Start to Feel in Control

After coming clean last week about my credit card debt, I’ve gotten tons of questions about how I took the first steps in getting out of debt, budgeting, and taking control of my finances. I figured that doing two follow up posts to keep the length digestible would be a good idea to answer most of the questions that have come my way since that post.

Today I’m going to talk about some first steps to start to feel in control of your finances and make some progress on credit card debt, and in the next follow up post I’m going to talk more specifically about budgeting and ways to cut money easily and still live and eat well!

I hope this goes without saying, but I am in NO way a financial advisor or expert (clearly), I’m just talking about my real life experiences and what has worked for me.

1.) Use Mint.com.

If you don’t already use Mint, you should. It’s free, very helpful and easy to use, and just such an awesome system. I know, I know. Setting it up takes some time because you have to put in your account numbers and log in information, which was my attitude for way too long after I learned about it, but just suck it up and do it. Whether you have credit card debt or not, it’s an awesome tool for getting in control of your financial situation.

How it works is like this – you basically input all of your accounts – bank, credit cards, 401ks, student loans, car loans, etc. Every time you log in, it updates your accounts and tells you how much you have/owe, if there are any new alerts on any of your accounts, and what your net worth is. You can set goals – like get out of credit card debt, save for an emergency, save for a vacation, etc. It helps you set up small concrete steps so you can actually make your goals happen (sounds kind of light weight loss, doesn’t it!?)

The “new alerts” portion is especially helpful for me – last week I logged in and saw “You’ve been charged a return payment fee of $25” on my new credit card. I called them immediately – it turned out I had inputted my bank information incorrectly since it was my first time setting up a payment, so they removed the charge and allowed me to do it again. I probably wouldn’t have noticed it otherwise since it was only $25, but $25 is $25!

mint

2.) Set up a budget.

This can be scary. I know for a loooong time, I felt so in over my head with all my payments and bills, that I basically shied away from creating a budget because I didn’t want to know how little I was working with. However, once I plugged in all my numbers, I realized I had way more “extra” money than I thought, and I had no idea where it was going! It was extremely eye opening for me. Even if you think you have nothing to work with – try it! It will only help you become aware of where your money is going and what areas you can potentially cut back in.

You can set up a budget in mint.com, do it in an Excel spreadsheet like I do, or use many other templates/websites out there for this sort of thing. You can decide how detailed or general you want it to be. I basically set up just the bills I have, and then consider everything else (going out, groceries, gas, etc) part of spending, but you can break down those expense if you want. If you drive to work every day, it probably makes sense to make gas a fixed expense, but since I metro and rarely fill up my tank, it makes more sense for me not to break it out. Feel free to email me if you want some help – bethsjourneyblog@gmail.com.

I thought that setting up a budget was going to make me feel SO restricted, but in all honestly it actually is so freeing! Knowing how much money I have to work with and not cringing and hoping I won’t be overdrafting my account every time I use my debit card is a very good feeling.

3.) Set up an emergency fund.

When you set up your budget, you’ll see how much you have to work with for this one. I started with $100/paycheck to get my emergency fund up to $1000, and then stopped contributing to that until I have my credit cards paid off. Even just $25 a paycheck will add up over time and it’s important to have some money set aside so that if something comes up – like a car repair, an accident, a ticket, a medical bill – you have some money set aside so that it doesn’t derail your entire budget and progress.

coin-jar Emergency fund

3.) Call your credit card companies.

Pick up the phone and do this now if you’re working with credit card debt! Stress that you’re trying to get in good standing but the interest rates are keeping you from making a dent in your balances. Ask them directly to reduce your interest rates, and you may have to call several times and talk to different people. It can only help. I was originally at a 24.99% APR on my Bank of America card, then I called and they lowered it to 20.99%. I called them again several months later to ask them to further reduce it, and they wouldn’t, so sometimes you have to be persistent. I would have called them again if I didn’t transfer every last drop to another card because I was so angry at how unhelpful they were.

4.) Open up new lines of credit with lower/zero interest.

