Blogpost by Elizabeth Ribons
"Money isn't the root of our happiness...
But it affects all the things that make us happy"
-Deborah Daniel, CPA, Money Expert
Recently on the podcast, I hosted a "rockstar" expert on money, Deborah Daniel. She is so passionate about helping women "Make More, Keep More and Grow More Money" that she speaks about it at events and conferences, has created masterclasses around it, and is growing a program that really supports women to be successful in business and in life.
She is an exclusive member of the bank of experts on NEXT - take a look if you are a member.
Be sure to listen to the podcast #32 on "NEXT with Elizabeth Ribons" on Apple iTunes and also, listen to my brief input on money, solo entrepreneur budget practices - on podcast #31 where I touch on simple ways that we can become more aware of money - how we earn, spend and save it.
In that brief discussion, mentioned the fact that we as a society are in debt, and rather than be afraid and run from it...I suggest we change our perspective to an "I Can" mentality.
I don't mean "I can go ahead and keep spending everything I make" mentality. I mean an "I can work within my means to grow my wealth and pay down my debts and THRIVE" mentality.
Yup... It can be done. I speak from experience as I have known the ups and downs of business, debt, and surviving those lean years.
I will share what I know AND I plan to release a webinar in the Resources portion of the website that drills down on this mentality and best practices for us to thrive in a small or solo business.
It will cover tips, tool and simple, actionable fundamentals of working for yourself, getting the structure in place, and how to focus on how you will build a business and make an income. Because I get it. If you haven't done it before where do you start?
Then, when those wheels are turning and income is regular? I recommend the rockstars in the Experts portion of NEXT Career & Life to level up and make it work for you.
But many of us are in debt and not managing our money well or have lost income in some way. Let's look at the stats. Even if you are not 50 yet, the years pass quickly and you need to look at your habits now whether you are 25, 35, or 45.
In this article from Reuters, the debt-to-income ratio for those approaching or over 50 is alarming. And it isn't talked about because of emotional issues of embarrassment and shame as the article states. The answer? Working longer. But how? That will be a personal choice but it seems more and more midlifers are becoming their own bosses and reinventing their skill set into a viable business. (I will dedicate another blog post to that)
The person interviewed in the Reuter piece was an executive and took on huge debt for school loans later in life - figuring that with the new or improved credentials- he would easily pay off that loan.
Except, he lost his job at 55. Getting work at that age in the corporate world is nearly impossible - another thing not spoken about. However, there are those who are bringing this to the fore. I interviewed Elizabeth White on an early podcast # 7 "When Reality Arrives" where she wrote an essay on this very subject.
It went viral and she went on to deliver a TED Talk with over a million views and wrote a book: "55, Underemployed And Faking Normal". An excellent read supported with case studies that hit home and are chock full of usable tips and information.
She and I discussed how ageism is alive and well in our culture and occurring to a large group now in the corporate world. And as the bulk of the population ages, a real problem. This is happening to executives with several degrees - as mentioned in the article from Reuters.
Again, if you are young use this post as a way to avoid issues in the future. Additionally, we must as a culture change our ways. One of the things many "midlifers" do is start their own businesses. But they may never have been an entrepreneur in the past and are needing to continue to work - or they choose it - and find that creating their own business becomes their new life and career. It definitely will impact their financial lives and they have to assess how they are living if they are saving enough and what they are spending on.
"Oh I wish I had known what I know now"
We have all heard that or most likely have said it. Hindsight is 2020. However, I have pearls of wisdom from those experiences...
When I was in the building years of my life, (20-40) there was little thought to how I would keep, and grow my money. Luckily, I was young and worked like crazy. So there was, fortunately, was surplus for family, some savings and investing in a home, etc. But in "growing and building" years there was so very much we needed to spend money on that it was difficult to be intentional about investing.
But that is no excuse. I just wasn't well informed. I wasn't altogether thinking that my income would change and put being intentional on the back burner. Some savings and some investments were enough.
Then came a big change. I was going through a divorce, the economy went flat and my business at the time was one of the worse businesses to be in for that time in the economy. A triple blow.
My debt was rising as i was struggling to find work and adjust - I had to switch things up and learn quickly.
Here is what I did:
- I got expert advice - not right away and oh do I wish I had!! I could've dodged a lot of debt - but remember, I was used to making a nice steady income in my business, and like the article I pointed to, I thought I would have no problem meeting those obligations.
- I had to implement the 50,30,20 budget rule. With the economy going flat at that time, things didn't happen as I had expected and I had to downsize - everything.
- How? I took the 50, 30, 20 budget rule and tailored it to my "downsized" life and income. So I made sure my "needs" - the 50% was changed to the new way of life. I tightened my belt everywhere.
- Then I started keeping track of where I was spending money. I held onto every receipt and logged every debit card transaction into an app called Expense Free. That was really useful. I could see from a pie chart where my money was going and could make adjustments. You can check out well reviewed expense apps Here
- The impetus for many of us is to pay off as much debt as possible. Because no one wants to have debt. But, my expert showed me to manage the debt by paying down high-interest debts first - methodically. In the past, I would pay debt fast and not save as much. That is NOT a good idea and I learned to "pay myself first then pay the debts". It isn't as comfortable an approach with that debt number hanging over you but - at the same time - I was contributing to my savings and my retirement.
- Don't take on more debt. DON'T - School loans are ominous in our country right now and it's a problem. It is something that has to be chipped away at and managed. Our spending has to be in line with saving more and adding to our retirement funds. Even if it is a little bit put away each month...Get into the mindset.
- I had a Good, Better, Best budget system I set up for myself. Good was what I could pretty much count on every month and cover the 50, 30, 20. I had diversified and picked up some side work while my business languished a bit. My income would increase in some quarters, I would graduate to my Better, Best budget - adding more to my savings and retirement and allowing funds towards something special if I chose to. But when you are single and have a business, you have to plan for those lean months. You absolutely do not want to depend on credit cards if you can avoid it.
- Don't deprive yourself. You may be experiencing a very lean period. Stick with the budget and DO things that are special and do not cost money. It is important that you do special things for yourself but that does not always involve money. Think outside the box and be creative. AND remember:
This is your NOW it is not your forever
Debt and school loans are a serious issue for many. Since there is no easy answer that will instantly relieve that debt, it has to become something you pay a certain amount on monthly - it may have to be less than you want it to be because you want it gone so badly.
Most importantly:
Get expert advice on best practices to help you save, grow income, and pay down that debt and make a plan - then stick to it.
If 2020 taught us something, we have learned to live with less. Less stuff, less things, less spending. I hope this was helpful.
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