I have struggled with financial stability, and overwhelmed with unessential clutter in my life. Are you also struggling with debt? Perhaps you may want to make a plan to financial freedom, but don't know where to start or how to execute?
This year I've made achieving financial stability one of my main goals for the year 2017. Here's how I plan to start kicking debts ass.
Now let's talk about the escape plan. One cannot simply say they're going to eliminate debt and poof, debt-be-gone. Make a plan. Start by writing out your desired outcome and consider giving yourself a realistic time frame; especially considering the amount of debt you may have. I personally recommend giving yourself a year and go from there. Now onto the 4 steps to get on the road to financial stability.
1. Identify the Unessential
Go through at least 3 months of bank statements and write out your disposable expenses. Average out how much you spend on items in clothing, entertainment, debts (credit cards and loans), grocery, restaurants. This will get you thinking about where you are right now,and help you identify your goals. Eliminate the unessential that takes up too much of your money with no value in return. You should also make a habit of keeping a daily expense dairy to keep track of your everyday expenses and weak spots. Going all out on Starbucks every morning may not seem so big at first, but keep in mind expenses do add up. If you're a caffeine lover like me, think about getting a Keurig.
2. Only Stick with the Essentials
Alright so here is where a tremendous amount of will power needs to kick in because here comes the hardest part in your debt-to-freedom journey; sacrifice. Stick to the things that you absolutely need to survive like groceries, gas or public transportation money, medications, vitamins, kids necessities, dry cleaning and personal care. Toss unessential expenses like fast food and dinners out, magazine subscriptions, movies, and new clothes. This just a basic list, and will have to be personalized to fit the individual.
3. Prioritize Your Bills
Eliminate stressors by prioritizing your most important expenses. Always pay your rent or mortgage first. At the end of the day you will need somewhere to live. This is your most important bill. Don't jeopardize your credit score by falling behind on payments. Pay at least the minimum balance on your credit cards, if you can do more than that is great and will add a bump to your credit score. Don't go without electricity and running water. If you need more time for to pay your utilities, make arrangements as soon as possible. You do not want to be burdened with extra fees like disconnection and reconnection. Once all of these bills are paid, start focusing on your other bills.
When prioritizing your expenses, ask yourself these questions:
4. Make Your Guilty Pleasures Help You Pay or Save
In my post, How to Make Your Saving Grow, I mentioned this app called Qapital for saving money towards future goals. For those who are not familiar with the app, it's used for goals setting like traveling, buying a house, or hobbies. It's perfect for people like me who have trouble saving money and I love that I'm saving without even knowing I'm saving money. You can also enable push notifications on your phone to be updated of your progress without signing into the app. Here's the step-by-step:
So, for every purchase you make at your chosen guilty pleasure, you will save your chosen amount. For example, for every cappuccino I buy at Starbucks, I will save $10. Considering I need my fix Monday through Friday, I'll be saving $50 a week! Yes people, I need my java to get me through my mornings. I know my obsession with caffeine is a bit much, but if you were a single mom of 3, you'd completely understand.
Using applications like Qapital is great because you can set up ways to save that are most beneficial and not have to rely on memory or will power. The other best part about Qapital is that once your checking account goes beneath a certain amount, it stop taking money for savings to prevent overdrafts.
Don't completely stress about your ability to save right now. Our main focus is getting out of debt, so you could apply that money saved from your guilty pleasure and put it towards your debt. Saving money along the way is an added bonus. However, having emergency funds as a single parent is a huge sanity saver, especially for unforeseeable events like job loss.
Okay so we've mapped out our escape plan, now it's time to take action. Be sure to write down your daily spending habits to keep track of progress. Once it becomes a habit and remain firm in your lifestyle change you will see the benefits of your sacrifices.
Remember only spend money on things you truly need; I can not express this enough. In moments of temptation, refer back to your escape plan as I call it for a reminder of the outcome you are working towards achieving. You can also lean on family and friends for emotional support.
Download the Qapital app now and start saving today. You now have the steps necessary to take for financial stability. Small steps, but will have a huge impact. Keep in mind, sacrifice for that peace of mind you crave.
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Welcome! I'm Daisha Renee; single mom to three minions, Netflix binger, self-proclaimed foodie, and lover of yoga. Since becoming a single mother, I've made it my mission to find practical ways to make my life simpler, and I want to do the same for other single moms as well. Here on this blog I provide financial advice for single moms, managing your money and telling it where to go.
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