Mint.com makes some great recommendations on 0% APR cards that you can open to transfer you balances to to save money. There is usually a one time 3% charge for balance transfers, but its way lower than the amount of interest you’d accumulate over time. This is only usually an option if you have kept up with payments on outstanding debts, which I was lucky to have almost always done. I opened up one new card and transferred nearly all of my debt from the BofA card to it, and I have 0% APR for 12 months. This is great because I’m looking at it as a challenge to be able to pay it off in time, and will just continue to make the minimum payment on it until my other card is paid off in full (hopefully next month!) The best ones I’ve come across are through Chase Freedom (the one I opened) and CitiBank.

debt1_medium

5.) Go on a cash only spending policy or open up a new checking account for spending if you have trouble sticking with your budget.

Hello, I spent my way into $11,000 of credit card debt – I think this category is where I fall. I tried the cash only spending thing, but it honestly didn’t work for me. I’d run out of cash and then just use my debit, really undoing the whole process. While cash only can be good for some, I found that opening a second debit card for spending was the best thing for me. Every Friday, I transfer $150 into it, which is how much I use for groceries, spending, incidentals, going out, etc. I’m being very strict right now because I really want to get out of this debt as fast as possible, but I will probably up it to $200 a week once I’m out to have a little more freedom. Once its gone, its gone until the next Friday, and it actually makes being able to say “No” a lot easier.

Sooooo that’s “it” for today. I think the bottom line for me was that I finally came to a point where I realized hiding from my finances wasn’t making the situation any less real. I thought that looking honestly at my finances and sticking to a budget would make me feel VERY restricted and unable to breathe financially, but the truth is, finding out where my money was going and taking steps to getting out of debt is SUCH a freeing feeling. While I am limited in the amount of spending money I have now, knowing that all my bills are taken care of and that I can use the extra for whatever I want makes me feel much freer than I felt when I was drowning in debt.

Do you use Mint.com? Love it or hate it? What’s the best thing you’ve discovered from using it?

51 Comments on Start to Feel in Control

  1. Mindy
    May 10, 2011 at 8:36 am (6 years ago)

    These are great tips – I used Mint.com before switching to a local credit union who isn’t listed on there. Now I just have an overly detailed spreadsheet.

    Reply
    • Beth
      May 10, 2011 at 9:52 am (6 years ago)

      Yeah I use both my own spread sheet and Mint.com. I love them both in conjunction with each other because it’s nice to have my own calculations and then someone else double checking it for me. =)

      Reply
  2. Victoria (District Chocoholic)
    May 10, 2011 at 8:40 am (6 years ago)

    I don’t use Mint, but I use MyPortfolio from Bank of America, which tracks your net worth over time. It’s really rewarding to see it improve.

    Reply
    • Beth
      May 10, 2011 at 9:53 am (6 years ago)

      I have a major grudge against BofA because of the whole credit card thing, but I think you seem wayyyy more on top of your finances than I am so I’m glad you found what works for you!

      Reply
      • Victoria (District Chocoholic)
        May 10, 2011 at 9:55 am (6 years ago)

        I have a grudge against them for trying to pull financing for my mortgage 22 hours before closing after telling me everything was in order for it.

        Problem is, they’re too freaking convenient. Arg.

        Reply
  3. Holly @ The Runny Egg
    May 10, 2011 at 8:51 am (6 years ago)

    I love mint.com — we only recently started using it and I haven’t had much time to really play around with it. It sure is nice having all of your accounts in one place!

    Reply
    • Beth
      May 10, 2011 at 9:54 am (6 years ago)

      Yes having everything in one spot is awesome. I also have my 401ks there so it says my net worth is positive even though I don’t think of it as so…

      Reply
  4. Amy @ Second City Randomness
    May 10, 2011 at 8:53 am (6 years ago)

    I signed up for mint, then never took the time to officially set it up. They now send me emails, basically saying “wtf?” and wondering where I am… oops

    Reply
    • Beth
      May 10, 2011 at 9:54 am (6 years ago)

      DO IT!!! =)

      Reply
  5. Stacy @ Every Little Thing
    May 10, 2011 at 9:06 am (6 years ago)

    Great advice! I tried using Mint before but a couple of my accounts didn’t end up working with them. I may have been able to fix it but I didn’t go back to try. My bank keeps my major bills in their system and I can pay through them (this also earns me interest on my checking!), so I do that. Like you, I have some credit card debt and will have one card paid off within two months! It’s a long haul once the debt is there but SO worth it once it’s gone.

