The Financial Equivalent of Treading Water

Several years ago I found myself in a rather sticky financial situation.  I had no savings, a small mountain of debt, and plenty of bad financial habits.

I buckled down for a couple years, paid off my consumer debt (except the mortgage), and thought things were looking up.

Fast forward a few years.  Unfortunately, that gazelle intensity I had to pay off debts did not translate to the same intensity for building savings.  I floundered.

I’ve spent just about everything I’ve earned over the last few years, and some months then some.  The good news is I’ve kept my debt under control and managed to pay off everything I accumulated in bad months.

The bad news is I feel like I’ve been running on a treadmill as someone continues to turn the speed up.  Or, perhaps more appropriate, I feel like I have just been treading water, financially.

When I take a break, I sink under the surface, and when my lungs burn I struggle up for air.

How to Get Back on Track With Your Finances After a Break

I decided enough was enough.  I didn’t work all those years to get debt free just so I could tread water and enjoy mediocrity.  It is about time to get my butt in gear again.  Here’s my plan of attack.

  1. Take a financial inventory.  Sometimes it is hard to face a cold reality, but this is a necessary step.  Similar to taking a picture before starting a diet, you need to know how your financial picture looks so you can monitor progress.  
  2. Write down your money goals.  One of the reasons I lacked motivation was I had no definitive goals.  When I was in debt my goal was to get out of debt.  That one was easy.  But once I got out of debt, I just sort of drifted.  Now, I’m declaring my spending and savings goals going forward.
  3. Reward yourself for the small victories.  Life is meant to be enjoyed.  Because I seem to go from one extreme to the other – spendthrift to tightwad – I often find myself living an overly miserly existence.  There’s a reason the words miserly and miserable look the same.  Save for a couple special purchases, pay cash, and suppress any feelings of guilt that may try to creep in.
  4. Conduct a monthly check-up.  Once a month, sit down on a Saturday morning with a cup of coffee and plot your progress in your favorite financial planning software.  Balance your checkbook.  Maybe that’s Mint.com.  Maybe it’s Excel.  Maybe it is even a simple legal pad or household ledger (my personal favorite).

Watch your expenses.  Find ways to boost your income.  Be content.  Above all else, don’t go back into debt.  Never again!

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