I was reading the BudgetingBabe today and this post got me to thinking about our (my wife and myself) financial journey. When did we get started? What circumstances or points of time made the most difference in our lives?
Financially speaking, two events really stick out in my mind as making a positive difference in our finances:
1. My wife signed up and contributed the maximum to her 401(k) as soon as she was eligible. This was huge. Sure, it took a while for the account balance to grow but we now have a comfortable nest egg that keeps growing every year. We also were able to use part of our 401(k) to buy our house, which also turned out to be a good deal.
2. The second major thing that helped us turn our finances around was the debit card. No more credit cards! The problem for us with credit cards was that we would spend money and forget that we spent it until the bill came in the next month. I know that is really stupid and irresponsible, but that’s the way we were back then. So, once we got our debit card, which acted like a credit card, we cut up all our credit cards and went strictly with it. If we didn’t have the money in the account, we didn’t buy anything. Once online banking became useful, the debit card became even more powerful.
I know I said “two events” come to mind, but I can also think of one more that was really beneficial to us: 0% credit cards. We moved all of our credit card debt to 0% and have been working on getting 100% credit card debt free. That should happen within the next couple of months.
So, what’s my point in all of this? For one, you have to start from where you are. Don’t put if off another day. To do that, you must figure out exactly where you are. Put together a cashflow statement (budget) and a net worth statement. Once you figure out where you are, then you start taking steps to make things better.
Remember, you have a lot of personal finance bloggers who are on your side. Just look at my Personal Finance Blogger Links. Every single blogger on that list is an excellent resource. We ALL want you to be financially secure. However, YOU must make the decision.