MoneyCentral has an article on a lady named Tricia. Here's her situation:
Tricia has 3 kids, 2 mortgages, 1 car payment … and a salary of about $31,000. While it's not easy, she's doing OK, thanks.
I love stories like this because they show that while it's not easy, people can make ends meet on a lot less than they think they can. However, most Americans aren't disciplined enough to do this. So I like to hear about the people who are disciplined enough to succeed.
Tricia was deep into debt when things started to turn around:
Tricia credits a close friend she made during that desperate time with helping her change her financial philosophy. "This woman has a lot more money than I do," she says, "and at first I was jealous and resentful." Then she began to realize that the reason her friend had more money wasn't because she was born rich but because she saved constantly and only spent her money on what was truly essential. Slowly, over the last three years, Tricia began a new financial life. It hasn't been easy, but realizing she wanted more out of life than the treadmill of debt and struggle has kept her moving forward.
The story gives 15 lessons Tricia says she learned the hard way. Here are a few of my favorites:
- Think different. "A big thing that's changed over the last two years is the way I think of shopping and purchases. I used to be more impulsive. I've learned to ask myself: 'Why do you need to buy that? Why does my kid need that?' Give me a reason to spend the money. I've really learned the difference between necessities and luxuries."
- Live a balanced life. "I balance my checkbook daily. Some people might think that was crazy, but it forces me to see the numbers every day. If you make so many purchases during the week, it's too easy to say, 'I can't believe I spent all that money!'"
- Pay off debt weekly. Tricia has about $4,000 in credit-card debt on two cards. In addition to making the monthly minimum payment, she sends an additional payment each week. "Another good strategy is to add whatever interest you were charged that month to your minimums. Every little bit helps."
- Bank that tax refund. As she has for the last few years, Tricia is taking her $3,600 refund and putting it in the bank. "I know I could pay off my credit cards faster if I used that, but this is what covers all the unexpected expenses during the year."
- Never pay full price. "Clearance is my favorite word," Tricia jokes. Her other trick for finding high-quality items at low prices: consignment shops. Now her daughter is a fan, too.
- Give up your fantasies. "One thing that contributed to my 'turning point' was reading a book, 'Women Who Think Too Much.' Something stuck with me. Many women are just waiting to be rescued. I wanted to be taken care of, but I'm the only one who can do that."
- Wait before you shop. When Tricia knows she needs shampoo or groceries, she resists the urge to go shopping. "I have only (so) much budgeted for groceries. So when we get close to that amount, rather than go to the store, I say: 'What's in the freezer?'" Although she paid for her son's gas while he was in technical school, she gave him the same strict instructions: "You can spend X per week on gas. When that runs out, you don't drive."
- Bargain for everything. To help out her two oldest children, Tricia struck a deal with the cell-phone company: three phones for $100 a month. Now she's trying to see if she can get a three-way discount on student loans: two for her college-age kids and one for her while she completes a BA.
- Keep learning. "Educate yourself," Tricia says. "Read anything you can that might help you stick to a plan." A favorite quote she read recently: "Squirrels end up with millions because they put the nuts away, not because they make lots of nuts."
You can read the rest of the story at MoneyCentral.
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