Financial Challenges Support Group
This community is for people who are struggling to meet financial obligations of any kind. Financial challenges include everything from the day-to-day challenges of making ends meet to managing credit card debt to bankruptcy. Get support from others who are going through similar obstacles on the road back to financial stability.
Three years ago I was over $65,000 in debt and near homelessness. I found a cheap apartment to live and had no idea what I was going to do. My first goal was to never again bounce a check or to use overdraft protection... that was my start.
I began paying bills one at a time. I'd like to say I took action on these accounts but that ain't true. It was a program of reaction. Every bill was paid when I was threatened with court action or wage garnishment.
Anyway, by six months I started saving some money as well as pay my bills. It wasn't much... just 5% of my income was saved. As bills were paid in full... that money went into savings. By the end of the first year I was saving 20% of my salary.
The second year I kept paying bills and saving money and got up to 30% of my income into an emergency fund.
The third year I paid off the last bill and became debt free. And I went to 40% of my income into savings.
As I start my fourth year, I have reached 50%. I am living on half my paycheck and saving half!!! I continue to find things to cut corners on and to save money. What is amazing is that I'm not hurting. I'm living a frugal life but I still do things and enjoy events.
Next goal is 55%. My emergency funds is now a little over seven months. I want to get that up to two years. If I ever lose my job, I want to live comfortably while I look for another and not worry about taking any job right away.
My key to this new lifestyle was not by increasing my income but rather by decreasing my expenses and to continue to look for ways to cut out more.
I began paying bills one at a time. I'd like to say I took action on these accounts but that ain't true. It was a program of reaction. Every bill was paid when I was threatened with court action or wage garnishment.
Anyway, by six months I started saving some money as well as pay my bills. It wasn't much... just 5% of my income was saved. As bills were paid in full... that money went into savings. By the end of the first year I was saving 20% of my salary.
The second year I kept paying bills and saving money and got up to 30% of my income into an emergency fund.
The third year I paid off the last bill and became debt free. And I went to 40% of my income into savings.
As I start my fourth year, I have reached 50%. I am living on half my paycheck and saving half!!! I continue to find things to cut corners on and to save money. What is amazing is that I'm not hurting. I'm living a frugal life but I still do things and enjoy events.
Next goal is 55%. My emergency funds is now a little over seven months. I want to get that up to two years. If I ever lose my job, I want to live comfortably while I look for another and not worry about taking any job right away.
My key to this new lifestyle was not by increasing my income but rather by decreasing my expenses and to continue to look for ways to cut out more.
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I invited Bill to have dinner with me last Sunday. He wasn't willing to drive 7 hours to mid Michigan and teased me with his beautiful ribs!!! So, of course I ate alone and had cedar salmon
I'll be having a PRM (Part of DA program) tomorrow. It will hopefully lead me towards establishing a bona fide Spending Plan. I still struggle with Underearning, but I hope that I will eventually find an employment path that bears fruit.
I am trying to teach myself GIMP and Inkscape for Graphics Design. Last Night I made crude attempts at the Apple logo and the Canadian Maple Leaf using Inkscape with reasonable success.
Impossible is nothing. :)
Sometimes the things we want lead to more stress and headaches and in the end they just aren't worth it.
In the end, I just wanted to be comfortable and I finally saw that owning things and owing on them never brought me comfort.
There is a lot of peace knowing I have some funds for emergencies and the bills are nil... THAT is comfort...
I teach financial literacy to low income people for a living, and I teach fiancial counsellors how to counsel too. One of the first things I say, in every class or meeting, is:
If your money is under control, you can handle whatever else life throws at you, with greater ease.
We all know life throws us curve balls - unemployment, illness, death close by, court action etc.
The two year expenses plan is great - I start people off with 6 months and ask them to plan for 12.
I also agree - we don't need "things" - and there is great satisfaction in being creatively thrifty. We don't go without - we just do differently.
One of my other favourite notes for classes - there is no wealth without thrift. And - nothing works, unless YOU do.
Another thing you might try is minimizing taxes. I max out 401k contributions which allows me to keep more of my income from the government. True, taxes will be paid when it comes out, so it's really deferral.
Good luck and God Bless!
First though, I want to really have a strong emergency fund, when I have that then the 401k will be tackled.