What about that credit card statement that pings your inbox every month? Do you read the nasty APR comments at the bottom? Are you paying upward of 16% on each purchase to let VISA own what you bought? Ick. Retirement statements? Are you contributing up to or beyond what your employer will match? Are you contributing at all? Let's discuss all this clutter.
As Dave Ramsey says, if you run out of month before you run out of money, it's time to put in some work. You may have purchased (on a credit card?!?) some cute file folders and a box at Container Store to keep your receipts tidy and maybe even a notebook to track your medical and tax deductible expenses. A valiant start, but stop spending money if you don't actually have any.
If you have debt, then you are broke. Despite what the zero percent interest car deals will tell you, there is no good debt. I repeat: THERE IS NO GOOD DEBT. Of course, many of us, Cowtown Minimalist included, wagered that our education would pay off dividends and took out student loans to complete it. But it's still a debt. Shackles which bind us to Chase Bank or Joe's Lending or whomever.
Some of you may identify with some lingering student loans, credit card debt, and maybe you took out a "home equity loan" with the starry-eyed goal of paying off aforementioned credit card debt and crawling out of your hole. But guess what? You charged more on the credit cards, and now your home isn't worth as much to you should you try to sell it.
Stop the bleeding. Clear the clutter.
I don't claim to be a finance genius or have made a million in the stock market, but I have reconciled my family's finances to a manageable level and am not servicing any credit card debt. I run the household, pay the bills, and keep a kid in college. It can be done. Let's start here:
1. Stop spending money you don't have. This may hurt really badly, but as theminimalists.com will tell you, if you don't feel the pain, you won't feel a change. No more credit card spending. No more charging vacations or meals out or oil changes.
2. Sit down at your kitchen table and write down what you owe and what you own. It seems logical, but no one wants to face the music. It's shame-producing when you see big numbers. But hey, clutter needs clearing so get a pencil. Start with the smallest debt first. It may be your Macy's card, but work on it. Get rid of that clutter. When you pay it off, close the account. We don't recommend closing every account, but if you have a bunch of store cards because you got sucked in to the "15% off if you open an account right now" ploy, tell the Gap goodbye.
3. Stop spending money you don't have. Did we mention that already?
4. Practice saving. Obviously, this hasn't been a big priority for many of us, but it's time to practice right now. You're busy paying off your debt, so you aren't going to aim really high here, but you are going to auto-transfer $20 a paycheck in to a savings account. Watch it grow every 2 weeks into something respectable. Our goal is to have a rainy day fund of at least two months wages. But get those insanely high interest cards paid off first.
5. While you are paying off debt slowly and deliberately, ponder ways to reduce expenses and generate some additional income. Drive for Uber? Your own hours and make some money! How about sell some of that crap in your house? We have preached about minimizing, so what about now and make some dough while you're at it? And finally, consider downsizing your living arrangements. Is your house more than you can afford? Did you buy it when you had less debt or weren't divorced? You have to crawl out of your comfort zone to be debt free. Whining about being comfortable is what got you here to begin with. Consider a move to reduce your monthly overhead. Even $200 a month will help reduce that debt more quickly.
That's a big enough bite to chew for now, Minimalist friends. We know this financial clutter leaves your sleep disturbed and your nerves frayed. Let's work on these items and we'll address some more clutter shortly.
Don't just organize -- eliminate!
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