We are officially 41 days into 2019! And even though my Christmas tree just came down two weeks ago and I swear I’m still tired from 2018, here we are in another year!
Be grateful for making it to 2019 and please take a moment to thank 2018 for what it has taught you. All of the tears, the mistakes and the misfortune were there to make you stronger. Thank them for their lessons and if you’re ready, let them go. Hold onto the memories of ‘I can’t breathe’ from laughing too hard, the times things just seemed to work out and any new doors that swung open for you. Thank 2018 for the new people in your life and the old ones who taught you what you needed and then continued on their own journey.
Now is as good a time as any for us to talk about our goals and aspirations for the new year! I hope you haven’t already given up on your 2019 resolutions, and if you’re feeling discouraged – keep trying, you have 324 more times to get it right!
One of my many goals – yes I have a LIST, is to become more financially stable. I’ve been doing my research and would like to share a bit of my new found knowledge with you! First of all, I think it’s important to mention that when I say debt, I don’t mean mortgage debt. Yes try and pay it off as quickly as you can so you can be completely debt free but for this post in particular, when I say debt I mean credit card/car/school debt.
1. Knowledge is power
Go online and figure out : how much money you have, how much money you owe, and how much money you spend each month on bills + the extras. Write it all down. Seeing the numbers helps you to better understand your situation. Some institutions let you check your credit score for free without any penalities, try it and see where you stand.
The money expert Dave Ramsey suggests that the first thing you do is save 1000$ straight off the bat! This is what he calls a starter emergency fund. It can serve as a safety net if during this time something unexpected comes your way. Keep in mind that it is only for EMERGENCIES. 911! I need help now! Emergencies.
3. I am committed to getting rid of my debt.
Say it with me now! I’m committed to getting rid of my debt. So start working on it, bit by bit. The absolutely best way to get rid of your debt?? Whatever method works best for you – that you will actually do!
Some people suggest that you tackle whichever debt has the highest interest rate, some people suggest that you tackle the smallest debt first and then move on to the next one until you’ve paid it all off. The point is – whichever method you choose, please make sure that it’s a plan that you’ll commit to. That’s what financial independence will take! Your commitment to getting it done!
Whenever you use your credit card you are BORROWING money. Every. Single. Time. Whether you have enough funds in your bank account or not. So the solution? Only borrow money that you ACTUALLY have. This means that if you can’t pay off your entire credit card by the bill date, then you probably shouldn’t buy that item. But what about an emergency? An emergency is exactly what your emergency fund is for!
4. The B word
So you’ve started your emergency fund and you’re on your way to paying off your debt. Great! Now it’s time to make your budget. Yes.. that dreaded B word. Go back to step one and add your debt repayment plan to your budget. Try Pinterest/Google/even Instagram – for examples that you can use. Don’t forget to add gas money and groceries – you’ll have to eat sometime.
5. Time to start dieting
On top of everything else I’m bringing a cash diet into your life. This is something that can help you see how much money you’re spending in between your paychecks. How does it work?
Take out your spending money in cash. This is the money you’re free to spend on a little fun/happiness while you’re paying off your debt. The key is that it is a reasonable amount AND something that will actually bring happiness into your life. So if you’re happy going to Starbucks once a week (hello chai latté) or getting your nails done (yes please) then go for it! As long as it is money that you’ve set aside, after all of the important things have been taken care of. Once you’ve spent it though, that’s it until your next paycheck so spend it wisely!
Last but not least.
- If you need to get rid of your credit card. Get rid of your credit card. For some people breaking up with their credit card is the only way for them to get out of debt.
- Be strict with your money. Try giving up Starbucks (sigh oh how I love my chai tea latté) and invest in a cute travel mug that you can use instead.
- Set up automatic withdrawals that will do the saving for you. That way you don’t even need to think about it!
- Once you pay off your debt, build up that emergency fund. How many times do you finally take a huge chunk out of your debt, only to have to rack back up your credit card because you find yourself in a pickle. Build up that emergency fund.
- Trick yourself into saving. My sister and I both have piggy banks and every year we go to the bank and empty it out. It ends up being twoonies and quarters most of the time but sometimes it actually adds up. Cashing it at a certain point of the year (ours is New Years) is a nice little gift to yourself.
A friend of mine suggested buying groceries on sale! I use the Flipp app but there’s also the Reebee app which allows you to make shopping lists and even price match at your favourite grocery store. Please keep in mind that it has to be the exact same product and that not everyone offers price matching.
Is getting out of debt or just being more financially responsible one of your goals for 2019? Hopefully some of these tips will help you get exactly where you need to be! Do you have any additional tips? Something that worked for you? Please share in the comments below so we can all learn together! All the best for 2019!