I hear from a lot of people who are struggling financially.
And as you know, we are just coming off of a four year period where we almost lost our house and were on the verge of losing everything.
Digging ourselves out of that hole has been one of the hardest things we’ve ever done.
But it’s also been one of the most educational, one of the most eye-opening, and one of the most rewarding experiences of my life.
It has only been a few months now that we’ve been able to cover all our expenses and start to save some money. We are slowly building up some savings.
People have asked me how we got here.
It has been a long road.
But there is one big thing that has helped.
It’s probably obvious to many people.
But to others, I think maybe it’s not.
And now that we are slowly coming out on the other side, there are plenty of things that we’ve done that are important.
But one thing is crucial.
And it doesn’t require much. You can easily do this no matter what situation you are currently in.
All you have to do to start is know the answer to one question. One question that every woman and man should be able to answer.
Whether you are the breadwinner or not.
Whether you work full time or part time or not at all.
Whether you pay the bills or not.
Because you never know where you will find yourself.
But also because ignorance is not bliss.
Ignorance may be easy. It may allow you to live in denial. But ignorance is dangerous.
Especially financial ignorance.
So that question you need to be able to answer?…
How much money do spend every month?
Not on like, shopping for clothes.
But on every single thing you need money for.
Some of you may be saying, “Um… what? Doesn’t everyone know this?”
But you’d be surprised.
Number 2 recently got his license.
But we only own one car.
If Number 2 wants to drive, he is responsible for buying a car and for paying for his insurance. And gas.
So as of right now, he is not driving.
Auto insurance for a sixteen-year-old boy is very expensive.
UNBELIEVABLY EXPENSIVE.
Depending on your insurance company, it can run anywhere from $100 – $500 a month.
A MONTH.
So I was recently talking with a mom who has older kids who drive, and I asked her how much the kids’ car insurance cost, and she said,
“I have no idea.”
I was kind of in shock.
How do you have no idea how much you pay for car insurance?
Then I remembered that a couple years ago, I was her.
My husband handled the car insurance, and I had no clue what we paid.
It is very very difficult to get a hold on your finances if you don’t know what you are spending every month.
And I get it if you are in financial trouble.
I used to have piles and piles of unopened bills in my office.
PILES.
I didn’t want to open them. I didn’t want to look at them.
Sometimes, I’d realize it had been days since I’d gone to the mailbox.
Because I just didn’t want to face what was in there.
It was too much to even think about.
But it didn’t help my situation.
It only added to the stress.
So, if you are in massive debt, if you are robbing Peter to pay Paul, if the Man from the power company is regularly knocking on your door to tell you he’s about to shut off your power, if your credit card has been declined after you’ve had a couple hundred dollars of groceries rung up and there are five people in line be hind you, if you are receiving those envelopes stamped with the big, red CONFIDENTIAL from the mortgage company on your front door knob, if you are borrowing money from family, if you have filed for bankruptcy, if foreclosure proceedings have begun on your house, if you stopped answering your phone months ago because you don’t know what the hell to say to the bill collector(s) that are on the other end of the line, if your car, or even more embarrassing, your garbage cans have been repossessed, (and I have experienced all of those situations), the first thing you need to do is be able to answer this question:
How much money are you spending every month?
Even if you don’t actually write out the checks, you need to know.
First, it is not fair to put all that stress on your spouse.
But also, it is possible your spouse doesn’t know either.
What is your electric bill each month?
What do you pay for car insurance?
How much money are you spending on food every week?
How much money are you spending on gas?
How many credit cards do you have balances on and what are the minimum payments?
What do you pay for cable?
What’s your cell phone bill?
What cell phone plan do you even have?
Every bill. Every expense.
If you are in financial trouble but don’t know the answer to all those questions, you are making it much more difficult to change your situation.
And believe me. I understand how much easier it is to pretend like it’s not there. To not add it up. To ignore it.
That only makes it worse.
So start there.
Make sure you know exactly how much money is (or should be) going out to cover all your expenses every month.
If you don’t know this already, it may take some time. When you are in denial about your expenses, you may not even realize how many things you are paying for. Give yourself a few days to gather this information.
Until then, open your bills. Make sure you know what your monthly payments are. Write them all down.
I know it sucks to deal with this stuff.
But once you pull your head out of the sand and address the situation head on, you at least switch on a light at the end of the tunnel.
And while you may not be able to see it yet, once you stop living in complete denial, that light is there. And now you have started the ball rolling to financial stability.
You’re a good teacher.