Mme. Ferris’ tip for Day 23 is to “be financially chic.” Now, money is likely to be a sensitive area for many of us, but Divas are not afraid to face their fears, so in we go! Honestly, the problem isn’t that we think about money too much; it’s that we think about it too little! For many of us, money was a taboo subject growing up and the end result of that is that we reach adulthood not really understanding how money grows, how to save, and how to view money as a tool to building the lives we want instead of as a Great Mystery.
Say it with me – debt is not chic. The average American, regardless of age, carries thousands upon thousands of dollars in consumer debt, excluding home mortgages. For many of us, credit cards, car payments, late fees, and so on add up to a nigh-crushing load of debt. Add education loans on to that and it seems like a Pit of Despair. Yes, we could have made better choices in the past, but here is where we are, so here is where we shall begin.
The first step is understanding the basics of finance. Mme. Ferris includes a quote in today’s entry that struck me as being incredibly useful – “Those who understand interest earn it; those who don’t, pay it.” You don’t have to become a financial wizard, but you DO need to understand the basics. There are any number of blogs and books that can assist you for free – she lists a few in today’s entry, including Thomas Stanley’s Quit Acting Rich and Denise Duffield-Thomas’s Get Rich, Lucky Bitch. Several years back, we decided our debt was getting out of hand and became proponents of the Dave Ramsey “snowball” method. It took a while, and it wasn’t always fun, but for us, it worked. But there is always the temptation to backslide into debt in the name of instant gratification. One of Mme. Ferris’s strategies to combat that is to use the nice things you have. This is sound advice – so many of us have nice things (heirloom china, a good silk scarf, pearl stud earrings, etc.) that we “save” for special occasions. Stop that! Use them TODAY – you’ll feel rich using your good things on a daily basis.
Keep in mind that when it comes to debt reduction, there is no one, sure-fire method – every household is different, but you must commit. As with everything else, get it on paper. It’s just numbers – don’t be afraid! Once you have a list of what you owe and what the interest rate is, you can start knocking it out. Mme. Ferris has some great ideas in here about making your home a place you want to spend time and thoughtfully making saving a priority. (She also points out that everyone is going to have a breaking point – there are some extreme saving methods that I’d never use; they make me feel poor instead of feeling abundant. My breaking point is probably not the same as yours.) Can you cut your cable bill? Get rid of the gym membership that you never use? Hold off on a few purchases?
I get it – it’s nearly Christmas, when many of us go nuts. It’s okay to stop that. Really – it is. Stop digging that hole of debt and start building a sound financial future.
While our financial footing is stronger than it was, there are still areas I need to work on, so I’m going to take her advice here. There are some financial matters I’ve put off dealing with that I’ve decided to make a priority and I encourage you to do the same. You deserve to know what your financial picture is and then figure out, with help from a professional if necessary, how to reach your goals, whether that’s a fat and sassy college fund for your kids, a cruise vacation next summer, or a comfortable retirement. Don’t put this off. Commit to starting the next year with a plan – can you set your bank account up to automatically send $50 a month to an investment account – or to pay off some of that consumer debt? Could you “round up” your educational loan payment or credit card bill so you’re not just paying the minimum? Talk with your bank and see!