I Cleared $35K Worth Of Debt While Making $12 An Hour
In 2009, I lost everything. My career, relationship and home. It's amazing how quickly unemployment can knock you down and change the entire trajectory of your life. I went from earning and saving good money to waking up on my 30th birthday living on my sister's couch.
My credit card debt ballooned to $35,000 and my 802 credit score plummeted into the 500's because I couldn't pay bills. Fast forward five years later and I've not only dug myself out of that hole, but I built a business on the way up. I'm currently a speaker, bestselling author, and financial educator running an internationally recognized brand, but before building a successful business I hit rock bottom.
Here are some money lessons I learned from the struggle:
Always Save for a Rainy Day El Niño
There's no way to predict long-term unemployment, but you should always prepare for it with an emergency fund. I lived well below my means to save money before losing my job. Thankfully, I had some savings to live on.
My first "real" job at 21 was as a teacher's assistant. It only paid $12 per hour, so I lived with my parents to stack coins. I found a modest yet affordable rental in New Jersey with a roommate (my sister), that cost just $1100/month, $550 per person including utilities. As my income steadily increased, I kept the same standard of living and a strict bi-weekly budget. I used envelopes filled with cash to divide my pay into categories: bills, savings, entertainment and grooming.
I lived off one paycheck and saved the other.
By 25, I had $40,000 saved in cash.
Live Richer Lesson #1:
Nothing in life is guaranteed, so establishing good saving habits no matter how much you make is invaluable. Downgrade your life, if necessary. This could mean cutting cable, getting a roommate or keeping your gel manicure on for a few extra weeks.
How To Live This Lesson Now:
Begin to set aside a few dollars from each paycheck in a savings account. Don't have the discipline? Start with Digit. This free resource studies your financial moves and automatically transfers money from your bank account to your Digit Account. They will send you daily, fun texts with updates of your balances and transfers. You can choose to save more, pause savings or withdrawal your money via text as well. Your money is FDIC insured and they have a no-overdraft guarantee. Oh, and they do it for free!
Nothing Good Comes Easy
Before joblessness, my savings game was on point, but my investment game was lacking. I made one crucial mistake that put me in a world of debt and made unemployment overwhelming. At 27, I asked a wealthy friend of mine to teach me how to invest and he pitched me a genius plan. We would buy high-end clothing in New York and ship it to Paris to sell in one of his stores.
My return was supposed to be $1,200 per week for two years. Yup, you read that right. I thought I was going to make $62,400 per year shipping clothes across the pond. I was so excited about making racks on racks that I applied for new credit cards and took out cash advances totaling $20,000.
We sent our first shipment to Paris then I never heard from him or received any money. It devastated me at the time, but I can appreciate the lesson. First, be careful who you trust. Second, if a plan sounds too good to be true, believe it. Last, hard work and passion are what will pay off tenfold, not a get rich quick scheme.
Live Richer Lesson #2:
There's no such thing as easy money. When my "friend" aka The Thief shared his get-rich-quick scheme with me, I should have ran for the hills. Looking back on it, it didn't make sense. Rarely in life do you make a ton of money without knowledge and work.
How To Live This Lesson Now:
If you're interested in investing, you first have to invest in knowledge. Two financial books to help you get started are: The Richest Man in Babylon by George Clason, Stock Market Investing Mini Lessons For Beginners: A starter guide for beginner investors by Mabel Nunez.
Odd Jobs Add Up
Losing my job and the implications of bad investing had me down and out. At 30, I was directionless and living off the little savings I had left. I didn't know how to start over after losing so much. Back when I was a teacher, staff members took notice of my money management skills and looked to me as a financial resource.
Looking for something to keep me busy, I began volunteering at several nonprofits teaching financial education. I networked like my life depended on it and asked nonprofits to refer me to other organizations for paid opportunities. Since I couldn't find 9 to 5 work, I did a bunch of side hustles to make money. I took on one-on-one financial consultations, babysitting and tutoring.
