How I Simplified My Finances

So it’s a new year and one of the first things people talk about getting a handle on, besides their pants size, is money.  I am not a financial advisor, but I have learned a lot about this topic through much personal trial, error, and one failed marriage.

At the collapse of my first marriage, I was left in financial ruin.  He and I were very irresponsible with money and when I came to realize that we were in trouble, it was nearly too late.  There were Harley Davidsons, modified Mustangs with custom stereo systems, tons of clothing and no investments. No savings. No positive balance in the checking account. In fact, there was a few times that I had to raid the change jar for groceries.  Once I financially sobered up but he refused to do the same, I knew that it was the beginning of the end and I had some hard choices to make.

I tried to change things for the better on my own by getting an additional job, but my marriage had become an anchor that was sinking me too fast for me to make any real difference.  After leaving the Marines, my ex-husband was in and out of work and yet he wouldn’t stop spending.  Finally I had to end it. The day that I forced him out I discovered that I had been driving without auto insurance for more than a year and that we were behind in our rent.  I even found a stack of envelopes hidden behind dresser drawers that were addressed to me from an assortment of banks.  All of the accounts were in the negative.  I had no idea…but actually in my gut I did know but was too insecure at the time to fully confront the issue any sooner than I had.  I had to learn to forgive myself, and eventually him, otherwise I would never fully heal.

Thankfully I was not in enough ruin to warrant filing bankruptcy…but was in trouble enough that I had to have my full time job plus two part-time jobs PLUS freelance paralegal work to sort it all out.  At the time I was childless so it was a tad easier for me, but as a mother now I would say that the situation would not have been impossible had I had a young one.  At the worst possible time my paid for car – that I had bought back from the repossession yard – completely died.  So I pulled a car loan at a ridiculous rate, and got two credit cards with even more ridiculous rates and set out to work the situation.  I was not going to go out like that!

Within 4 years I was debt free.  Within 6 years I bought a house.  Within 7 years I had more life insurance, a Medical Directive, a Will and a Trustee plan for my son.  Within 8 years I restored my credit to perfect. And within 9 years I have worked our household budget to less than $3,000 per month for three people and that includes my mortgage…I also did this all on my own.  My husband has determined that it is more worth his time to focus on his art than work in conjunction with building his art career.  I do not agree with this, however I am the sole provider and I have to keep going.  Hopefully one day we will come to an agreement, if not then I will have to make yet another major decision…

Being meticulous with money builds wealth.  There isn’t any other way to do it.  You will soon realize that it really isn’t what you make, it’s what you do with it.  What I’ve done is possible for anyone to do. Anyone. But I’m looking at you single and divorced ladies out there – especially if you have kids.  Money management doesn’t have to be scary and it’s too costly not to do.  As you progress along your financial journey, you will hear many schools of thought, beliefs, systems, products and ideas.  Take what makes sense to you and your life currently, but set a foundation that is strong and filled with discipline and you will be unstoppable!  Below is how I did it, and I’m betting on you that you can do it too!

You can do it!

Get Organized.  Gather your online banking information as well as every single statement from every lender and expense that you have. Go to the dollar store with $3.00 and purchase a binder (more on that in an upcoming post), a notebook, and a calendar.

Budget. Take a really good look at your numbers. You’re not going to get anywhere by skipping that step.  If what is going out is more than what is coming in then you have to take immediate action.  This topic is saturated with information and gurus.  Google “establishing a personal budget” or search “personal finance” on Pinterest and you are going to hit the mother load of great stuff.  Pick what interests you and learn tips that fit your lifestyle.

Mark your calendar: Place every single due date down on your calendar. Eventually you will get so good at paying everyone on a system that you won’t really need to remember dates. However, for now…you need to see when everything is due by and make a sure plan to get payments in on time every time. If you pay your car lender late, odds are it’s about 15-35 dollars for a late fee. If you pay your mortgage late, it’s 35 dollars on the 16th of the month. If you pay your credit cards late then it’s 35 dollars the day after the due date. So let’s just say you pay everything late one month then with three credit cards, a house and a car that totals $155 dollars in fees.  That is a complete waste of money and you would do better just throw it out your car window while driving down the highway!

Stop spending.  Self explanatory.  I’m a reformed shopping addict. Albeit my college aged addiction lasted only a year, but it left me with $8,000 in debt. It took me two years to pay that off and I couldn’t even remember what I bought.  I try not to think about all that I could have done with that money, time, energy; that’s a couple of trips overseas.  When you want to spend money ask yourself this: Do I need these items? Do I already own something like it? Will I want it/will it last 5 years from now? How can I purchase this less expensively?  Make a list of things that you want to buy and then put it away for a minimum of 24 hours.  You may find that by then you don’t even want it after your waiting period.

Get to the root cause of your spending. Understand that eventually – as you build up courage – you’re going to have to figure out what the underlying root cause of your lack is.  Do you feel unworthy? Were you taught that money is the root of all evil? Do you feel that everyone but you should take care of you? Are you waiting to win the lottery? Do you shop to numb pain? Money is just a tool for life here on earth. It’s earned through energy, and it’s spent through energy.  How you feel about it and how you treat it will be reflected back to you in your daily life. It’s the laws of physics.

In the beginning of my money journey, the financial immaturity was all about numbing feelings I didn’t want to explore, and waiting for someone to rescue me.  The last of which will never happen. And even if someone does rescue you, without doing your own work to change your financial future, you will become dependent.  Dependence upon another person(s), or a system will not last.  In fact, you are setting yourself up for major life upheaval and it won’t be pleasant to go through.

Open 1 additional checking account + 1 checking account for any hobbies or businesses and 1 savings account + 1 savings account per child. Hook these accounts to your main checking account, but do not get a debit card to any of them with the exception of hobby/business account.

Develop a system.  Then marry it.  Once you have all of the above steps completed, and it may take you a few months, then you are ready to watch my instructional video below to help you create your own working bookkeeping system.  Understand that money is neutral and takes on the emotions and meanings that we assign it. While we work that all out, we need to put our money to work for us as well as keep it organized and nurtured. Also understand that just like a marriage, your money system is a viable and evolving thing.  Needs and practices will change.

Click below to watch the entire instructional video.

YouTube Video: Simplifying Finances

• jennaprosceno.com Simple Series

If you enjoyed this post then be on the look out for the upcoming course where I go more in-depth on the categories in this series.  The course will come with a free e-book, but the e-book will be available for purchase without attending the course.  Please subscribe to this blog, or to my YouTube channel as both will have the release date announcement.

Next up in the simple series will be Simplifying Divorce.  It’s nasty topic, but someone has to talk about how it doesn’t have to be.