Dear girls,
A lot of what I've written has to do with the philosophical side of things. Not completely practical, but more of a 'keep these things in mind as you're making decisions' type of advice.
For the practical side of things, we needed a road map, a place to start.
Our original debt payoff was actually my debt payoff. Before dad and I were married, I decided that it was only fair to enter the marriage without any credit card debt. So I added up my debt, and had a mild heart attack. I had about $15k in credit card debt, and not a lot to show for it. I had no idea what I spent money on.
So I sat down and wrote everything out. What the mortgage was, what the utilities were, insurance, etc. All the fixed costs, so to speak. But I had no idea on the discretionary stuff. I didn't think I spent much on clothes, or food, or going out, but I had no clue. So I started tracking. Because you can't know where you're going without knowing where you've been.
I honestly don't remember what I did, but there are really 2 methods of tracking your expenses. One is to download your credit card statements for the last 2-3 months and categorize everything. The other is to start tracking everything you spend going forward. I think both are valuable and would do both, if I didn't already keep track.
By looking behind, you see where your priorities were, if you had them, and what you spent the most money on when you weren't really paying attention to it. By tracking going forward, you become very aware of what you're spending money on. You'll end up having conversations with yourself while you're holding things 'Do I really need this?'.
Once you have this data, you'll build a budget. I love budgets. Then we'll talk about Dave Ramsey and why he's so great for getting your financial house in order.
My hope is to provide you a blueprint to manage your financial life. Even if you don't have debt, tracking your spending is essential for getting things in order. And don't worry, we budget for fun too.
Love,
Mama
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