Sidebar: Don't discount volunteering. I met my first clients for The Budgetnista by volunteering. By combining volunteering and sharing me in action on social media, I was able secure a new client each time I spoke and posted myself speaking online. In the beginning, 80% of my business came from the posts I shared on Facebook. So use your social media network to showcase your skills and increase your income.
Live Richer Lesson #3:
If there's no place for you in the workforce, make your own way. Use your experience and passions to offer a product or service that someone finds valuable. Hustle even if you have a full-time job. Multiple streams of income will lead to financial security.
How To Live This Lesson Now:
- Use Your Degree. If you have the education, put it to use. You can charge more money for a service when you're an expert in a field. Think about how you can shape your education into an extra source of income.
- Do What You Do For a Living. You can hit the ground running with your side hustle if you have work experience in the industry. There's no learning curve and you have a resume that proves you know what you're doing.
- Activate Your Passion. Start charging for things you already do for free. You already have an established clientele who like your work and you can use them to spread the word.
- Negotiate a Raise. Start to collect all of the amazing value you bring to your job. Put it together in a file. Make sure you monetize your value. Example: The decision you made to do _________ is saving the company $10,000/year.
Take Ownership of Your Situation
At first, I didn't want to face my credit card debt from the bad investment even when I started making money again. I felt paying any more than the minimum payment was admission of guilt and I didn't want to take full responsibility.
Only after owning the mistake and forgiving myself was I able to start crushing the debt. I transferred my credit card debt to cards that offered introductory 0% interest rates, so the money I paid largely went to principal instead of interest. (Use Magnify Money to help you find the best balance transfer cards.) If I had continued to sit back without taking ownership, interest would have increased my debt exponentially.
Since I've been through the struggle, I understand how disheartening financial missteps can be. You feel destitute, desperate and hopeless, but there is a way out if you face the situation. Open the bills, pick up the phone for collectors and form a plan. Sure, it won't happen overnight, but you have the power to change your situation.
Live Richer Lesson #4:
Have you made financial mistakes in the past? Are you currently making financial mistakes? Will you probably make financial mistakes in the future? Yes?! Well, so did Will Smith, Rihanna, Suze Orman, and me!
Sometimes you are unable to move forward financially, not because you don't make enough money, not because you don't have the resources, and not because your situation is un-repairable. The truth is, you have yet to get over your financial mistakes if you want to move onto greener pastures (pun intended). Financial forgiveness is one of the first keys to becoming financially healthy.
How To Live This Lesson Now:
- Admit to Yourself and Take Ownership. Confess; say "I messed up when I __________". Feel free to substitute the word "messed" with your verb of choice.
- Identify the What and Why (Be Very Specific). Take a break from beating yourself up for a minute and clearly identify your mistake and why you made it.
- Tell Someone You Trust. OK, so this may be a tough for you, but tell a trusted confidant. Doing so will allow you to let go of the shame, begin to forgive yourself, and ultimately work on a solution.
- Focus on a Solution. So the truth is out, and it's time that you focus on what IS, verses on what ISN'T.
- Plan, Then Work the Plan. Once you've drafted your list of possible solutions, pick one and begin crafting a plan. Not sure how to start or what to do?
Using these four lessons, I now run a successful business, and no longer struggle financially.
Tiffany Aliche, better known as "The Budgetnista", is America's favorite financial educator and she's here to answer your money questions.
Featured image by Getty Images
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I Paid Off My $15,000 Credit Card Debt - Here's How
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ItGirl 100 Honors Black Women Who Create Culture & Put On For Their Cities
As they say, create the change you want to see in this world, besties. That’s why xoNecole linked up with Hyundai for the inaugural ItGirl 100 List, a celebration of 100 Genzennial women who aren’t afraid to pull up their own seats to the table. Across regions and industries, these women embody the essence of discovering self-value through purpose, honey! They're fierce, they’re ultra-creative, and we know they make their cities proud.
