Frugal Philly presents

What I keep hearing, at least for the last few months is "things have got to change in 2014" and "if things don't change (financially) I don't know what we will do."  I have a bit of a problem with that statement.  It's not "things" that have to change, it's you!  Things won't change unless YOU make them.  They don't fix themselves and they don't go away.  It's up to you, and the big questions for 2014 is how uncomfortable are you willing to get to make it happen?  Is it really, really important to you to change things or are you just talking? 

When I ask how "uncomfortable" are you willing to get, I am usually stopped in my tracks because the answer is "I'm not."  I'm not willing to give up anything, change anything, do anything, but "things" need to change.  I have gotten to the point that before I take on someone as a client I will ask simple questions just to see how far they are willing to commit to making changes to become debt free, to change their lives and to have peace financially.  I ask them "are you willing to cut your cable?"  I know that is going for the throat in many households, but it is a good barometer of what you are willing to do.  If you can't at least be that "uncomfortable" temporarily than are you really serious about doing "whatever it takes"?

I work with people that are on the verge of losing everything, and I mean everything.  Yet they are not willing to give up all the frills on their phones, cable TV, eating out, vacations, new cars...and the list goes on.  Not even for a short time until they are able to pay cash for the things they want or need. 

So do "things" need to change in 2014 for you, or are you going to change "things?"  Do you want to be debt free?  Owe no one except maybe your home mortgage?  Maybe not even the home? Wouldn't it be great to be a little "uncomfortable" now to change your future for the better? Earl Nightingale once said "When it comes to accomplishing a goal:  It is not what you do to get it, it is what you give up to accomplish it."  

 

So let's start with writing down all your debts.  Be honest, too!  Write them all down.  It's for you, no one else has to see it.  Don't forget food, clothing, and every other thing you consistantly spend money on.  If you go to the movies every week, then that is a bill in my book; write it down. Now for the hard part.  Look at those bills and see what you can cut. See how deep you can go.  Cut the cable?  That frees up a hundred or so.  Cut all the frills from the phone, or go prepaid?  Clip coupons?  Make your own cleaning products?  Shop for clothes at consignment stores and Goodwill?  Cloth diaper the baby?  Come on, how much are you willing to do?  Call insurance companies and get better rates on your car/home insurance?  Adjust your tax withholdings at work so you get more in your checks each week, but no refund each year?  How much money can you free up to pay off all your debt? 

Once you get that money freed up the next step would be to start an small emergency fund ($1000 should do it).  Dave Ramsey says that this "keeps Murphy away."  It is the key to becoming debt free.  If you have that in place and something goes wrong, you can pay for it. Car accident?  There is your deductible.  Flat tire?  Paid for, and no charging it on your credit card.  How fast can you save $1000 to change "things" and make it a better 2014? 

I am a huge fan and follower of the Dave Ramsey "Total Money Makeover" plan to become debt free.  We have been debt free for about 5 years now.  I married a man with a good bit of debt, and that had to change.  With his method, after you save that mini emergency fund you look at your list of debt and you pay minimum on all your bills except for the smallest debt, and you will attack that debt with everything you have.  Knock it out!  Then roll the money you were paying on that one to the next smallest debt.  Be focused, be intense and get it paid off!  Then keep that snowball rolling until all the debts are paid, smallest to largest.  The reason is that when you start with the smallest you get quick "wins."  A "high-five" moment that keeps you going.  It's about behavior.  It's about changing YOU! 

So start with the mini emergency fund as the beginning of changing "you."  And working on the snowball will start to change "things."  If you can be a little uncomfortable now, you will be a lot more comfortable later.  To me, not worrying about how we will pay the bills, or where will the money come from to buy food or clothes is a lot more uncomfortable than living for "stuff" that you really don't "need".  Sometimes it just boils down to wants and needs and it is up to you to decide what is more important. 

Summing this all up, things don't need to change -- the changing has to be you.