Archive for Debt

The F Word…

Posted in Uncategorized with tags , , , on June 4, 2012 by MD

No, not THAT F word, but the other one that most of us cringe when we hear: “finances.”  I think it’s safe to say that most people long for financial security, but only a handful of us (at any age, much less in our 20s-early 30’s) know how to get there.  It’s not fun, but necessary.

I tend to be somewhat of a financial worrywart with a touch of paranoia on the side,  I have a strict budget, great credit, and an emergency fund but I always worry about a financial iceberg of Titanic proportions sinking my finances.   I think one thing that the Great Recession has taught us is that nothing is guaranteed, especially jobs and a steady income.  Also, being young and on our own, we’re bound to have some financial immaturity (c’ happens to all of us, whether or not we like to admit it…) which has probably left for a few messes to clean up.  At this age, we’re not necessarily looking for Warren Buffett investing tips, but just some sound advice to have our everyday finances on track that will set us up for future security.

Fortunately, I ran across a great article a few weeks ago from Forbes that laid out a few key things that tend to be roadblocks for 20-something women.  Some of them are common sense but go into greater detail and some of them are ideas I knew but haven’t given serious thought to until now (how many of us have side ventures?  And if you do, kudos!)

I’ll be glad to grade myself on these, and I realize that I’m my own worst critic.  At least there’s always room for improvement, right?

1. Debt– Ugh…I have some credit card debt (from my younger years and a divorce) and a ton of student loans (thank you out-of-state tuition).  The good news, I make more than the minimum payments and have mapped out a plan using the snowball method to get it paid off in less than 10 years (and for the amount I have in student loans, I feel pretty good about it).  I’m also not taking on any new debt. The bad news, I have debt.  Grade: B-.

2.  Not Saving for Retirement- I’ll be honest, when I first graduated and got that entry-level job, things were uber tight (granted, they’re still tight), and every little penny went to just getting by.  I didn’t put a single dime into a 401k which included ignoring my company’s match.  Stupid, stupid!  I’m still kicking myself for that, but at least I’ve learned the error of my ways.  Even if it’s just 1% of your gross income, it’s better than nothing.  Don’t keep putting it off, as it adds up in big ways in the long run! Grade: D

3.  Not Starting a “Side Hustle”- This has been something I’ve thought about doing, but haven’t come up with anything yet.  Must.  Get.  On.  It.  Grade: F

4.  Not having the money talk when a relationship gets serious- I’m paranoid about my finances, and I’m not letting some guy ruin them, so yes.  I have the talk.  Granted, I’m single and have been for over a year, but I’m pretty good about swallowing my pride and being upfront.  Grade: A

5.  Foregoing the Emergency Fund- I’ve got one.  It’s not too shabby.  Portion of my paycheck goes in it, but I feel like I’m never saving enough (don’t we all) and it definitely could stand to be larger.  I believe it’s 6 months’ salary to be the ideal cushion?  Yeah, not there yet…  Grade: B-

6. Paying Yourself Last- I kind of do this.  I have to remind myself that seeing that money leave my checking account is not actually money “leaving” as in being “spent”, but going into a safe little haven where it won’t accidentally get spent (so settle down panic attack!).  Grade: C+

As you can see, plenty of room for improvement.  I may have graded myself a little harsh, but I always find it helps to be brutally honest with myself.  Otherwise, the only person I’m hurting is me.  How do you stand in the financial landscape?