VIEW THE FULL ITGIRL 100 LIST HERE.
Don’t forget to also check out the ItGirl Directory, featuring 50 Black-woman-owned marketing and branding agencies, photographers and videographers, publicists, and more.
THE ITGIRL MEMO
I. An ItGirl puts on for her city and masters her self-worth through purpose.
II. An ItGirl celebrates all the things that make her unique.
III. An ItGirl empowers others to become the best versions of themselves.
IV. An ItGirl leads by example, inspiring others through her actions and integrity.
V. An ItGirl paves the way for authenticity and diversity in all aspects of life.
VI. An ItGirl uses the power of her voice to advocate for positive change in the world.
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You'd Be Amazed How Much This One Thing Can Keep You Out Of Divorce Court
I truly can’t believe that it was almost five freakin’ years ago that I penned “Why I'll Never Call Someone A 'Boyfriend' Again” for this platform. Now that I’m in the thick of writing my third book (due out later this year) and I’m revisiting this declaration, I am standing firm on it more than ever. There are no boyfriends in the Bible. Your taxes couldn’t care less if you have a boyfriend (some of y’all will catch that later). And acting like you’re married while having a boyfriend when you’re actually not? That is so hella counterproductive — on a myriad of different levels.
Yeah, the longer I live, the more folks I counsel, and the more that I observe humanity; in general, I honestly believe that this culture and how it dates, it teaches people how to divorce, not marry. “Fall in love,” place marriage rules in the dynamic, break up…rinse, and repeat. Then, by the time you actually do say marital vows to someone (which are serious, y’all), you don’t even really mean them or get the weight of them because you’re processing them as barely a step up from whatever you and your last three boyfriends promised to each other.
It's so countercultural to talk about relationships from this angle — and that is why I am hypervigilant about doing all that I can to keep married folks from calling it quits. Because what the Bible does say is covenant-keeping is very serious (Malachi 2:16, Matthew 19:1-12, I Corinthians 7:10-11, Ephesians 5:22-33), the reality is that divorces can be costly on every level, and, reportedly, about half of people who do divorce, on some level, end up regretting it (check out “What Some People Regret About Their Divorce”). So, if we can keep the ending of marriages to a minimum (or at least try), shouldn’t we?
With all of this said, in walks something that I personally found to be pretty interesting. Apparently, after a whopping 40,000 couples were researched, with 94 percent accuracy, there is one thing that could predict if they would divorce. Or not. Are you ready to read what it is?
Did You Know There Is Such a Thing As “The Four Horsemen” in a Marriage?
GiphyIt never fails. Whenever I’m having a conversation with a couple who is seriously contemplating marriage, one thing that they will ask me is if there’s a way to ensure that they won’t get a divorce. I mean, if two people decide to not divorce, they won’t. That’s another message for another time, though. For now, what I will say is when I read about what The Gottman Institute considers to be “The Four Horsemen” of poor communication styles in a marriage, I totally got where they were coming from.
And what are they? According to the institute, it’s criticism, contempt, defensiveness, and stonewalling. Although the reality is that pretty much all humans struggle with these on some level, let me briefly explain what it means to be excessive with them.
- An overly critical person gives unsolicited advice that the person on the receiving end either doesn’t want or doesn’t find to be helpful at all. Still, the critical person gives it because they always seem to think that they know best — including when it comes to timing.
- A person who speaks with some level of contempt usually hits below the belt or is super disrespectful in their delivery. They don’t mind being very sarcastic, dismissive, mocking others, or calling them names (bookmark this one).
- A person who is hella defensive usually struggles with not taking what they dish out, they can’t receive advice unless it’s connected to praise, and they absolutely suck at personal accountability, which is why they deflect, make excuses, and justify their actions a lot.
- Stonewallers are individuals who hold grudges, are passive-aggressive, and refuse to communicate. Of the four, this one is typically seen as the most immature course of action.
