August 2013 was a month that I’d like to wipe from my memory. Prior to that, we thought we were golden. We carried no credit card debt and we contributed to our retirement. Our small business was going well and we said so long to renting office space and purchased a commercial property. Yep, life was good. But in August 2013, our business softened, renovations to our new building were more costly than planned, and we were now the owners of two mortgages, our home and our business. The numbers that looked great on paper were in reality turning out to be very challenging. We had a lot of debt, not enough cash flow, and very little set aside for emergencies. If I could erase that month from the calendar, I would. This summer, I had the opportunity to work with Prudential on their Women Inspired campaign. I was reminded that even though August 2013 was a scary time, I learned some valuable lessons and proved to myself that I can make positive changes with regards to my family’s finances.
5 Lessons Learned When Our Finances Went Awry
1. Do NOT put your head in the sand.
Instead, take a deep breath and assess the situation. After my initial anxiety attack, I gathered up all of the facts and updated our balance sheet. Where were we over-spending? How could we increase our income? And where did we go wrong?
2. Communicate with your spouse.
One of the hardest conversations I have had with my husband was when I told him that I didn’t know how we would pay our bills that month. I had put all of that pressure on myself when we really needed to be working as a team. We talked through our problem and I felt such a sense of relief to get it off my shoulders.
3. Stay positive.
4. Create a plan and stick to it.
The extra debt that we took on was beginning to suffocate us, so I sat down and created a step-by-step plan. I analyzed both our business and our home expenses, created a budget, and made a plan for every dollar that was coming in and out. I created our Debt Freedom Plan and we still follow it today.
5. Don’t become complacent.
It’s so easy to let things coast when life is going well. But you will lose momentum, so always challenge yourself to improve.
Bonus lesson: A pint of mint chocolate chip does not fix anything, except maybe soothe your soul.
August 2015 Update:
Now two years later, we will pay off a business loan by September 1, and our plan is to pay off our last two non-mortgage loans by the end of 2016. At that point, we will get back on track with saving for our retirement, our daughters’ education, and hopefully have some extra funds for fun. I will never look back on 2013 fondly, but I am confident that my family is headed in the right direction. Read my other Women Inspired posts here:
- A Goal without a Plan is just a Wish
- My Life Plan
Have you been following along with the Women Inspired campaign? Is there anything you can apply to your personal situation? Please share by joining the growing community of women inspired in the comments below, or on Twitter using the hashtag #womeninspired.