    I have for so long lived paycheck to paycheck – as a new social worker, I have been paid very little and never had much money left after paying bills and supporting myself. Now, I’m in a more comfortable spot, but still live as thought money is limited. This helps me end up with extra money at the end of the month!

    I also think it’s important to check your bank account transactions almost daily. You really need to know where your money is going and if you’re being charged anything you shouldn’t. I balance my checkbook probably 5 times a week! Just to make sure I know exactly how much I have at all times. Like I said, I’ve lived way too many years having only a few dollars in there at a time, so I HAD to know exactly how much!

    Reply
    • Beth
      May 10, 2011 at 9:55 am (6 years ago)

      I’m still at a point where I’m living paycheck to paycheck too and it’s really annoying. I feel like I’ve been working for too long to live like this anymore! I feel like I can finally see the light at the end of the tunnel though, finally, and its making me excited! =)

      Reply
  6. Stephanie @ The Cookie Battle
    May 10, 2011 at 9:15 am (6 years ago)

    I use mint.com but not to it’s full potential, I just use it occasionally to see where my “total” debt is (trying to pay it down!). I agree the alerts are helpful in terms of getting whacked with extraneous fees that you wouldn’t be aware of otherwise.

    I love these debt posts, keep them coming!!

    Reply
    • Beth
      May 10, 2011 at 9:56 am (6 years ago)

      There will be one more about small ways to save money, probably sometime next week. if you have any specific questions, let me know! =)

      Reply
  7. Suzanne
    May 10, 2011 at 9:38 am (6 years ago)

    Great tips! when my husband and I first started dating, he had about $38K in debt (student loans and what not). We had some VERY lean times while we paid it off and it wasn’t always fun, but it’s amazing how much better we feel, and sleep at night, knowing now that we have no debt.

    Reply
    • Beth
      May 10, 2011 at 9:58 am (6 years ago)

      I can’t WAIT for that feeling! I already feel way better sleeping at night/in general since I have a plan in action than before when I was just pretending the problem didn’t exist, but once I’m out of debt and can start saving and actually have money to do things with… I just can’t even fathom it!

      Reply
      • Suzanne
        May 10, 2011 at 10:07 am (6 years ago)

        I couldn’t either. It was about 3 1/2 years of really cutting back, like no car, we commuted (a long way!!) to work, but we just couldn’t afford the $800 a month a car would cost. It was almost impossible to think that we’d ever be out of debt. It also took a while to get used to spending money again after we were debt free. Took us ages to buy a car because we were terrified of parting with our hard earned money. Last year we finally took our first real vacation in about 8 years.

        Your day will come and have a party (budget party!) to celebrate your hard work.

        Reply
  8. Ashleigh
    May 10, 2011 at 9:40 am (6 years ago)

    Thanks for these tips! I am trying to save for a car so right now I can use any money saving tips.

    I tried mint.com but I didn’t like it. There may be a way to get around this, but why I didn’t like it is because I have a keep the change savings account and all of those transactions showed up in mint so it became really hard to read/use. It seems like a good tool if you didn’t have this account ot there was a way to hide it.

    Reply
    • Beth
      May 10, 2011 at 9:59 am (6 years ago)

      The transactions do show up but only under the savings account, not on the home screen so for things like that it doesn’t bother me. I had one of those savings accounts for a long time and cancelled it because they put a limit on the number of times I could transfer money out, and I always needed it!

      Reply
  9. Liz
    May 10, 2011 at 9:42 am (6 years ago)

    I used Mint when I first started out in the real world and it was very helpful.
    I also think another good tip is to ask advice from financially savvy friends and family. They can be really valuable resources.

    Reply
    • Beth
      May 10, 2011 at 10:00 am (6 years ago)

      That is a great point! People who are really financially savvy get a kick out of helping you, too. My sister helped me a lot when I first had BofA debt, but after she helped me set up a budget I felt SO ashamed I left myself back into debt that I didn’t talk to anyone about it!

      Reply
  10. Liz
    May 10, 2011 at 9:46 am (6 years ago)

    Thanks for writing this. It’s really helpful to see that other people my age are dealing with similar issues.

    I don’t use Mint because my credit union won’t work with them, and Mint doesn’t have a way to input information in otherwise.

