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I am a small business owner. Like for most small business owners, 2020 for me was…shit. I made some business decisions and some personal finance decisions out of sheer panic that I’m still paying for today.
Fast forward to 2022..I’m back to working full time and have the opportunity to get my shit together so I’m here to tell you exactly what’s been working for me. Full disclosure, I’m no financial expert. I’m just someone willing to share how I’ve been being more mindful of my purchasing and getting my money on track.
Firstly, I stopped using Credit Cards all together. I’m embarrassed to admit how long it took me to realize I’m never going to make progress unless I stop using my cards but it took me some time. Before I stopped using them, I found myself in this cycle where I would throw ALL my income at my CC’s then end up maxing them right back out because I didn’t have enough money in my bank account to function. Now, I am doing the “avalanche” method, which is paying down the CC with the highest interest first and making minimum payments on the rest. I allow myself enough money in my checking account to live with some extra to enjoy my life, and anything on top of that gets thrown at my highest interest card. After that one’s paid, I’ll move onto the next, and so on. There are different ways to do this all over the internet and you can do as much research as you want, but I didn’t start seeing progress until I picked one and stuck with it. Since September of this year, I have made a BIG dent in my CC debt, all while depriving myself of very little.
I’m being more mindful of my spending. As I said, I’m not a depriving myself of fun stuff during this process. I understand sacrifice has to be made, but there’s no way in hell I’m not having a little fun while I get myself out of debt. That being said, I’m cutting out things that just aren’t that important to me and thinking twice before I make any purchases. Can I wear something I already own? Do I need new sneakers or are they just going to make me temporarily feel like I fit in at the gym? Do I really need to stop and get a coffee when I’m five minutes from home? These types of decisions are where my High Yield Savings Account comes in. Every time I make the decision so pack my lunch from home, skip the coffee, or generally not spend money impulsively. I take the money I would have spent and add it to my savings. It is SO easy and satisfying to save this way! It might not seem like much at first, but I promise you’ll see results before you know it.
What is the money in my savings for? Mine is three things…emergency funds, fuck off funds, and savings towards specific goals. Some people have multiple accounts for multiple things, I do not. Split your accounts into whatever categories feel right for you!
Emergency Funds: Shit happens. My most recent pull from this fund was $400 for new brakes. This money is for when the pipe bursts, you slip and bust your ankle, your car breaks down, etc.
Fuck Off Funds: This one is for when you need to look someone in the eye and tell them to fuck off. Your boss, your boyfriend, a client, a landlord, whoever. Work towards keeping enough cash in your account so you’ll be okay for a while without them. This one I think is the most important, especially for women. I don’t care if you can set aside $5 a month. That’s enough for a little gas to GTFO of a scary situation.
Savings for a Specific Goal: Right now I’m planning a trip to Palm Springs. If you want to travel, buy yourself something fancy, or save for a new home/car without fucking yourself over financially, use a High Yield Savings Account.
Have I convinced you to try a High Yield Savings Account? Here’s a link to the one I use and love! If you sign up using this link, you and I BOTH get an extra 1% APY. It’s a win win!
Sign up for Marcus by Goldman Sachs HERE! (It’s super convenient to transfer and save money with their app.)
Having a plan for the type of life I’m saving for is what keeps me motivated. When I make the decision to pack a sandwich instead of eat out, I’m saying that I want that future life MORE than the fast food lunch I would grab at work. (It doesn’t always shake out this way. Sometimes I really really want a taco and that’s OKAY.) Every time I see that number go up, I get a little burst of satisfaction and excitement for future me. I didn’t even realize I was doing this, but after reading Atomic Habits by James Clear I realized I am replacing a negative instant gratification (a cigarette, fast food lunch, etc.) with a positive instant gratification. (Seeing those $$ rise!)
There you have it! I’m still learning and still growing but I’ve made big progress so far with these tips. This is the point where I’d like to stress again that I’m no financial expert! This is just the system that works for me.
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