Why do you want to more money? Why do you want to be debt free?
You spent some time tracking your spending, then going over the data you compiled to get more insight into what it is you're doing with your money.
"Ok," you're thinking,"now you're going to tell me to make a budget."
Nice thinking, but it's premature.
What is a budget?
Strictly speaking, a budget is "the amount of money that is available for, required for, or assigned to a particular purpose."
With that definition in mind, I'd say a budget is how you plan to use the money you have earned and/or that is available to you to live your life. Without a plan, you will either wind up in debt or spend that money on things that really don't make your life easier or more enjoyable.
That's why I don't think the next thing you need to do is a budget. The next you need to do is figure out what your priorities are.
Your Spending Record Indicates Your Financial Priorities
What do you want out of life in general and day-to-day? What do you spend your money on?
Experiences matter to me. I like to go to nice restaurants. I like to try cooking gourmet meals or desserts. I like to visit my family and close friends often. I like to take big trips whenever I can. I like going to the movies. I also like the comforts of home -- TV, movies, stocked fridge, cushy couch, comfy bed, big thirsty bath towels. I also like trying new things: canoeing, rafting, surfing, trampoline, pole dancing, something novel, something fun.
I also like to give to worthy causes, which I still consider an experience -- I'm just granting a good experience to someone else.
If you look at my monthly reports, you'll see I am always spending a lot on food, clothing and travel. I also "tithe," so I give money away.
I try to spend most of my money on the things that matter to me and AS LITTLE AS POSSIBLE on the things I don't care about!
Being Debt Free Is Your Top Priority
If you're in debt, then getting out of debt should be your singular priority. It's going to be hard to spend your money on the things that matter to you with debt weighing you down and costing you money without providing you with ANY benefits whatsoever.
It may turn out that what you spent your money on is NOT what you prioritize. Then it's good that you went through the spending record exercise, because now you KNOW that and can now do something about it.
Discover What Matters: Your Financial Mission Statement
So what should you do now?
Write down what matters to you. Come back to it in a day or so and read it aloud. You're trying to drill down to the true essence of what matters to you. Once you get that, write it down again and formulate your financial mission statement:
I want to be out of debt so that I can______________.
OR
I want to be rich so that I can _______________.
Fill in the blank.
Mine is: I want to be debt-free and build wealth so that I can live a life full of worthwhile experiences and know that I helped others do the same.
My saving, investing and spending should reflect what matters to me.
Don't try to sound all noble in your mission statement. Be HONEST!
Maybe your statement is:
I want to be rich so that wherever I go, I am the baddest dressed chick on the scene, ALWAYS!
Fine! It doesn't mean that paying bills or taking care of the kids are not important. It just means that once you take care of your responsibilities, it's all about your wardrobe. Whatever does it for you baby.
Think about your priorities. Then we'll put your money to work for you.
DH
Debt Hater is a personal finance blogger who paid off nearly $16,000 in credit card debt (not including a car loan!) in four years, just like she planned. You can visit her blog at www.debthatersblog.com.
Friday, September 17, 2010
Tuesday, September 14, 2010
10 Things My Parents Taught Me...(and they still hold true today)
As I keep refining my life, I often find myself trying to create new ways of doing things. Yet lately I am finding that so many of the things my parents taught me can help me create my lifestyle remix. Here's 10 of my favorites!
1. Make your bed before leaving the house
2. Pick out your clothes the night before
3. Change your sheets when you wake up on Saturday
4. Turn off the extra lights in the house
5. Listen to good music
6. Pack your lunch
7. Don't ever say "I can't"
8. Always save some of your paycheck
9. Don't be lazy, take care of business
10. Take care of what you have, before you ask for something else
Hmmm...so simple, yet so powerful. So thankful for my parents...their love and wisdom is the essence of my lifestyle remix!
Reconnect with the life lessons you were taught back in the day...I'd love to hear about them!