And when you take all of these in and then factor in that poor communication (because if you argue a lot, your communication skills need work) continues to be one of the leading causes of divorce (although I do find it interesting that, as far as sources of conflict go, career choices then parenting styles and then the divvying up of household chores lead the pack), whether you want to get married, are newly married or have been married for a while now, keeping those four horsemen in mind, along with being real with yourself about where you succumb to communicating that way, all of this is definitely worth taking special note of.
Okay, but those are four things and the title of this article says that ONE thing, in particular, can help you to avoid divorce most of all. What is it? Well, as far as which one of the four is the most damning, many experts say that it’s contempt. I get why. I mean, who wants to be intimate with someone, on any level, if they are mean as hell? After all, no one signs up to be another person’s emotional punching bag. Marriage is supposed to be an emotional safe space; not a battlefield.
However, according to the married couple John Gottman, Ph.D. and Julie Gottman, Ph.D., the greatest predictor of divorce is something else (although the four horsemen are definitely a huge part of what can prevent what I’m about to say next from transpiring).
The One Thing That Just Might “Divorce-Proof” Your Marriage
GiphySo what could actually keep you out of divorce court if you take and then apply it seriously? The Gottmans call it “turning towards” your partner. And just what does that mean? In a nutshell, it’s being intentional about making sure that your partner feels both seen and heard.
Honestly, one of the best ways that you can do that is through your body language (check out “15 Relational Body Language Cues You Definitely Shouldn't Ignore”) because it’s already pretty rude for your partner to try and express how they feel and you turn your back towards them or even switch your energy away from them. No one wants to be dismissed like that. However, turning towards your partner means more than just that.
Turning towards your partner is all about fully engaging them. I’ll give you some examples:
When you’re turning towards your partner, you are applying compassion. For instance, if they had a hard day at work and they express to you what’s going on, you’re not so quick to give advice or criticize; instead, you acknowledge what they said and respond with things like, “I can see how that would make you feel. Anything I can do?”
When you’re turning towards your partner, you are open to what they are saying, even about you, that you might not like. For example, if they bring something up that you do that bothers them or hurts their feelings, you don’t get defensive or pull that “You do it too” mess; instead, you take the approach of, “Will you explain to me how that affects you to the point where you are upset by it?” and then you LISTEN FULLY (meaning without interruption) to their response.
When you’re turning towards your partner, you take the stance that Dr. Phil has become well-known for saying: “Do I want to be happy or do I want to be right?” You get that because your marriage isn’t just about you, you are willing to compromise, be flexible, and do what’s ultimately best for the relationship instead of only focusing on things going your way.
These are merely three examples of what it means to “turn towards” your partner, and according to the Gottmans, whenever you do that, you have an 86 percent chance of staying together instead of a 33 percent chance if you don’t.
And just how can you become a master at turning towards your partner if this is a concept that is completely new to you? Good question. When two people make the decision to share their lives, this means that they are choosing to meet each other’s needs. The only way that you can know what those are is by asking — not assuming, not presuming…asking. And then, once you know, discuss with your partner if you are meeting their needs in a way where they feel like their needs are actually being met.
And what does that mean? Listen, I can’t tell you how many times I have been in a session with a spouse who has told me that they are a good husband or wife, and then, when I ask their partner if they agree, all hell breaks loose. Yeah, you can’t be in a relationship with someone and have the only vote on whether you are good for them or not; they definitely get a say. And if you’re serious about “turning towards” your spouse, you’ll want to hear what they have to say about if you are both good to and for them — in both the big and smaller things.
____
At the end of the day, if you want to avoid divorcing at all costs (and here’s hoping that you do), turning towards your partner is about expressing empathy. It’s about facing them, figuratively and literally, so that you can better understand them, support them, and share in their needs with them. Because when you sign up for marriage, that’s a huge part of what it means to be a married person.
Marriage: Riding through life together. Avoiding the four horsemen at all costs. Turning towards each other. Daily.
Amen.
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