If we are going to start on our road to financial independence, we have to start with a solid foundation. Without a solid foundation we will just be spinning our wheels in the mud and going nowhere. Most people call this being up sh**’s creek without a paddle. Even if we are flat broke, and I mean flatter than a white lady’s butt who voted for Trump, we can still lay a solid foundation to our finances.
First thing we need to do to set our foundation for financial independence is assess our situation. We need to sit down and look at the overall state of our finances. This was something that I had to do and redo often. I literally had to make myself sit down and write out every expense that I had. Just in case you’re curious that list consisted of Comcast ($154), Utilities (about $200 depending on the month), Hulu ($7.99), Netflix ($8.99), Mortgage ($1684), Car Payment ($500), Student Loans ($200), FiveFour Club ($60), Gas ($120), Grocery ($300). If you do the math on this it comes out to be around $3,185. I only bring home about $3,250.
As you can see I was kind of living check to check. Once I made this list and assessed my situation, I was able to see where all my money was going and areas that I could have some potential savings, which will lead into my next point.
You have to cut back on spending. If you are going to be serious about this financial independence thing you are going to have to cut back on spending. I know it sucks. It sucks so much that it’s uncomfortable. If it was comfortable everybody would be doing, but that’s not the case. If you were like me, I looked at my list and said to myself “I need all of these items.” I quickly had to get out of that selfish mentality. I literally looked at my Debt Figurative Drawing and said to it, “You aren’t going to win this battle!” When I did this it was like a light went off in my head. I immediately saw where I could cut back. I stopped doing the FiveFour Club (men’s clothing subscription service) every month, I cut back on trips in my car which helped ease my gas bill, I went on a po’ man grocery list which almost cut my groceries in half, I cut the cable cord and just kept internet service, and I was able to negotiate with the utility companies to have a flat rate for service every month. By doing these things I was able to save almost $400!
So, I had an extra $400 a month. My mind was saying spend the money, but my heart was saying don’t do that! I had to figure out what to do with the money. This brings me to the next point. YOU HAVE TO HAVE A PLAN FOR YOUR MONIES! Like I did, you too will need to set some type of money goals. Some people might want to save to have an emergency fund and others might want to start tackling their debt right away. I suggest that you build an emergency fund with two to three months expenses. Once that is complete then you should start tackling your debts.
Let’s recap. If we are going to start our road to financial independence we must first ASSESS OUR SITUATION, next we must CUT BACK ON OUR SPENDING, and finally we must CREATE A PLAN OR GOAL FOR OUR MONIES. If you do all these things then you can start ATTACKING the debt instead of it attacking you.
Here is your homework. Create a budget and share it with me. Let me know the areas in which you saved money or will be able to save in the future.
(If you aren’t sure how to make a budget, there are tons of free templates and free services available online)