1. Make your bed before leaving the house
2. Pick out your clothes the night before
3. Change your sheets when you wake up on Saturday
4. Turn off the extra lights in the house
5. Listen to good music
6. Pack your lunch
7. Don't ever say "I can't"
8. Always save some of your paycheck
9. Don't be lazy, take care of business
10. Take care of what you have, before you ask for something else
Hmmm...so simple, yet so powerful. So thankful for my parents...their love and wisdom is the essence of my lifestyle remix!
Reconnect with the life lessons you were taught back in the day...I'd love to hear about them!
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Sunday, September 12, 2010
Life Is Happening!
Today was different...its difficult to describe. I woke up from my cozy bed without an alarm clock. I put on my clothes and smiled at my reflection in the mirror. I was on time....NO, I WAS EARLY for a brunch appointment. I enjoyed and savored my meal. I was inspired by the business brainstorming conversation, and surprised by my passion as I discussed my vision. I took time to stroll the National Harbor. I blushed & said thank you to compliments of my presence. I explored shops and chatted with owners. I bumped into a friend and we made plans to get together. My ATM card that I lost was returned to me. I got a call confirming the reinstatement of my drycleaning delivery service. It was a day filled with simple pleasures.
I felt alive....different! I am changing my life!
I felt alive....different! I am changing my life!
Friday, September 10, 2010
Where Is Your Money Going?
You've tracked your spending for a week. Were you surprised by where your money was going? Random spending isn't the only place where we lose money. This week, we'll look at other places you may be bleeding money including account mistakes, overdraft fees, finance charges and impulse buying.
You kept all your receipts or wrote down what you spent, on what and when. You created a spreadsheet to help you add it up.
How do you feel?
You may have felt like it was a pointless exercise (no it wasn't, as I'll explain) or that you didn't learn anything new about your spending patterns or you were blown away by where your money goes in just a week.
Why are you doing this? Chances are, you've never done it before. You may be struggling with debt, or struggling to save for the things that you want or simply struggling to pay for anything at all. Maybe you aren't struggling with any of those things, but you're often hit with expensive surprises at the end of the month -- Not quite enough left in checking to cover the rent next week? Suddenly missing $100 that you don't remember spending, but it sure isn't in your account? Getting an e-mail about your account being overdrawn?
You track your spending to look for the obvious holes. Once you see the obvious holes, you can get better at spotting the less obvious ones, which we'll talk about in this post. The longer you track your spending, the more accurate a picture you have of your overall finances. The more accurate your picture, the better planning you can do for your finances. The better your financial plan, the LESS you'll have to do the tedious work of tracking every penny. If your plan is tight, there won't be any surprises! That's why this is not a pointless exercise.
But you also must walk before you can run.
Here are five places to look to save money that you may not normally look:
1. Bank and credit card statements. Banks are not infallible. Banks make mistakes with YOUR money. Check your statements and make sure you weren't charged any erroneous fees or that someone else hasn't gotten a hold of your information and is shopping on your dime. If you have a questions or suspicions, CALL YOUR BANK. You might be the one mistaken, but it's better to get it straight than to assume everything is fine. The same goes for any other bills including your cell phone, utilities, etc.
2. Monthly fees vs. annual costs. Why do you think car dealers ask you "How much are you looking to pay a month?" when you are looking to buy or lease?
The CORRECT question is "How much do you want to pay for this car and how long do you want to pay on it?"
Why do they ask the first question and not the second one?
Because by getting you to think only about the monthly fee for that car, they can get you to pay way more for it than it may be worth.
It's the same with any other monthly fee -- a low fee may seem like a bargain, but multiply by 12 and see how much money you may be losing on something in a year.
Look at your bills and bank statements and see what things you're charged for each month (besides your rent or mortgage). Multiply that monthly charge by 12 -- that's what it costs you each year. Do you really want to spend that much on whatever it is each year? Could you possibly spend less on that same service?
