What – the actual – fuck?!
Do any of you even believe this phrase is a regular part of my vocabulary these days? Are you financially literate? Do your bill payments, car payment or mortgages own you? Or have you taken control and showed that ass who is boss? What the fuck does this phrase even mean?
Well Peoples, I had no clue what it meant to be financial literate so I googled the shit out of it. I figure since the actual truth is most of us are pretty goddamn illiterate when it comes to money we should learn a few things about of my journey to kick my student loans to the curb.
See here is the thing – I have had lots of conversations recently about money. People are offering me suggestions, people are telling me what works for them, people have just straight up told me they can’t budget because they don’t make enough money so there is no money to budget, I even had some tell me that their bank or credit card lists all the transaction so there was no need to really look at the spending.
“Financial literacy is having the knowledge, skills and confidence to make responsible financial decisions. Knowledge refers to an understanding of personal and broader financial matters. Skills refer to the ability to apply that financial knowledge in everyday life.”
There are a lot of resources online. The government of Canada has an entire section of there website dedicated to it. I mean there is also banks, financial advisors and I am sure we all know people that are killing it with their finances. I will openly admit that I have been a HUGE spender over the years, mostly on plane tickets and travel. But none the less spending money on things and not paying more than the minimum payment on my bills. I don’t regret it. I just want to focus on different things now.
So lets look at a couple basic things that you really need to be honest with yourself about:
Budgeting: This is a big one for me. I would always get my paydays, pay my bills and spend the rest on crap I don’t need. I make enough money to cover my costs so I just went with it. For a few weeks now I have been writing down everything that goes in and out of my bank accounts and I am excited to see how much more money I can dedicate to paying off my loans. Your bank statements and credit card statements are probably not an accurate enough picture of where you are spending if you are wanting to cut cost and corners where you can. If you want to improve the numbers, you need to get real with the numbers. Even the daily coffee habits, iTunes purchases and everything in between.
Student Loans: Everyone says that this is “good” debt and that you shouldn’t worry about it. Debt is debt. You still need to pay this shit off. Taking a closer look at student loans you can see a low interest rate but for me it is on a large amount. So let say on my Canada Loans alone (not counting Alberta & Nova Scotia) – that loan is accruing interest at $4/day. That is costing me about $1460 extra/year times 10 years – now I am paying an extra $14600 on that loan alone. Guys, I could get a great vacation with that, a round-the-world plane ticket, a nice deposit on my dreamy container-ship home – you get my point. What are the interests rate on you loans? Have you really taken a look? is a 15 year repayment plan really worth it?
Car Loans: The interest on my car loan is even higher than my student loans. I needed a car. I also had to factor in I had zero budget for repairs and I have no one to borrow from if something were to happen to my car. So I bought a used car, that had 5000kms on it when I bought it. And it still had some factory warranty. It is fuel efficient and in my price range. My point, are you driving an affordable vehicle? I have been told that if you can’t buy it out right you shouldn’t be driving it. I get that. Not possible for me.
Credit Cards: These are a holy hell of nasty. I know. I have a balance on my credit card (don’t worry it’s in my budget to pay off) but credit card interest rates are anywhere from 19-33% depending on the card. You really should not be spending on this if you can’t pay it in full at the end of every month. On time. Leave that shit at home. It is not money to be spent. It is a high interest loan that fools you into easy money.
If you want to get serious about paying off some bills, you need to be brutally honest with yourself about your spending habits.
You need to be honest about where you can cut corners and what can work for you. I knew I was bringing in enough to be paying my bills I just really needed to restructure how I was spending. I think it is incredibly important to have realistic goals, a budget that allows for treats, clothes and weekends away. If you don’t budget with a vengeance you will experience debt fatigue and ain’t nobody got time for that.
Have you taken a look at what you are spending your money on? or how much interest you are paying? What is motivating you get get real with your money?