Personal Financial Self-Improvement

  • List your income and expenses. List where the income and expenses come from, whether the expenses are fixed or variable, and what expenses you know will be coming up in the future. This will give you an overview of what you have to work with.
  • Create a Wants and Needs list. Please ensure you know what the differences between the two are because they can easily be mistaken when we really want something. For example, that cup of Starbucks coffee every morning is really a want… the first step to recovery is admitting you have a problem. I gave up my Starbucks addiction because I realized I was spending nearly $100 (give or take a few days) a month there. That’s $100 that can be better spent on things I need, like new shoes for my kids, food for my animals, laundry soap, etc.
  • Get rid of the credit cards. They are evil, horrible things that try to rule our lives. If you can’t purchase something with cash, then save up for it, but please, please, please don’t put it on credit! Ask anyone who has credit cards… it’s a black hole that you continuously drop money into every month. For example, say you have a $2,500 credit card that you accidentally maxed out (we never really mean to max it out… we just found more stuff we need). Say your APR is around 18% (average); you’d be paying about $38 per month in interest. So, maybe you’re paying $50/month toward this credit card debt… you’re only paying $13 toward the actual debt, which would take you 334 months (27.8 YEARS) to pay off, and you’d have actually ended up paying $8,397 for the $2,500 worth of purchases. Again… a black hole that you drop your money into. Don’t do it!!
  • Create an emergency fund. No, I’m not talking about an emergency fund for things like a new pool table, or a new outfit (unless, of course, it’s a necessity). I’m talking about an emergency fund to live off of in the event of an actual financial emergency (i.e. your refrigerator goes out, your car needs new brakes, you need to pay your homeowners deductible to fix the AC in the middle of summer). Ideally, you’ll want to have three to six months of your monthly income put up. I know it’s hard to get there (I’m still working on it), but budget in a little money each month to get started.