First Steps - Things to do after a Financial Epiphany
As you can tell by my previous posts, my financial house is in pretty bad shape. Believe it or not, my situation is vastly improved since last year at this time. I had an “ah-ha” moment - a Financial Epiphany, if you will - that got me thinking about the financial treadmill I was on. Here are the tips I have been following for the past 11 months:
1. Track every cent
In January of this year I began to track my expenses in much more detail than I had in years past. I have charted my monthly bills and rent/mortgage expense for years, but I never kept tabs on what I had always classified as “miscellaneous spending.” For instance, I now know that I have spent exactly $1558.27 on groceries so far this year, and $463.72 on toys and treats for my dog. At year end, my partner and I are going to sit-down and go through every line item in my expense column (and there are over 20) and talk about places where we can cut spending.
2. Research how others got themselves out of similar circumstances
I have yet to come across any individual with as much debt as I have managed to acquire, which is a little daunting. I have a big hole to climb out of, but that’s not going to stop me from trying. I have always read the financial trades, as its part of my job. To the expected WSJ, Bloomberg, and ABA literature I have added RSS feeds from MSN Money, and personal finance blogs like The Simple Dollar, Wise Bread, and Get Rich Slowly (to name a few). I have especially valued MSN Money’s Women in Red series and Trent’s Financial Armageddon series at The Simple Dollar.
3. Get a second job
One of the reasons I decided to pursue an MBA was so that I could teach evening classes. Over the summer I applied for several adjunct faculty positions and started teaching at two different area colleges in August. The extra income is going to my emergency fund, credit card debt, and the wedding. I plan to continue to teach until my student loans are paid off.
4. Other small changes
- Took my credit cards out of my wallet (I can’t bear to cut them up yet because I’m still working on my emergency fund).
- Opened an ING Savings account last month, so far I have $1200 in there. Once I get to $3500 (one month’s expenses), I will direct all of my teaching income that way.
- Removed the latte factor - I used to get a latte nearly every day, now it’s a weekend treat (and according to my spending log, I’ve spent $124.40 on coffee so far this year - that’s a number I can live with).
- Rode my bike the five miles to work a few days last summer, and I’d like to do that much more often in 2008. Besides saving gas money, it’s better for the environment
I realize that I have a lot more work to do, but I’m working on getting things in place. Hopefully, this is just the start of something great!
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