I’ve Gotten Myself Into a Financial Pickle . . . This is How I’ll Get Out
Can a financial coach get herself into a precarious position financially?
Um . . .
Yes . . .
Because life happens to everyone.
In April, I unexpectedly lost my primary source of income, right after I drained a big chunk of my savings to pay for oral surgery.
I half-heartedly looked for a “real” job while I got my dream business (this one) off the ground. Start-up costs were also a big chunk of change.
Then I helped my kid move in. Cha-ching!
Oh, and there was that $700 car repair.
Despite all those expenses, I don’t think that’s what got me. I think it was the unconsidered increase in everyday living costs like groceries, car insurance and gasoline that happened when two of my kids moved in with me full time, and I started delivering food as a side hustle. (We’re talking 3X the groceries, 2X the car insurance and 6X the gasoline!)
But however it happened, here we are. And I’ve got to do something about it.
I’ll be super transparent. As of last week, I had $100 in my checking account, $1 and change in my savings account, and $218 in my emergency fund. I owed over $1600 on my credit card. Even though I have a reliable income now, I wasn’t able to pay my credit card in full last month–for the first time in YEARS.
It all felt so overwhelming and scary. I had to get real with myself and take an honest look at the whole picture of my finances so I could figure out what to do next.
Luckily, I know a thing or two about helping people get out of financial messes, including myself! I know what steps to take. I have a plan, and here it is:
Increase my income–I’ll put in an extra day delivering food each week, which should increase my monthly income by about $500.
Decrease my expenses–I quit my beloved music lessons. Even though I didn’t want to. Even though I waffled about it for weeks. Even though I cried about it before, during and after the fact. We’re also cutting out restaurants, and I’ll reduce my grocery bill as much as possible by shopping my pantry and freezer, and being more creative with what I already have on hand. And definitely no food deliveries. The Dasher’s children have no deliveries.
Pay down my credit card–Even if I can’t pay it all off this month, I’ll pay it down as far as I can. This will reduce the amount of interest I’m paying overall. I’ll pay it off by next month for sure.
After that, I’ll save like crazy–I’ll build back the buffers in my checking and regular savings accounts, and I’ll put extra padding in my emergency fund. That way rainy days or months don’t become scary disasters.
By the way, here are a couple of things I’m NOT doing:
I’m NOT taking money out of my retirement account.
I’m NOT getting another credit card.
Enough said.
After just one week, we’re already on a more stable financial footing. My daughter who moved in with me six weeks ago just got a job, so she’ll be able to contribute to the household expenses soon. Doing more food deliveries is exhausting, it's unsustainable for me in the long run physically, and I seem to have a perpetual pile of dirty dishes at home now. But it’s all going to help us get where we need to go, and I know we’re going to be ok.
I’ll keep you all updated on our progress.
If you’d like to take advantage of my expert (and recently tested) financial know-how, you can schedule a coaching session or free consultation here.