Friday, February 20, 2009

Eliminating Bills/Debt....contiuned series...

Now that my baby is taking her nap, I'd thought this would be a good time to post the next topic in this financial series regarding SAHMs and money...enjoy!

Some debt quotes to get us started and to lighten the mood a bit.......

"The only man who sticks closer to you in adversity than a friend is a creditor." ~Author Unknown

"In God we trust; all others must pay cash." ~American Saying

There are plenty of ways to get ahead. The first is so basic I'm almost embarrassed to say it: spend less than you earn." ~Paul Clitheroe

Today, there are three kinds of people: the have's, the have-not's, and the have-not-paid-for-what-they-have's". ~Earl Wilson

I selected each of these quotes for 2 reasons: 1. it brought a smile to my face and 2. they are true in every sense of the word.
We all have debt. We all have bills. However, there is a HUGE difference between the 2, from my perspective. Bills are things we NEED and that are on-going. Examples would be Mortgage/Rent, car payment, insurance, savings (yes, think of it as a bill), misc (cause something ALWAYS will come up), food, gas, utilities (water, phone, heat, electricity), and household (daycare, toiletries, diapers, etc)
. These bills will probably be around for most of our lives and will be money that we'll have to pay out matter what.

Now, let's move on to Debts. Debts are NOT things we need but are created by things we want. For example, having a house isn't a debt, BUT having a house that is too big for you and your family and that require more upkeep and money than what you bring in every month is debt; because if you don't bring in the money, where's the rest coming from? cards!

We remember, at least I do, going into Macy's or our favorite stores and seeing an outfit or pair of shoes we love. They just seem to have kept calling our name, begging us to purchase them and take them home with us. Sound familiar, doesn't it?! I made bad decisions like this on the whim, just figuring I would worry about it later. I thought I was young enough where I could bounce back...but boy was I WRONG!

Debt is also create when we WANT, yes, I said WANT things that costs too much but for appearance purposes we stretch ourselves and our wallets to full capacity. We don't need an Cadillac Escalade when a Toyota Corolla will serve our NEEDS, but we just have to have the Escalade because we like SUV's, or it's nice looking, or we want to keep up with the Joneses. I have to admit, I was like that. I didn't care that it was too much for me or that I couldn't afford it; I just wanted what I wanted. As a result, it take years to pay off, leaves you broke in the meantime, and with more than your fair share of grey hairs.

Now, don't get me wrong not all debt is bad...Mortgages, Student Loans, Car Loan (on a car you NEED); these are good debts and wont harm your credit score too much.

But, then we have those bad credit cards/unnecessary personal loans....(all types of credit cards, i.e. store cards, gas cards, etc.) I remember someone saying, 'if I don't have the cash or money in the back to purchase an item, even if it's a good sale, I don't buy it because it's not a sale for me." How true is that statement! If we all thought about every single item before we bought it to make sure we really needed it, we wouldn't be in this economic mess to begin with. But the fact of the matter is, we as Americans feel as if we can't go without. That we want what we want NOW!! No Exceptions!! We don't want to wait and save and work for it, so we will charge it and worry about it later...OR we'll just pay the minimum balance on the credit card, refi our house, take out a loan, or something else.

In order to become free of these bad habits, we must admit we have a problem, find a solution, and then carry that solution out. I knew if I wanted to have money tucked away for my family that first I'd have to put a stop to buying stuff I didn't need, especially when I would never even use it. It would just sit in my closet or I'd give it away or throw it in the trash. I knew I needed to confront and get rid of any debt we had, then start saving some money..seriously. When something happened with the car, we'd have no savings and all the credit cards would be maxed out; so we'd have no solution; nope none at all!

I hated living like that and so did my husband...if we wanted to buy a t.v. or go to dinner we couldn't because we had no money and all our bills weren't even paid yet. He would work and work and work and couldn't enjoy the fruits of his labor because of my bad habits. I'm so glad we made a turn around. I really am...we sleep better, arguments are much rarer, we have a peace of mind, and our relationship is better. Like I mentioned before....all the student loans are current, both of our credit cards have $0 balances, no car payments (we just keep driving our 10 and 14 year old cars), nicely funded savings account, and over 4 months of our living expenses saved in another account..along with a Christmas and Vacation funds.......and now we are moving towards investments; all with 1 income!

Keep in mind we still have bills just like everyone else, but we choose to limit our bills and put that money away. We have wants; don't think for a minute we don't. This gives us so much more fulfillment than shoes, dresses, and even going to our favorite restaurants.

If you see yourself in the same boat we were in...start by looking at your bank statements and taking note of where all of your money is going to. If you see that you have more bills/debt than what your bringing in..find ways to reduce and put that money aside in a savings account. Trust me, you'll thank yourself for it later.

Tune in tommrow for the last post of this series....Investments/Retirement.


Kristen said...

Thanks for your comment on my blog and for your topic of post for today! We are back in school and back to loans and my sort of income I make working one or two nights a week at the hospital. We have learned to differentiate between needs and wants, but sometimes it is hard to give up what you want.

Sheena said...

No can be VERY hard to give up what you want...but think of this...if you went to the doctor and he/she told you that if you smoked one more cigarette that you'll drop dead, would you stop? Of coarse you would! Even with the strong addiction, you'll find a way to give up smoking because your life depends on it. We have to have the same mentality with becoming financial free.

Thanks for visiting.

Clenece said...

Thanks for sharing all your ideas on your blog. Great Tips!

Sheena said...

Thanks Clenece!

Steph said...

Thanks for visiting my blog thru ring around the blog. This post was great. Keep up the good work on this blog!

Sheena said...

Thanks for your kind words! Welcome and don't be a stranger! :-)

Bethany said...

Thanks for stopping by my blog. I love that you are talking about money and how we handle it. Unfortunately, I was laid off from my job last April (while on maternity leave). No big deal we thought, we can live on hubby's paychecks and I can stay home with my newest addition (like that was a hard decision for me!). Everything was going great until hubs got laid off in November. I have never been so glad that we have no credit card debt or personal loans (I'm a bit older than you so my student loans are paid ;) ). I'll be doing a post about how God has blessed us in this time, I hope you'll stop by again.


PS. Your daughter is gorgeous!