Starting Over

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It seems I’ve talked a lot about that on this here blog but here I am, yet again, with a report of having to start over.

Life became a bit more than I could handle and I found myself having to make what felt like dire decisions to just get to the next day. In a period of five weeks:

  • Broke my foot (this cost me over $600 out of pocket);
  • Lost my apartment (cost me over $2,300);
  • Finagled a last minute move that was crazy expensive (cost me over $200); and
  • Spent over what I would have normally spent to get to work ($30 a day or $150 a week).

I was making $14 an hour and I thought that spending money I didn’t have to spend was the worst of it. For a while, it was. Then I took a trip to Hawaii (that had been paid for the year before) and lost my personal identification and bank cards. Oh joy! That was surely going to be the worst of it?

Not. At. All.

It seemed as though collectors and creditors knew I was in dire straits and called for every single dollar they’ve ever leant me to be paid back. By this point, I was living with my Mom and had to enlist her help in this. The final verdict? She wouldn’t be able to help me.

And this is where I find myself today – steeped in embarrassment at my financial state and wondering IF it ever actually gets better for the poor folks who were born poor?

It might not but after some deep soul searching, I’ve recommitted to the idea of starting over, really starting over, so that I can eventually own my name. My debt has become a noose around my neck and while I know that money doesn’t buy happiness, it would certainly allow me to afford the scissors to cut myself loose.

We shall see!


My Financial “Miss Celie” Moment (#31WriteNow)

I find something very interesting happening as I write the “Building Blocks for Building Wealth”™ series. Well, not interesting because the more I think about it, the more I expect that to happen. What I mean is that I don’t post about a rule until I feel comfortable posting about it.

And I don’t feel comfortable until I DO it.

With that being said, one the next steps is to “Realistically Examine Your Habits.” By that I mean, take a sobering look at the things you do financially. I’ve written before about habits with money, especially bad ones, stem from something emotional. If you are like me, you’ve had lots of time to practice HIDING those emotions and so you probably don’t know the root cause of your money beliefs.

Today I decided to come face-to-face with one of mine — I don’t open my mail.

Largely, I get reminders of bills and their due dates. When something majorly traumatic happens in my life, those reminders escalate into notices of “Hey! Girl you know you forgot to pay your bill???” and if something absolutely crazy happens, then those turn into shut off notices. Now what does this have to do with a Miss Celie Moment.

If you’ve ever seen The Color Purple*, then you know that there is a pivotal moment for the main character Celie Harris Johnson. During the holidays, Miss Celie is preparing a meal for a large group and Shug (one of my absolute favorite characters ever) happens upon a letter from Celie’s sister, Nettie. Now, Nettie is in Africa and has been for some time after being forced to leave the Mr’s house because of “personal differences**”. As Celie prepares the meal, Shug tells her that she has something to show her and they find an empty room in the house where Celie finally sees the letter. Shug realizes that there have to be more letters because Nettie and Celie were absolutely close…and lo-and-behold, after searching through Mr’s personal belongings, they find them. Shug tells Celie, “Put them in order by date” so she can read them. It is in this moment that Celie faces a truth that she must have either felt foolish for holding in her heart OR it dashes whatever craziness she made up about why her sister (Nettie) never wrote her.

So what does this have to do with me? Remember I said I don’t open my mail?

Well….yesterday I was cleaning up and came across a huge stack of mail. I mean, some things go as far back as April when I had my surgery. The other thing that happened was that I had to face the realization that I worked over 40 hours a week at a job and couldn’t even take care of myself during an extended absence from work. Craziness. Bananas. Downright wrong.

Since April, I’ve been on a silent campaign of not opening jack squat and yesterday it really bit me in the ass (excuse my language). When I took my extended leave from work, I removed all of the auto-payments for loans and utilities from my bank account. I needed to control the payments that hit the account so it wouldn’t overdraft. And I did. But I never remembered to actually pay the bills. The end result:

  • 3 months behind on electricity
  • 2 months behind on phone bill
  • 3 months behind on 4 of 5 of my student loan groups

I’d put numbers to those things…but I don’t want to cry.