    But I was inspired by your post and a couple of conversations on the WW message boards last week and set up a spreadsheet (I used google documents so I could share it with my husband). We were shocked at how much we were spending in some categories (including groceries – $600 a month for 2 people!).

    I’ve got my debt under control at this point. It will be years before I’m out of debt, but I’m on a repayment plan and it’s manageable. The next stage for us is to start saving. Over the last 2 years we’ve saved very little, and just blamed the high cost of living in DC. But once we actually saw our spending charted out, we could see areas where we could cut back, and in a lot of instances, it wouldn’t impact our quality of life at all.

    The other trick I learned is that a lot of offices that offer direct deposit will deposit to more than one bank account. I am in the process of setting up my paycheck so that 5% automatically goes into a high-yield savings account that’s not connected to my checking at all. Right now that account is our emergency fund, but the hope is that it will eventually also serve as a down-payment fund. If I have an account that I never see, and it takes 3 days to transfer money into checking from, I’m a lot less likely to try to use that money for anything that’s not an emergency or well planned in advance.

    Reply
    • Beth
      May 10, 2011 at 9:51 am (6 years ago)

      I have an ING savings account too, and the 3 day thing REALLY helps me not to touch it. That’s my emergency fund, and I know there’s mixed reviews on whether to keep saving while paying off debt, but for me, having that $1000 cushion is enough. I’ll be able to save up money really quickly once I’m out of debt since I’m paying around $800/month towards it right now, so I think for me it makes more sense to get out of debt and then start racking up my savings account.

      Also, isn’t it SO eye opening when you actually look at your expenses? I don’t know why I hid from it for so long! I thought I was going to have to face reality that I had no money, but the reality was I did have extra money and I was just blowing through it!

      Reply
    • Liz
      May 10, 2011 at 2:02 pm (6 years ago)

      I forgot to add one more tip – shop around with banks and credit unions. I found my credit union is a lot easy to work with than the banks I had credit cards with. BofA was more than willing to give a 19 year old a credit card with a $10K limit (I wish I were kidding). But when I got old enough to realize that I had to get my spending and debt under control, the outstanding debt, the debt they had approved me for, was held against me when I tried to get a consolidation loan. My credit union was willing to look beyond the printed credit report at other factors, and gave me a much better rate. I actually felt like a person when I dealt with my credit union, and not just a credit score.

      Reply
  11. Gretchen @ Honey, I Shrunk the Gretchen!
    May 10, 2011 at 11:00 am (6 years ago)

    I’m trying out the cash envelope system right now but I’m not sure how well it’ll fare. If it doesn’t go well for me, I may do what you did with the debit card fund. It’s just so much more convenient to use a card, y’know?

    Reply
  12. beyondbananas
    May 10, 2011 at 11:14 am (6 years ago)

    Mint.com sounds awesome. I do not use it (yet), but I think that it would be great to have all of my info in ONE place!

    Reply
    • Beth
      May 10, 2011 at 11:19 am (6 years ago)

      I HIGHLY recommend you check it out. It’s awesome whether you’re working with debt or not!

      Reply
  13. Emily
    May 10, 2011 at 11:29 am (6 years ago)

    Love this! I’m also a Mint.com user and I honestly don’t think I could make it without using it after taking a pay cut. It is a lifesaver!!!

    Reply
  14. BrandonA
    May 10, 2011 at 11:54 am (6 years ago)

    For anyone having issues with Mint with getting their accounts uploaded. you can also try Yodlee.com. I believe they were developed by the same company. I’ve used both, but find that Yodlee works better with my accounts and I can load all of them but 2. I even had issues getting PNC into Mint.

    Reply
    • Beth
      May 10, 2011 at 11:58 am (6 years ago)

      Hey Brandon – Thanks for the tip about Yodlee. I’ve never heard of it before now but I’ll check it out!

      Reply
  15. Jamie
    May 10, 2011 at 11:56 am (6 years ago)

    Great tips Beth! I really want to get out of debt and I need to buckle down and be strict with myself. I have NEVER stuck to a budget but I am almost 29 years old and would like to start my 30’s without my college credit card debt!!

    Reply
    • Beth
      May 10, 2011 at 11:57 am (6 years ago)

      Making a budget can be scary the first time, but its also SO eye opening to see how much money you have coming in, compared to what’s going out to bills and what is left over. If you need any help getting it set up, feel free to email me!

