Simple Financial Stability: How to Identify What is Draining your Money (aka. Gold Diggers)

LANGUAGE: ENGLISH/ESPAÑOL

The Simple Woman is back, and I hope you all had a Merry Christmas and Happy New Year. First of all, I want to make a few announcements:

  1. Welcome 2021! Bye Bye 2020. Thanks for all the lessons learned, but so glad you are now gone forever!
  2. The Simple Woman: Just Try It Blog has gone through some improvements, and now we will be publishing MULTILINGUAL posts! Just choose between English or Spanish, and Voila! Enjoy your reading.
  3. For this year, we will be introducing our new structure: Monthly Series. Wait WHAT? Each month will be a series of weekly posts related to a specific subject. Want to know more about this? Keep reading because we are just about to kick off 2021 with our January Series: Simple Financial Stability.
  4. Need to contact us? Email us at contact@simplewomanjusttryit.com.
  5. Finally, follow Simple Woman: Just Try It on Pinterest!

Simple Financial Stability: How to Identify What is Draining your Money (aka. Gold Diggers)

In my last post of 2020, I talked about the most common New Year’s resolutions, which I transformed into long term goals and then incorporated them as part of our family lifestyle. One of those long term goals is budgeting, a very broad subject and constantly changing learning curve. However, for THIS Simple Woman, budgeting is essential for having a simpler life. The whole thing is very simple. You need to know your money so you can play the game. For this January monthly series, I will be sharing our journey toward financial stability, starting with budgeting.

We all need money to provide the basics to our families and ourselves. Sometimes, we get sidetracked unconsciously and end up with debts, no saving, no retirement plan, no money for vacationing or having fun, and no nothing. Believe me! It took me years and a few wrinkles to realize something was wrong. The constant question in my head was, How is it possible that my monthly expenses are higher than my monthly income? Now comes the aha moment! For my family and I, the answer to that question was to have a budget, but to get there first we had to identify what was draining our money. Here are the steps we followed:

Step One: Numbers Don’t Lie – Since my husband and I got married, we have a primary credit card, which we used for a family type of monthly expenses (food, entertainment, vacations, some utilities, etc.). At the end of the month, we would pay it fully. So, here it comes…Feel free to freak out! I did countless times. The monthly bill for this card was between $3000-4500. Additional to those expenses, we had daycare, car payments, two mortgages, college plans, student loans, other credit card payments, clothing, etc. Here some approximated numbers:

  • Car payment = $650
  • Mortgages total = $3700
  • Student loans = $350
  • Day Care = $1400

Step Two: This May Work (or Not…) – To track our money, we decided to install TrueBill and Mint apps on our phones. These were meant to be like a digital financial assistant to track credit cards and bank accounts. We even set alerts to letting us know we went over a certain amount on our primary credit card. Long story short, it didn’t work, and monthly expenses were still the same. Clearly, we were not effective at all.

Step Three: Deep Dive into the Numbers – At this point, I decided we needed to get deeper into the number to better understand and identify what was going on. Our strategy was to:

  • Get ALL bank account monthly statements.
  • Get ALL credit card monthly statements.
  • Color code the following expenses categories in those statements:
    • Recurrent expenses
    • Food
    • Entertainment

Step Four: Know Your Money – Yes Yes Yes!! Now we are talking! After going through the color-coding exercise (I’m a visual person and need colors in my life), it was obvious what was draining our money. Now that we knew our money, it was time to take action.

The journey does not end here. For next week’s post, I will be sharing how we got our budgeting bubbles and how was our experience with financial advisory. See you next week!

To clarify, this post is about what worked for my family and me and nothing else. I’m not a financial advisor, but if you want to know more about my professional career, check out My simple answer to “How did you choose your college degree?”. For financial guidance, I follow Partyof4FIRE blog and Our Rich Journey YouTube Channel.

Oh, and if you made it this far….it was food that was draining our money. More to come! 🙂

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