How many of you can relate to that line there? Always feeling broke but can never figure out why? I used to be the same, only with “breaking even” all the time and not being able to break the rhythm. It wasn’t until I started PRIORITIZING what I truly wanted in life until things started changing! As cliche as that may seem ;) But if money is always an afterthought, how can you expect different results?
I was actually just reading an older post on Enemy of Debt about this –> “When You’re Tired Of Being Broke, You’ll Start Saving!” It’s a feisty one, but you can’t help but agree with a lot of it.
Anyways, this all came up in a recent email question I got from one of our readers – we’ll call her Martha – and I figured I’d copy and paste our exchange in case it helps give anyone else some motivation or encouragement :) Maybe you yourself have something to add at the end?
Here’s what she wrote, followed by my response back:
I am about to get a bonus that I can use to pay off my car. I was tempted to look at new cars and then I read your comments about being car payment free and I am back on track.
My mortgage started at 166,500 eight years ago. I got scammed in a negative amortization loan and now owe $178,800! I joined a class action suit last year and got $123.00 which is a joke.
I am 64 and really need to start knocking this down. I make 60K a year with bonus of about $2K-$3K quarterly. I also have an 11 year old son at home. Other bills are medical bills and regular household expenses. I don’t blow money but seem to be forever broke. Can you get me started with a plan?
Great! Way to go for not jumping over that new car, even though I’m sure it was hard! :) I get into phases like that too, so don’t worry – it happens to everyone.
RE: Your plan stuff. Not sure what exactly you’re looking for, but I’d say if you have a few thousand dollars “extra” every quarter from your job, that’s a GREAT way to start knocking stuff away no matter what it is in your life :) Esp with your mortgage. Do you already have a budget set up? Or at least have something written/typed down which shows all your money coming in and going out on an average month? If not, that’s where I’d start. You can download a bunch of free templates on my site here:
If you don’t already have one, I’d then work on a “priority list” and jot down the most important things you want to accomplish whether it’s your debt or savings or whatever. Once you have that, I’d then find out what your “extra $” number is every month, or quarter, and figure out what % of it should go where. Or maybe 100% goes to your #1 until that’s done, and then trickles down to our #2, etc? That would totally be up to you as you know what’s more important to you than I would :)
But I’ll say that no matter WHERE you put it, as long as it’s going to savings or debt, there’s NO WAY you can really go wrong. It’s just a matter of preference and maybe a few dollars here and there – know what I’m saying?
It’s okay to change your mind every other month too – that’s perfectly fine. I do it a lot myself! But as long as you’re applying that hard-earned money towards whatever your TOP goals are at any given time, it’s hard to come away with anything but a win. Because that would mean you’re constantly doing what makes you happy at that time when it comes to your money! And if you’re happy all the time, then you’re doing just great, right?
That’s my take on things anyways. It’s hard to give specifics without knowing your entire history (or even you!) at all, but as long as you start making money a REAL priority – not just a half-way one – you’ll see progress happening in no time. And the longer you can stick with it, the longer both your finances AND sanity should start getting better ;) Hope this helps!!
Readers – what do you think? Anything to add to help keep our friend Martha on top and motivated? I didn’t know much about negative amortization loans to be able to say anything about it to her, but maybe you do and can warn us (or explain better?) why it may or may not be a good idea? I’m sure there are others right now currently contemplating it, so anything you can mention would be great… From Martha’s experience alone it looks like we should all run for the hills! Haha…
Hope this helps some of you!
(Photo by danielmoyle)