      Reply
  16. Stacy
    May 10, 2011 at 12:06 pm (6 years ago)

    The idea of Mint.com scares me. All of your worth in one database…our Playstation account just got hacked and we had to shut down our credit card account associated with this in fears that our information was compromised. What’s to say a hacker can’t get into this place?

    Reply
    • Beth
      May 10, 2011 at 12:11 pm (6 years ago)

      Hi Stacy, Here’s the page that talks about security: https://www.mint.com/how-it-works/security/ for Mint.com. I’ve never heard of anyone ever having issues, but it is kind of scary when you think about it!

      Reply
  17. Lisa
    May 10, 2011 at 12:32 pm (6 years ago)

    Michael did a lot of these things to get his finances under control. He loves Mint. There’s an iPhone app for it too. He’s gotten a handle on it and he’s so close to having everything paid off! Way to go to both of you for using these tools.

    Reply
  18. Ashley
    May 10, 2011 at 12:47 pm (6 years ago)

    Congratulations on the moves your taking towards financial freedom!! Definitely be proud of yourself!

    Reply
    • Ashley
      May 10, 2011 at 12:47 pm (6 years ago)

      You’re**

      Reply
  19. Roz
    May 10, 2011 at 12:51 pm (6 years ago)

    Excellent tips Beth, thanks. I should set myself up on mint….I’m good at knowing what comes in and goes out, but it would be good to have that all done for me. Have a great day.

    Reply
  20. linzlikewhoa
    May 10, 2011 at 1:06 pm (6 years ago)

    I love mint! It really helped me with realizing where I needed to cut back spending (Starbucks, Amazon.com, what?), and I’m a big user of their budgeting feature.

    Reply
  21. Lisa
    May 10, 2011 at 4:59 pm (6 years ago)

    Another great financial post! After your recommendation last week, I set up my Mint.com info and applied for a 0% APR credit card. I’m hoping to transfer my debt there and start paying it off! Now I need to do an excel sheet.
    Thanks for the tips!

    Reply
    • Beth
      May 10, 2011 at 5:05 pm (6 years ago)

      Aww yay I’m so excited that my post caused you to take some action!! it feels SO GOOD!!

      Reply
  22. Katie
    May 10, 2011 at 7:30 pm (6 years ago)

    We use Mint.com, and we really like it… when it’s working. But we find that a lot of our accounts error out pretty often, and it can be a headache to maintain! Have you had that problem at all? Might just be the sheer number we have as a married couple with a home and student loans, etc.

    Reply
  23. kristisn
    May 10, 2011 at 7:55 pm (6 years ago)

    Those are all great tips! I have never used mint.com, but I think that I need the help right now.

    Reply
  24. Shannon [Tropical Eats]
    May 10, 2011 at 11:16 pm (6 years ago)

    used mint.com religiously until about 2 months ago. Have gotten so caught up in eating out recently and lost track of my budget 🙁

    Need to get back on board ASAP.

    Thank you for these tips!!!

    Reply
  25. Heather
    May 10, 2011 at 11:21 pm (6 years ago)

    We’ve been using Mint for about two years now and love it. It works great for my husband and I because we both get the emails and so we’re both aware of what’s going on. It has really helped me with a budget. Before we started using it I had no idea what I spend on groceries, gas, eating out, etc. Now everything is budgeted and I can see how I’m doing at anytime during the month.

    Reply
  26. Liz
    May 11, 2011 at 8:44 am (6 years ago)

    These are great recommendations – congratulations on tackling your debt. As you mentioned before, gaining a healthy lifestyle and taking control of finances are so similar! I was struck by your ending comments:

    “I finally came to a point where I realized hiding from my finances wasn’t making the situation any less real.”

    That’s how I felt when I realized that I wasn’t going to magically lose weight just because I desired a thinner shape. I needed to start doing something.

    ” I thought that looking honestly at my finances and sticking to a budget would make me feel VERY restricted…. finding out where my money was going and taking steps to getting out of debt is SUCH a freeing feeling.”

    This is exactly how I felt about being accountable for my food choices (i.e.- tracking calories)! I was nervous as first, but now I am proud that I understand what I’m eating.

    Thanks for sharing!

    Reply

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