3. Your cell phone. Of course you need it, but could you potentially spend less on it each month? Are you using all those minutes? If not, can you roll them over? If not, can you get fewer minutes for a lower price? Are you paying per text message and frequently go over the limit?
Many cellular providers' websites allow you to "analyze" your bill. You punch in your information and then it lets you know if you're actually using everything you're paying for. If you aren't, you may want to cut back on your services or options and save some cash.
4. Your friends and family. Are you the one always covering somebody, helping a sistah out, bailing out a brother, or footing someone else's bills? Maybe it's just $20 here and there, but how often do here and there call you asking for money?
5. Your vices. Cigarettes. Alcohol. Ice cream, and lots of it. These are all things that may be hurting more than your wallet! Have you lost $100 and gained 10 pounds this month and don't quite know how? Look here. Your indulgence in these things may also be costing you indirectly -- does your company benefits plan charge additional fees if you're a smoker, drinker, or significantly overweight?
Right now, I'm not asking you to start or stop doing anything. I'm just asking you to take notice of these things that you probably never spend time thinking about.
Once you recognize your patterns, you can do something about them -- channeling that same brain power to help you instead of hurt you.
Spend this week checking on where you money goes and seeing if there are places where you can stop the bleeding. Once you identify those areas, close them up!
DH
Debt Hater is a personal finance blogger who paid off nearly $16,000 in credit card debt (not including a car loan!) in four years, just like she planned. You can visit her blog at www.debthatersblog.com.
You kept all your receipts or wrote down what you spent, on what and when. You created a spreadsheet to help you add it up.
How do you feel?
You may have felt like it was a pointless exercise (no it wasn't, as I'll explain) or that you didn't learn anything new about your spending patterns or you were blown away by where your money goes in just a week.
Why are you doing this? Chances are, you've never done it before. You may be struggling with debt, or struggling to save for the things that you want or simply struggling to pay for anything at all. Maybe you aren't struggling with any of those things, but you're often hit with expensive surprises at the end of the month -- Not quite enough left in checking to cover the rent next week? Suddenly missing $100 that you don't remember spending, but it sure isn't in your account? Getting an e-mail about your account being overdrawn?
You track your spending to look for the obvious holes. Once you see the obvious holes, you can get better at spotting the less obvious ones, which we'll talk about in this post. The longer you track your spending, the more accurate a picture you have of your overall finances. The more accurate your picture, the better planning you can do for your finances. The better your financial plan, the LESS you'll have to do the tedious work of tracking every penny. If your plan is tight, there won't be any surprises! That's why this is not a pointless exercise.
But you also must walk before you can run.
Here are five places to look to save money that you may not normally look:
1. Bank and credit card statements. Banks are not infallible. Banks make mistakes with YOUR money. Check your statements and make sure you weren't charged any erroneous fees or that someone else hasn't gotten a hold of your information and is shopping on your dime. If you have a questions or suspicions, CALL YOUR BANK. You might be the one mistaken, but it's better to get it straight than to assume everything is fine. The same goes for any other bills including your cell phone, utilities, etc.
2. Monthly fees vs. annual costs. Why do you think car dealers ask you "How much are you looking to pay a month?" when you are looking to buy or lease?
The CORRECT question is "How much do you want to pay for this car and how long do you want to pay on it?"
Why do they ask the first question and not the second one?
Because by getting you to think only about the monthly fee for that car, they can get you to pay way more for it than it may be worth.
It's the same with any other monthly fee -- a low fee may seem like a bargain, but multiply by 12 and see how much money you may be losing on something in a year.
Look at your bills and bank statements and see what things you're charged for each month (besides your rent or mortgage). Multiply that monthly charge by 12 -- that's what it costs you each year. Do you really want to spend that much on whatever it is each year? Could you possibly spend less on that same service?
