Where Do I Begin?

I have been asking the question as to what information is needed or wanted the most by consumers and the response has been, "where do I start?"  Of course reading the first two blogs will be the beginning, because you have to get your mind in its best position in order to do what must be done.  You have to be aware that there are financial and mental traps out there which will hinder your progress.  Most people would say you must begin by creating a budget, but that is not the very first step.  Before you create a budget you must first know where and how you are actually spending your money.  You must first audit yourself to see what your patterns are and your bank statement is the best gauge to show you.  You might be asking why do I need to take the time to go through my bank statements.  The best response I can provide to you is that most people paint pretty pictures for themselves of how they are spending their money, but numbers are not abstract or full of color it is black and white.  Emotions and money can not share the same space in order to be productive they must live separately.  You will use the bank statement to create the budget, by determining the necessities from the wants and fixed payments, as well as how much you actually spend at Walmart or Lowes.  Once you have gathered this information you will begin creating your monthly budget.  You must be asking why do I have to create a budget, when I can just pay the bills as they come?  The best answer I can give you is when you make any kind of plans you always write them down, so that you can gauge your progress.  When you are at work and the boss needs a break down of how you are going to complete a project, you don't just tell him/her you write it  down in a presentation.  You must treat your own personal finance as a business venture and map your progress.  If you don't see what you have and determine where it should go you will eventually loss money.  You can not present a development plan with one set of financials and have no idea of how much you have to work with and determine what is needed to complete the project.  A budget creates a sense of accountability and discipline, which is greatly needed in order to succeed financially.  Here at Renew Financial Consulting, we are edger to help you get started on the right path.

Changing your financial mindset.....

I believe this is a great topic follow-up to your feelings about yourself and your debt.  I say that because many times when people feel so ashamed of debt they will not ask for help or they have a difficult time receiving the help.  When the mortgage crisis started many people had to ask for help who never experienced a financial hardship before.  People from all walks of life were on the same page of confusion as to who to pay, what to pay, and how could I have made such a bad decision.  People who made more than enough money were living on credit, based on choice and now they are trying to figure out what to do now.  There were also those who now depended on their credit cards to maintain a standard of living.  Your FICO is a very important number, but it is not worth more than you, you are more than your score.  Your score can always be changed with time, but if you think less of yourself for it you will have a more difficult time resolving the issues.  When you have a decrease in income, but the bills remain the same you have to make a decision based on priorities.  If you are a parent, the priority is your family and you make decisions based on their needs.  Being a good parent, but not being able to pay all yours bills, doesn't make you a bad person.  You have to check pride at the door, accept where you are and move forward. Your priorities should be based on your needs not wants.  If you can survive without it, that is not a need.  You must change your spending habits to match your current financial status and not remain in the previous financial world.  You must shrink your budget immediately.  When you do better you can get those things back, but also think do you really want or even need them back, in an effort to begin saving.  We were on this earth a long time before we got all these new technical things and luxuries.  Remember I am here to help your along every step of the way at Renew Financial Consulting!

Should you feel bad about being in debt?

I ask this question because there are commercials being shown that suggest you should.  I used to think I was a bad person for being in debt and I was never told any different.  When the bill collectors would call I wouldn't answer the phone or if I did answer I would want to cry due to the way they would speak to me.  I felt they had the right to speak to me that way because I incurred the debt.  Not fully understanding how debt worked or how it grew to such an outstanding amount, also not knowing my rights as a consumer I just accepted it.  These commercials work because they play on your emotions and your need to be a productive person in society.  Don't get me wrong those are great attributes, but money is not an emotional being.  You can not make money decisions based on emotions, nor can you start the rebuilding process on emotions.  You have to begin the process understanding there is an issue as well as you want to clear it up to better position yourself for your financial future.  I say NO, you should not be ashamed, embarrassed, or feel bad about yourself.  That is a financial issue not who you are as a person, that aspect can always be changed and managed with some guidance.   You must know your rights as a consumer and you must know where you stand financially.  You should never allow yourself to be forced into a financial obligation you cannot afford.  That is why you must create a true budget and be completely honest with yourself about where you are and what is most important to you.  More than half of Americans are in debt and have no clue how to get out or how they got there.  Renew Financial Consulting is available to help you with your financial transition.