Don’t just Survive…Thrive!

You’ve made your budget and been living within it for a while now.  You have a rainy-day fund set and are ready to for the next steps to improving your life. Don’t Just Survive…Thrive!

Get Out of Debt

Step 1 for Don’t Just Survive…Thrive is to Get Out of Debt!  Debt is any loan.  Some loans are more reasonable, such as mortgages or student loans.  It’s highly unlikely we will be able to completely pay these off in just a few years. However, we can pay above the minimum balance to lessen the amount of interest paid overall.  One tip for these bigger loans is to take the minimum payment, divide by 12, and add that number to your monthly payment. But if you can do more, then do more.

Other loans though are not so reasonable…such as auto loans or credit card debt.  These types of debt have high interest rates which means you are overpaying for every item purchased on that card unless you pay the entire card off every month. You want to avoid paying interest, so pay down as much as possible, as quickly as possible. Cancel or close your credit cards too, if you can.

How do you find extra money?

If you have followed the tips in Make Your Budget, then you have been setting aside money for your rainy-day fund.  Once that is set, you can put this extra money immediately towards the highest interest debt.

Also, any money not spent that was budgeted towards another activity could be redirected to debt as well. For instance, our school doesn’t have an extended day payment the last month of school or during summer. So that amount can be redirected to a loan.   Or perhaps you had some cushion money set aside for clothing, then you could make the hard choice of using it for loan repayment as well.

Another option is, if you have a side hustle, commit to directing any additional funds from this to you loan repayment. Again, not an easy choice but the faster you stop paying interest, the better!

Ready for Ideal

With debt at a reasonable to nonexistent level, it’s time to start thinking more about getting comfortable.  You have cleared monthly budgeted funds from the rainy-day fund, and you have paid off the car and are no longer using the credit card and paying high interest rates.

First…CONGRATS! This was really hard. You are strong and wise, and you made great choices that got you to this point. Second, keep your great momentum going by choosing a new purpose for these funds. And by purpose, I mean savings.

Perhaps you wanted that iPhone Max Pro. Or perhaps you realized birthday gifts for all your kids’ friends are expensive. Perhaps a beach vacation is calling your name. Or Santa didn’t bring as much for the kids as you really wanted to provide. As Successful Solo Moms, we are making choices all year long on what is in and out of budget. I hate this. It can feel so unfair.

However, with commitment not to go into debt over a Barbie house or the latest tech craze, we should be proud of ourselves, AND know it doesn’t mean the answer is No. It means the answer is Wait and Save for the important things.  This is Step 2 for Don’t Just Survive…Thrive!

Start redirecting any cleared-up funds to savings accounts with specific purposes.  Honestly, I have 9 savings accounts, each with a name of its purpose: Vacation, Projects, Tithe, Gifts & Holidays, Annual Expenses, etc.

When a birthday pops up, I buy the gift out of my primary account but then pay myself back from the savings account during my monthly budgeting time.  I can see how much hotel and activities I can afford before booking because the money is in savings first.  Then I can either move the savings money to my primary first or pay myself back right away. This way, my auto-paid bills are never in jeopardy.

Think Outside the Box

Now that you are on this mission to Thrive, start thinking Outside the Box for cost cutting and increasing income.

Ideas for savings:

• Bundle expenses, such as phone and internet or home and auto insurance
• Annually, compare insurance providers to ensure you are getting the best rates
• Turn off subscriptions and services that are not essential
• Use rewards for essentials, such as auto-gas rewards cards
• Clip coupons, but don’t overbuy
• Requests practical birthday gifts (like grocery store gift cards or gas cards)

As you sit down each month to review your monthly budget to see how you did, make adjustments to your behavior to hit your goals.

Another option, if you have additional time, is to look for ways to increase your income. There are many ways to increase your income including asking for a pay raise from your employer or looking for extra work. Regardless of the option you choose, increasing your income may be the best way to ease pressure on your budget. To get ideas for extra money, check out Ramsey Solutions 34 Ways to Make Extra Money.