So, like I said when I left off, I was in debt up to my tits and had just gone deeper after hitting that deer (technically he hit me, but whatever) and my funds in my checking account were draining fast.
I had thankfully secured a personal loan in late December of $5000 so my head was above water and a HUGE weight was taken off my shoulders but I knew I had to make a plan and change the way I was spending and tracking (I wasn’t) my money.
I am a firm believer in the power of google and using the internet to research ideas so I began to look at budgeting software. I tried a couple of spreadsheet-based apps but they didn’t seem very intuitive or interactive and I finally settled on one called YNAB (You Need A Budget). Game changer.
My method of budgeting up to this point in my life was periodically checking my account balance and going “Sweet! I’ve got $432, I can go buy some more bullshit!” or “Crap! I have -$36, guess I’m eating whatever’s in my pantry until I get paid again.” And this was the cycle. Granted, for a while I wasn’t making a lot of money and I had debts to pay off and I had to periodically get cash advances from my credit cards to keep from going broke which just prolonged the suffering but the root cause of the problem was financial ignorance. I would actually avoid looking at my account sometimes because I didn’t want to know just how little I had in there. Can you believe that?! Obviously, things had to change. And they did. And I thank that stupid deer that jumped in front of me for setting things in motion.
So, fast forward to setting up YNAB. Being as cash strapped as I was it was great that YNAB has a free 35-day trial period. It is very easy to set up and is simple, clean, and intuitive once you understand what all the functions do (there are plenty of great tutorials to be found online).
Basically, you create a category for all your expenses and account types and they are listed line by line. This is great because I am a visual learner and being able to actually “see my money” was sort of mind-blowing. I mean really. Something in my brain clicked. I saw the exact amounts I was hemorrhaging every month, where I could cut expenses, where I could shuffle funds to or from, and things that I could significantly cut back or eliminate altogether.
Again, it’s great because it has clean visuals and breaks everything down into categories.
Maybe pie charts are you thing?
Regardless of where or how you spend your money, being able to SEE where it’s going and, more importantly, how it is impacting your overall net worth is a game-changer for me.
*Disclaimer: I did have to restart my budget once because I started clicking on buttons that I didn’t fully understand the function of and got “lost”. The great thing is though that YNAB saves older versions of your budget so technically I could have taken the time to figure out what went wrong but starting from a clean slate seemed easier at the time. There is also a handy ‘undo’ button that I totally missed initially which would have really helped so if you do something you didn’t mean to you can always just click it and go back.
I started my path to saving money with the easiest and most immediate method; getting rid of shit that I didn’t need. 100MBPS internet? Down to 10MBPS. $30 saved. Renting a modem/router from the cable company? I bought my own. Another $10 a month in my pocket. $120 phone bill for services I hardly even use? Switched to TING. Now I only pay for the minutes and data that I use; phone bill averages about $28 now. I boosted my monthly income by over $100 just by making a few changes.
I figured it couldn’t hurt to ask for a raise. Got one. I felt emboldened. I had hope. I started to see a light at the end of the tunnel. “I can do this!” I thought to myself. I began to form a plan. Next step was to attack and kill my debts. Kill them with extreme prejudice. Credit cards, IRS, loans, car payments, it seemed daunting but no longer insurmountable. Just having a plan and a path forward was incredibly motivating and confidence boosting.
As we moved into the new year this process would accelerate and I would find new ideas and methods and begin my foray into the world of investing and begin to seriously research avenues of reliable and PASSIVE income. Because after all, that is my goal. To escape the rat race and get to a place where I no longer have to work because I HAVE to but because I WANT to. I will get there. I am on my way.
Next post I’ll get into the details of investing and gathering educational tools and resources to assist and accelerate my journey from roadkill to riches.