The thing I realized while putting my mail in order is that I had a habit of “out of sight, out of mind.” Financially, that’s a dangerous habit and it’s scary to face that part of myself. Fiscally irresponsible isn’t something I’d ever call myself, but that stack of mail tells me that’s exactly what I am. What’s even more stressful is that I’m like many other Black women (well, women of color in particular) in that my income doesn’t just support Me. To me, I realize that I’ve been unfair to others who rely on me which makes me selfish in the wrong way.

So during yesterday’s Miss Celie Moment, I learned a lot about myself. Now I think I can move forward somewhat on getting cracking on these financial goals.

Have you ever experienced a Financial Miss Celie Moment? If so, what was it? Don’t be shy, just share it below.

*It is a great cinematic piece. You should see it. No really. See it if you haven’t already.

**I don’t want to go into why she left. But see the movie…if you haven’t already.

Monthly Money Plans (Budgeting Basics, pt. 1)

So far, I’ve shared with you all that I’m not all that great at understanding the best way to manage my money. This fact used to embarrass me and I would be ashamed to share with people who I had nice things but I was flat broke. To get away from feeling embarrassed about not having, I’d figure I’d learn a few things about money.

What I’ve come across really boils down to a few simple rules and I’m here to talk about the first one – “Money Plans.” If I described a Money Plan to you, you’d tell me, “OH! That’s a budget!” and that’s all it is. A budget is simply defined as an estimate of income and expenditure for a set period of time.

By that definition, a budget simply tells you two things: (1) how much money you have coming in and (2) how much money you have going out. You could take it a step further and identify your sources of income and itemize your expenditures (list out what you spend your money on). Today, we see and hear examples of budgets, mostly ones that do NOT work, and that’s all they tell you: how much money you project to bring in and how much money you project to spend.

With this being the day and age of spend-spend-spend, I believe that’s why a budget doesn’t work.

This is exactly why I want people to move from budgeting to Planning their Personal Finances. Let’s move from being reactive to being proactive and taking control of the emotional piece of managing money. Below are some of the “budgeting” rules I’ve come across since I’ve started looking into finding the best Money Plan for me.

Rules to Make Your Money Work for You (Budget Rules 101)

Stop telling yourself you don’t NEED a budget.

The biggest lie we tell ourselves is that we don’t need to plan what we’re doing with our money. Many of us think, “Well my bills are paid and I have money left over to do what I want.” Great! But have you ever thought how you’d handle an unexpected break from work? Do you have structures in place that serve as a safety net for you? If you do, great! Share them in the comments below. If you don’t, then rest assured that you are not alone BUT you do need to change your thinking. A Money Plan is for you and it’s essential to living the type of life you want. The first hurdle to prosperity is knowing what your situation really represents! You may live the good life but if you’re like most of us in the U.S., then you don’t live a financially secure life.

Remain emotionally connected to your money in a way that you don’t overspend.

I’ve learned in life that there are unwritten rules to the way I respond in life (people who coach others call this a “script”). The other week, I had the opportunity to listen to an online webinar and one of the exercises the speaker had us to do was to think back to our earliest memory about money. I learned that my emotional connection to money led me to spend, spend, spend and spend some more and I realized that I had to stay connected to my money so that I didn’t overspend. But you’re probably wondering how a Money Plan helps you remain connected while not overspending? It’s simple! It takes the anxiety out of having (or not having) money. Folks like me who grew up broke often stay broke because in our excitement of getting new money, we go overboard with buying things that make us feel great! By accounting where your money goes before you get it, it lessens the likelihood that you will overspend on things you don’t need.

Make a new Money Plan for each month!

This is key! A few years back, I did really well with budgeting (or so I thought). After a few months of staying on top of where my money went, I thought I had a handle on it and stopped. Now I understand that budgets don’t work but Money Plans do and it’s imperative that a new Money Plan is done each month. Just as you work hard at making sure you have your assignments for work done on time, you need to make sure you have your assignments for life done on time. Remember, your monthly Money Plan is an assignment for the life you wish to live and an essential part of creating wealth.