3. Your cell phone. Of course you need it, but could you potentially spend less on it each month? Are you using all those minutes? If not, can you roll them over? If not, can you get fewer minutes for a lower price? Are you paying per text message and frequently go over the limit?
Many cellular providers' websites allow you to "analyze" your bill. You punch in your information and then it lets you know if you're actually using everything you're paying for. If you aren't, you may want to cut back on your services or options and save some cash.
4. Your friends and family. Are you the one always covering somebody, helping a sistah out, bailing out a brother, or footing someone else's bills? Maybe it's just $20 here and there, but how often do here and there call you asking for money?
5. Your vices. Cigarettes. Alcohol. Ice cream, and lots of it. These are all things that may be hurting more than your wallet! Have you lost $100 and gained 10 pounds this month and don't quite know how? Look here. Your indulgence in these things may also be costing you indirectly -- does your company benefits plan charge additional fees if you're a smoker, drinker, or significantly overweight?
Right now, I'm not asking you to start or stop doing anything. I'm just asking you to take notice of these things that you probably never spend time thinking about.
Once you recognize your patterns, you can do something about them -- channeling that same brain power to help you instead of hurt you.
Spend this week checking on where you money goes and seeing if there are places where you can stop the bleeding. Once you identify those areas, close them up!
DH
Debt Hater is a personal finance blogger who paid off nearly $16,000 in credit card debt (not including a car loan!) in four years, just like she planned. You can visit her blog at www.debthatersblog.com.
Sunday, September 5, 2010
The Dating Experiment
Those of you who really know me, know that I love to do things in an alternative or creative way. Earlier this summer I was inspired by a piece in Essence magazine where the relationships editor participated in a summer dating challenge....did y'all read that? Well, anyway....she created a circle of trusted friends (including her MOM!) to put her on blind dates! Check out essenceonline.com
I thought it was an interesting approach to the dating game, and wondered if I could incorporate it into my NeoSoul Lifestyle. And, guess what?! I did!
So here's how I remixed it for me.....
I invited a circle of women to my home for brunch to interview me about my dating life and what I hope to experience from this experiment! I selected women that I KNOW have a true appreciation for love, marriage, and relationships.....most importantly THEY KEEP IT REAL! You can follow them on Twitter at:
@ChasingSoul
@PolishedImage
@OriginalNajeema
And if you're not already...follow me @NeoSoulAlterEgo !
These ladies will also help me to spruce up my online dating profiles too...I think they are in for a shock to really see what the single life is all about these days!
After our brainstorming session, these ladies...which I will now refer to as "The Counsel" will set me up on blind dates in September. And of course...I'll be blogging and tweeting along the way!
Oh....and keep an eye on my friend Rosetta @happyblackwoman or www.happyblackwoman.com because she is doing an Extreme Online Dating Experiment!
So send me positive vibes y'all! The NeoSoul Lifestyle remix is in full effect!
I thought it was an interesting approach to the dating game, and wondered if I could incorporate it into my NeoSoul Lifestyle. And, guess what?! I did!
So here's how I remixed it for me.....
I invited a circle of women to my home for brunch to interview me about my dating life and what I hope to experience from this experiment! I selected women that I KNOW have a true appreciation for love, marriage, and relationships.....most importantly THEY KEEP IT REAL! You can follow them on Twitter at:
@ChasingSoul
@PolishedImage
@OriginalNajeema
And if you're not already...follow me @NeoSoulAlterEgo !
These ladies will also help me to spruce up my online dating profiles too...I think they are in for a shock to really see what the single life is all about these days!
After our brainstorming session, these ladies...which I will now refer to as "The Counsel" will set me up on blind dates in September. And of course...I'll be blogging and tweeting along the way!
Oh....and keep an eye on my friend Rosetta @happyblackwoman or www.happyblackwoman.com because she is doing an Extreme Online Dating Experiment!
So send me positive vibes y'all! The NeoSoul Lifestyle remix is in full effect!
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