You've probably heard that American households are drowning in debt. The saddest part is that many are drowning without even knowing it. The average American household owes nearly $150,000 in debt across all forms of debt, including student loans, mortgages, auto loans, and credit cards. With this amount of debt, it's no wonder that nearly 40% of Americans live paycheck to paycheck. It doesn't have to be this way, though. It really doesn't.
I remember, at age 48, sitting on the sofa and sobbing. I was reading a money makeover book and it asked me if I had enough money to live on when I retire. It said something like ‘Many retirees are so broke they can only afford to eat Alpo'. Alpo! Dang, I didn't want to eat dog food. And so I cried.
We were broke. Yup, we were. If you looked at us you would not say that. We had a nice house and 2 newer cars. Our clothes were nice and we even had a little vacation house and a boat. The thing is…ALL but one car was financed. We had NO savings. NO emergency fund. We were one step away from financial disaster.
But you see….I had NO idea. It never occurred to me that we were living on the edge. Like so close to the edge. The book I read was a total wakeup call for me. And I went to work to save money. We paid off the car. We sold the vacation house and the boat. And we saved and saved and saved some more.
I sold everything I could that was not needed. I told the kids to hang on tight cause they were next!
Now, I just read the craziest article. It said that ‘64% of Americans Aren’t Prepared For Retirement and 48% Don’t Care'. And my heart just broke. Aren't prepared. Don't care. My mind goes to why…and then I realized that it's hard. And if no one shows you how…it's impossible. You can read that article right HERE. If not for the book that I read and the steps that I was shown…I have no idea where we would be today.
If you're looking at ways to get ahead financially, here are 5 great ideas.
Invest in you.
Pay yourself first. You earn it. So, why not set aside money for you first. Start with 10% of your gross (before tax) income. Move to 20%. Place it in a savings account or, better yet, invest it for a higher rate of return. In order to do this you might have to cut back on expenses. But, I promise, it is worth it in the long run. You don't want to eat dog food do you?
Stop throwing money away.
When was the last time you looked at your credit card statement? I mean REALLY looked at it. How many ‘ghost' expenses are there? How many apps and subscriptions are you paying for that you no longer use. A friend of mine just went through her account and was able to save $400 a year.
Start a budget. Try the 50/30/20 plan.
Unfortunately budgets have a bad rep. Me? I love them because I am free to make financial decisions. If the money is in the account then it is available to spend. I would like to encourage you to start a budget. One great online budget is ‘You Need a Budget' or YNAB. This is what I use and I love it.
50% goes to your monthly expenses. Mortgage/rent, car, debt, clothes, food, utilities, entertainment, etc
30% goes to wants. vacations, home renovations, etc
If you are having a hard time sticking to a spending plan and not saving try this. It goes hand in hand with the 30% want spending and 20% savings plan in the step above.
Before you spend money on something you want, put the exact same amount of money in a savings jar. You will be able to SEE how much money you could be saving or using to pay off debt. If you can't afford to save the money (match your spending) then you can't afford to spend the money either.
Evaluate your spending
Unless you inherited money…you work hard for what you earn. Stop spending on things you don't need. To impress people you care nothing about. Before you make a purchase take a step back and ask yourself. Would I rather own this or invest the money? Will I own it in 10 years or will it wear out? Is this a wise use of my money?
Once you can take a step back and evaluate your spending it will be easier for you to actually determine if it is something you want or don't want.
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INCLUDED - My Party Planner! Put your party hat on and plan with confidence! Grab yours before they are gone!
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