Almost all of us have financial skeletons in our closet. Whether we knew it was a mistake when we made it, or realized it shortly thereafter, we seem to have those “ouch” moments that we’re embarrassed to talk about. Well ladies, we can’t change the past, but we can change the future. You should never let these financial failures prevent you from seeking out change for your future financial selves. Please don’t ever be embarrassed to seek help for the fixes. There are those people out there who will take advantage, but don’t hesitate to ask someone you trust for some financial advice. Whether it’s an Advisor, life coach, therapist, family, or friend, you can figure it out. Money can be one of the biggest stressors out there. Here are three of the most common financial failures and how you can take steps to fix them:
Too Much Credit Card Debt
Carrying too much credit card debt on high interest credit cards can really stress a gal out! Sometimes you make the minimum payment and realize it’ll take you 15 years to pay off. You have six or ten credit cards maxed out and it’s all you can do to keep from tearing your hair out. Here are two solutions for you:
- If you’re able to pay off the debt in a short period of time (within a year or eighteen months), open one more credit card with a “No interest” period of 12-18 months and do a balance transfer to this card from the rest of your cards. This alone will eliminate the interest and all of your payments will go toward reducing the principal. Now, this might sound like the full fix, but you also should cancel and cut up those other cards so the temptation is not there! I personally have had about 10 credit cards open at once for all the sign up bonuses, but it got unmanageable. I finally, just recently, dropped it down to two. One for travel and one for emergencies. I feel so much better now!
- If you need a longer period of time to pay off the debt, consider getting a personal loan at a local bank or credit union, or even online. Depending on your credit score, the amount of the loan, and time period, the interest rates will vary, but unless you have a really bad credit score you should be able to keep it under 15%. More likely it’ll be around 7-8%. That’s still better than the 23%+ of your credit cards. This will give you a scheduled monthly payment for a time period where you can get that debt paid off. Again, cut up those cards ladies! Getting the rewards is not worth the debt it could cause if you can’t control your spending.
Savings may not seem that important in your day-to-day life, but what happens when your roof falls in, or you lose your job? All of a sudden you have a huge bill or no paycheck and you have no backup! So, what do you do? You put all of your expenses on credit cards! The last thing you want to do when you have an emergency or lose a job is to rack up debt (see above for debt solutions). If this has happened to you, you would not be the first! I know it has happened to me. To fix this lack of savings from the past, start now!
Now, I’ve talked in previous blogs about how to save and what you can do with it, and I still recommend a high interest online savings accounts that you put a certain amount of money into every month. Some are paying 2.3% now. That’s better than the .1% your bank likely offers. You an even just do $50 or $20 per month! You just have to do it. Tell yourself that the savings is more important than one dinner out that month. Put it in a place that has no debit card attached to it, so you’re not tempted to spend it. Make that emergency fund grow!
Buying a Car Out of Your Price Range
It’s so tempting these days to have all the gadgets and electronics in your car. But, if you can’t afford it, do you really need it? Check yourself before you wreck yourself! You don’t want to be saddled with a monthly car payment you can’t afford! I challenge you all to check the interest rate on your car loan right after you’re done reading this. It’s possible that you could refinance your car loan through a bank or credit union to a lower interest rate! Look into it. It might lower your car payment!
The more expensive the car, the more expensive the insurance! In my experience most people have the well-known insurance carriers. You know the ones I mean. I have to be honest, those usually aren’t the cheapest policies. I challenge you to find a local insurance agent. A general one, not one that works for one company, but one who sells many different types. When I did this, I switched to a lesser-known carrier and my car insurance dropped by $20 per month! Working with an agent costs you nothing, but can save you a lot!
These are just some small ways to fix some common mistakes. There are also financial moves that can’t be fixed short-term. For me, that’s my $200k plus in my student loan debt that just keeps growing. I can’t fix it now, so I have to emotionally deal with it. That’s a whole other story. I’ll tell you about it someday! Sometimes the best thing you can do in life is learn from your mistakes. Financial living is no different. If you have a good financial failure, don’t be ashamed, comment on Facebook, or message me directly. I bet I have some tips for you!