Create your Money Plan a few days before the new month begins.

This is the tricky part (for me). In addition to having my “9-5” job, I’m also consult on a few different projects and run my own small business centered on individual professional development (I’ll talk about this more when I get to the series on developing extra income). Because I only have one physical source of income which pays me at the middle and end of the month, the success of my Money Plan really hinges on whether I can make it to the middle of the month with a positive bank balance. Although the amount of money I make for the entire month fluctuates, I’ve gotten better at sticking to the plan and because I do my Money Plan a few days before the start of the month, I only expect my success to get better.

Review your spending habits from the month before.

The final rule that I have for myself and my Money Plan is to review my spending habits from the month before. This is where apps and online sites like I gauge the success of sticking to my plan based on the summary profile on my account. I also look at the balances in my account. So far this year, my goal with my account balances have just been to not go into the red. Starting in July, the goal will be to increase my Savings Account balances quickly. The Money Plan is the first step in getting to my savings goals and reviewing my spending habits are an essential piece to making sure I stick to it.

So that’s it. Those are my five basic rules to why managing your money really means something. Come back next time to learn about the “Zero-Dollar Money Plan” and to see an example of mine.

I’d Have to Fire My Chief Financial Officer…If It Were Me

“Pretend for a minute that you started a company called YOU, Inc., and it’s your job to manage every cent that passes through the company. If you managed money for YOU, Inc., the same way you manage money for you now, would you fire you?”

Yes. I would.

That quote above was the introduction to a Daily Bible Plan that I decided would be worth my while to read. It’s called “Dave Ramsey’s Financial Wisdom from Proverbs” and it is a 10-day reading plan that uses the Book of Proverbs to provide a biblical and practical foundation for financial peace. The description alone was pretty cool so I decided to add it to my daily reading. However, I was NOT ready for a mirror to be held up to my face so quickly. After I got over my comical “How dare he start this way?” initial reaction, I was really able to focus on why I decided to start this Bible Plan to begin with. Like many of my peers, I’m broke and I don’t want to be.

By all accounts, I’m “successful” and I’ve made it but the reality is that I haven’t. I’m a “degreed” Black woman with a “good” job that provides me some benefits outside of a paycheck. I pay my bills on time and I dress nicely. I’m the picture of “getting it together” and this comforts the people around me because I’m relatively young (only 26 years old).

The reality is that I live paycheck to paycheck. This realization was something like a gut-check. It became very evident when I found myself needing to take six weeks off from work to heal from a surgery. With only enough Paid Time Off for 13 days (less that one month’s salary), I quickly realized I had to stop all of my automatic withdrawals for bill payments.

In simple terms, I had to go two months without paying all of my bills on time and I had no money to live on (no savings…at all). That’s not having it together…at all. What was most embarrassing was the realization that I took all of these steps forward in paying down debt and cleaning up my credit only to end up in a spot where I was afraid to once again answer my phone.

That “Financial Wake-Up Call” puts me in the same boat of roughly 40% Americans who also feel they are living paycheck and/or barely treading water when it comes to their finances. In a study conducted by Allstate Financial, more than four in 10 (41 percent) are living paycheck-to-paycheck while another 8 percent say they don’t earn enough each month to pay for essentials. The three points that struck me the most were:

  • Only 46 percent of those in households making $50,000 per year or less have a retirement plan in place (compared to 89 percent of those in $75,000 or more per year income households)
  • Of the households making $50,000 or less annually, just a quarter say they have money left over at the end of the month
  • One-third of college graduates (32 percent) say they’re living “paycheck to paycheck,” compared to nearly half (48 percent) of non-graduates.

And at the end of the day, I hope to become one of those people who can share the steps I took in getting on solid financial ground with others. Perhaps, what separates me from my peers is that I am beginning to understand that thoughts really are the foundation of the lives we make for ourselves. Just think of the phrase “Thoughts Become Things” and then look at the evidence of this in your life. It’s there. But I want my thoughts to create more than just prosperity for myself.

With that, I invite you on this journey of my thoughts and the new habits I build as  I create wealth my way and define my financial future!