I didn’t always enjoy tracking finances. In fact, I only really paid attention when I had a money problem. Then credit card debt grew and I almost tried to ignore it all together.
I was just getting by paying minimum payments, hoping I make more money one day and living in the mindset of “it’ll all work out” with no real plan in sight.
By the time I came out of my self-induced coma of ignoring my credit card debt, my CC debt had grown to over $20,000.
Have you ever ignored something until it was out of control? I did. I didn’t even know percent interest I was paying on my credit cards. I didn’t understand what compound interest is or how it’s basically highway robbery of your hard earned money.
So how did I get motivated to turn things around? I learned a little here and there about how to build wealth and decided I wanted to be self sufficient.
1. I learned about investments. Cause that’s fun right? But it can be risky UNLESS you’re in vesting in low cost ETFs. They are index funds that track with the stock market so historically they can get you 6%-10% return on your money.
2. I got interested in buying a home cause I didn’t want to “throw away” my money in rent. Now, let me be clear that I think nothing is wrong with renting but at the time I was following conventional wisdom, not actual wisdom. I can explain more on that later but when I got interested in buying a home, I started paying attention to the things I needed in order to do that.
What did a pay attention to? My credit score, my debt to income ratio, and saving for a down payment.
3. Finally, I became motivated when I broke up with my toxic ex and realized I wanted to be a fully self sufficient woman who never needed anyone at least for finances and to always feel I could walk away from someone if need be without being in the poor house.
So all of these things came together in a big way. I started to look at my current interest rates I was paying. I realized I was paying 24-29% interest on many of the credit cards!!
Then I realized each day that money sat and accumulated interest, I could be paying 100 times the original money spent! I needed to stop the bleeding ASAP or I was never going to get rich or be financially stable.
See, when I ignored it, as many people do, I didn’t understand it and I thought it would just magically resolve one day. It won’t. If you’re in high interest debt, figure out how to pay it down ASAP. By high interest, I personally feel anything above 4%. In my next post I’ll cover how to tackle debt.
Anyway, if you or anyone you know, has ever ignored their debt, had no idea what interest rate they were paying and I feels completely lost. I want you to know I’ve been there and I want to help. It can be daunting but after a while not only is it second nature, it’s actually fun! Who doesn’t love money!?
My next post will be on how I tackled debt and tips on how you can too. Believe me, I looked at all the options. I forgot to mention part of my job is doing expert research so when I tell you I searched high and low for options, I did. I’m happy to help break it all down for you too.
So tell me, what motivated you to take control of your finances? Have you ever or are you tackling debt?
Let me know if there’s anything I mentioned here I should cover more in depth. Critiques are welcome!