
How You Can Save/Make More
I could give you a laundry list of money-saving tips, but you’ll probably just skim it.
Instead, focus on two big wins:
1. Increase your earnings by negotiating a raise or starting a side hustle
2. Call and talk with your service providers for better deals
You have skills – from work – that could become little money-makers to help pay off debts and start funding your investments. A simple call can often drop your sub costs by 10-25% — it doesn’t hurt to ask.