I just realized that I’ve been making an accounting mistake for the past three months. I was spending money I didn’t have and it has eaten through the rest of my budgets and I’m afraid I am under a lot of debt.
All of this happened in the span of two years. Ever since I had committed to having the house built. There was also the hospital bills for my late brother, but it has mainly been the house.
I have for the most part been negligent. I cannot blame my tools because I have not been very diligent in updating them. It’s all me.
Sheet.
So what can I do now?
First is to calm down. Breathe. All of this is fixable, you just need some ways to take make your earnings larger than your expenses. Breathe again. Breathe a little more. Next, focus on your body. Have you had lunch? It’s still early. Ok, that’s OK. We’ll eat soon.
What Went Wrong?
When I was doing accounting this morning I noticed that my account balances don’t seem to match-up with the amounts in my application, which was strange because these usually match after paying for all my credit card bills. TLDR; I’m short on funds.
Out of curiosity and a little amount of concern I also checked if my retirement funds to see if my plans to withdraw them later in the year would still be feasible. After reading all the fine print that wasn’t covered in the employee presentations I realized that I misunderstood one important detail: that I would only be able to withdraw voluntary contributions, which is (only) 35% of my vested balance while working for the company, the only way that I can also get my employer match and past service contributions is if I opt to retire early, quit or be fired. Not good. 😖 So my plan to withdraw my retirement funds has gone to shit.
So all in all I am short on funds and I need to find a way to be able to pay the rest of the house construction, all while paying off my other debts (mortgages and loans).
How Do I Get Out of This?
Though I already had thoughts on what I need to do to start getting myself of of this rut, I thought it wise to do research and find financial advise similar to my situation. First thing I did was go to youtube and look up ways to get out of debt. It took me to Ramsey Solutions, owners of the budget tracking app I’m currently using (EveryDollar).
https://www.youtube.com/watch?v=DPdfG9ba05I
https://www.youtube.com/watch?v=_o_JUR2KZKw
Research take-away: Something’s got to give. In order for me to get out of bad debt is to make sacrifices and/or add additional sources of income. It’s as simple as that.
First Step: Stop the Bleeding
I first need to settle my bills and loan payments for the month.
Next Step: Balance the Budget
(Currently in progress)
This will means further optimizing my expenses and cutting off non-essentials like entertainment (streaming and premium subscriptions). I will also need to offload expenses that aren’t really planned (like payments I make for other people). If I happen to still fall short of cash, I might need to borrow some in the meantime that is interest free (I’m thinking right now of borrowing relatives). Getting a personal loan is out of the question because it usually means paying off 20% of the amount borrowed as interest.
Next Step: Rebuild
(Upcoming)
If need be I will need to find alternative sources of income
- sell some of my things
- revive my sidegig #overemployed
I think this will be inevitable, if I am to solve these problems as soon as I could.
Next Step: Practice Better Financial Discipline
(Upcoming)