The one part of adulting that really has eluded me for most of my life.
Up to this point, I have been your typical American living paycheck to paycheck and carrying a bunch of debt.
This stresses me out and makes me worry about money all the time. I don’t remember a time in the last 20 years where I wasn’t worried about money in some shape or form. Where is it coming from? Where is it going? How do I get more? So many questions that I kept trying to answer and I never could quite get the answer I was looking for.
I have tried all the different types of money management. I have hired people to look after my retirement money. I have made budgets that I never can quite stick to. I have saved money and then spent it all. I have dug myself out of debt twice, and I am working on a third time. I seem to be always trying but never really learning how to make it all work.
I made a decision earlier this year to really focus on getting out of debt and managing my money better. And here’s the funny part, since I made that decision, I am no longer worried about money.
I have been spending time with a life coach, and we have been focusing on the underlying root cause of why I am always worried about money. Through these discussions, we went all the way back to when I was a child, and I always felt like there was a lack of money in my life. I did not live in a poor family. I lived with frugal parents. And I often heard as a child that I couldn’t do things or buy things because “we couldn’t afford it.” It took me years to realize this was a perception I had and not the actual reality. My parents are very frugal people. And because both of them had grown up in circumstances with less money than most, they often would look at my frivolous requests and rather than tell me no, they would just say that we couldn’t afford it.
However, this shaped how I looked at money as I grew into an adult. Not only did I want the things that I couldn’t have as a kid, spending money on credit to get those things, but I also still lived with the underlying “I can’t afford it” mentality. I never believed there was enough money, I always wanted more. I lived the first 20 years of my adult life just chasing money. I always wanted the better job title because it came with more money. I got college degrees because people told me that they could earn me more money. I was miserable, and I might have been earning more money, but I was also spending more to create the lifestyle that I somehow believed I was supposed to have for this “level” I was at in my life.
Fast forward to now. I am tired of chasing after more money. I am tired of worrying about money and bills and living. I make the least amount of money now than I have in the last 15 years. But I have a job I love, and I live in the state that I love. I am happier now than I have ever been because I am living the life I want to live. Of course, I still need money to live, but after I made that decision to get good on my finances, I discovered a concept that I had never really looked at before.
This is the concept of looking at all of your money. Retirement accounts, bank accounts, assets, and debt. Take your total assets and subtract your total debts and you are left with your net worth.
I have a pretty good net worth. That was all it took to shift my mindset from thinking I didn’t have any money to realizing that I had enough money for everything. Yes, most of it is tied up in retirement accounts, but the reality is that I have money I could get if I want. So, I have enough. I don’t need to worry anymore.
I also realized that I needed to make plans to increase that net worth and get out of debt. I want to buy a home someday, and I want to be smart about how I spend that money. So, I need to work to increase my net worth and get back on track with my spending and earning.
I am paying off my last credit card in October.
I have a beautiful debt reduction chart that I am using to help me visualize my debt payoff.
I am working on a budget that also helps me visualize my spending.
I am working to get better.
Next week, I hope to have all of my tools completed, and I will show them to you here. I will make them available as free downloads. If you are like me, I hope they help you. More to come!