I am a student of Financial Peace University by Dave Ramsey. Which means I do not care about my credit score, I believe debt is a trap, not a tool, and I plan to live the rest of my life by cash.
With that being said here’s how I manage my money like an adult.
1. Create a hand-written budget every single month.
Every month my life changes just a little bit and therefore every month I plan for those little changes. A budget tells my money where to go. So every single month before the month begins I do a handwritten budget.
2. Pay your tithes.
There are several spiritual laws in this great glorious universe. The spiritual law that is connected to your finances is the Law of Tithing. The spiritual Law of Tithing is just like the physical Law of Gravity. You don’t have to understand it in order to benefit from it. With the exception of this year (because I haven’t earned a single dollar) I paid tithes every single month. The tithe is 10% of everything I earn for the month. My encouragement to you is to pay your tithe.
3. Save your money.
Another way to look at this is to pay yourself first. At this time I have zero dollars saved. I’m smack in the middle of a rest season and not earning money. However, when I earn an income before I pay people, bills, or debts I will pay myself first by saving a $1000 emergency fund.
4. Pay people, bills, debts, then wants.
If you’re looking for an order of how to get out of a financial hole this is it: people first, bills second, debts third, wants last.
Owning people creates an emotional debt that makes it next to impossible to climb out of the hole. Next pay your bills. I know you want to pay your debts to save your credit score but this is wrong. Your credit score doesn’t make it easier to get out of debt. Paying your bills on time helps you get out of debt. Your bills are your current costs and your debts are your past costs. Once your bills are paid you can pay off your debts. Lastly, pay for new things that you want.
5. Pay your bills on time.
It’s not hard. Put your bills on automatic debit. What you have left is all the money you have to spend. Either spend less or make more money. Those are your only options. I promise when you start paying your bills on time stress just melts away.
6. Send a thank you note.
If you know your payment is going to a human being take a moment to send them a note and say thank you. Courtesy, kindness, and handwritten notes are a lost art and your apartment manager, web designer, photographer, or personal banker are people, send them a note. When life happens and it will the relationships you’ve built with the human beings on the other side of your bills can help you in the time of need.