Guest Post from The Debt Princess

I asked Jessica over at The Debt Princess if she would write a guest post for me based on how to budget while in your 30’s.  I could really relate to Jessica’s story as myself accumulated way too much debt in my life.  I have lost a house after going through a divorce, and well, I’m still paying off college student loans in the process of losing 50% of my income because I was so miserable in my former job.

My true goal is to get myself completely out of debt and live comfortably.  Here is Jessica’s story with tips on how to look at your own financial self:

I have been an adult now for about 18 years but I didn’t grow up until I was well past my 35^th birthday.

For me, being an adult meant having things. Stuff. I spent a lot of time accumulating my stuff and I was proud of it. I also spent that time accumulating debt, a lot of debt.

In March of 2010, at the age of 35 I found myself a single mom of 2 young boys, living back with my mom, unemployed, in debt and selling my car for scrap after the transmission went out. I had no clue what I was going to do with my life or how I was going to provide for my children.

It took starting my blog, The Debt Princess for me to really grow-up. As I shared my story about being in debt, I learned a few things about myself.

1. I didn’t know the first thing about personal finance, not even a little bit!
2. I was not alone. There were people everywhere in the same position as I was.
3. Things needed to change.

I wanted to share with others “what NOT to do” with their money and to do that, I felt like I needed to know a little bit about what we should be doing.

I have learned so much in the 2 years that I have been working on improving my financial life.

Budgeting

Every. Single. Person. Needs a budget. Everyone needs to know how much money they have coming in and how much money they are spending. It doesn’t matter if you are uber wealthy or middle class, you need to know how much money you have.

When I looked at my budget for the first time, I was shocked and disgusted to see how much I was throwing away at places like McDonald’s (I was addicted to fountain Cokes.), Starbucks and Target. I was paying for subscriptions that I never used to Netflix and the gym. Once I started adding all of that up, I found that I could put that same amount of money to better use.

Saving

The concept of paying myself first was so confusing to me. For some reason it never clicked that I needed to think about my future. Part of thinking about that future is acting today for affect on tomorrow. We all need to be putting money away for a number of reasons.

1. Emergencies. Whether it’s car repairs, medical expenses or a broken dishwasher, emergencies happen. A solid financial plan includes a savings account for those types of emergencies. This alleviates the need to go into debt by charging the expenses.
2. Short Term Savings. When I want something, I need to save for it. I do NOT need to have it immediately. Those items that I use to buy on impulse mean a lot more to me after I’ve saved for them for a few months. This is also where I need to be saving for my next vehicle.
3. Long Term Savings. This is my retirement plan and it is essential for every person. Social security will not be enough to provide a comfortable lifestyle when retirement hits. A diversified plan is essential and the best way to achieve that is through a Roth IRA.

Priorities

The single greatest lesson I have learned in the 3 years since I truly became an adult was that I needed to have my priorities straight. I needed to stop giving into impulses. I could not make trips to the mall just because I was bored. I do not need a new car every few years. In fact, a used older model car that I own outright is a far better car that will take me years to pay off.

As a single mom, I needed to remember that my children are learning from every move I make. And if my priority is to raise well-adjusted, stable adults, I needed to make sure they were learning about the right way to handle finances. I do not want my children to live their adulthood in debt, the way I have.

My priorities are set now, for the most part. I still struggle with the occasional decision but I feel better about where I am now than I did a few years ago. Even if I’m still in a lot of debt, I know that my next 40 (hopefully more) years as an adult will be better than the first 18.

Jessica Streit is a single mom of 2 boys, a graduate student, a freelance writer, a blogger and she is in debt. A lot of debt! She’s writing about how she got into debt and process she is taking to get out of debt on her blog The Debt Princess. 

Jessica, thank you so much for sharing your story and also the tips in how you got there.  We all need to sit down and look at our financial self and figure out where our money is going.  The next step for me is to start saving for me first .