Getting your finances in order

Hello dear readers. I know it has been such a long time since we have posted on our blog. Between Shevaun's move to her first duty station in Hawaii and her husband's first deployment and my own long-term illness, it has been a struggle getting through the day-to-day activities let alone our hobby and business building. So, I think it fitting to discuss getting your finances in order as the beginning of this year as already come and gone! Many of us are mothers who are in families with only one income, our husband's. We are forced to learn early how to find deals, cut unnecessary expenses, and sacrifice our wants for the needs of our families. The first suggestion I make to families who live on a strict budget is to make a list of your necessary bills. For example: Rent/mortgage, electricity, phone, water, trash. Those are the necessities. Then follow by making a list of your other bills. For example: Cable, Internet, car payment, cell phones, car insurance, and credit cards. After you have made this list, put the average monthly amounts that you pay for each next to them. Remember, this is just an average. So, say you pay $700 for your rent. You would list that next to RENT. Obviously, some bills vary month to month, so that is why I suggest you put an average payment. You really get a sense of where your money is going during the month this way. Next comes the extra necessities: Food and gas! Many people, when they make a budget forget about these necessities. The key to this exercise is to see what your total debt is and how to get it down as much as possible in as little as time as possible so that you can be better off down the road. When it comes to credit card debt, list the total amounts that you owe as well as what you are expected to pay each month. Keep in mind that if you are making the minimum payment on these, you will take a long time to pay these off. My suggestion would be, if it is within your means, to double your minimum payment each month or at least try to pay a little extra depending on what your minimum payment is. If you have a high interest rate, i.e. 21% (which is ridiculous), I would suggest closing the account and paying it off in regular installments. A reasonable rate for a credit card is anywhere between 12-14% for someone with an average credit rating. However, if you have a good credit rating, you should not accept anything above 10% interest rates. Many of us live paycheck to paycheck, and the only way to get out of a majority of debt is to determine what our needs are versus our wants and stick to the needs list at least until you have downsized your debt a bit. Building a savings account is also very important. Most of us can't afford to put that much into savings. So my biggest suggestion is to start with $10-20 each paycheck until other debts are paid down and slowly increase that amount. This will allow you to not rely on those credit cards anymore for purchases as you will have a cash base you can go to. I am not ashamed to say that my husband and I are in the same situation as many active duty military personnel. We are working on paying off all of our credit card debt so that we have a larger sum in our savings for emergency purposes or for larger purchases that we do not want to charge. It is doable, no matter how much you owe. The key is to talk openly with your partner, look hard at your needs vs. wants list, be honest about your bills, and if possible buy things second hand. I recently outfitted my son in a 4T wardrobe of summer and winter items (minus socks, underwear, and shoes) for $40 and they are all well cared for items. I did this by looking on a local site in my area called lejeuneyardsales.com. You can do the same by looking for gently used items for your children (because lets face it, kids are expensive), by going to yard sales and looking at second hand websites like the one I use here where I live.