Thanks to r/personalfinance, I completely changed my financial well being. I got myself completely out of debt, took care of all my debt that was in collections, set up a budget and no longer have to live paycheck to paycheck, and stopped spending money on stupid, useless shit! All thanks to this sub!!
So, when my friend told me that “the more money she makes, the more broke she is”, I felt compelled to help her better understand finances from what I’ve learned, in the best way I could, as I was in her shoes not too long ago.
I first told her to calculate her recurring monthly expenses, such as phone bill, auto insurance, car payment, etc. Then, I told her to calculate her monthly income (since she’s hourly and it fluctuates, I told her to average her paychecks for the past ~4 months), subtracting her expenses from her monthly income and using the rest to get out of debt.
Knowing that she has credit card(s), I explained to her the avalanche method. I told her she should pay off the card with the highest interest first, while paying minimums on all the others, and as each card gets paid off, add the payments of the prior card to the next card.
Her response to me was “So I’m really not in debt at all... I have one credit card that I pay every month on....”
insert red flag
I didn’t want to be judgmental or accusatory (because, I was in her shoes as far as poor financial habits not too long ago) so I said “So your credit card has a $0 balance after you pay $100 on it every month?”
To which she says: “Well, no. I didn’t realize that was debt”.
And then it hit me that, many people, myself included at one point, lack/have lacked the resources to learn about proper financial habits. Which makes me really, really sad considering this country (U.S.) is really big (at least in my opinion, and no, I’m not talking politics nor do I desire to) in consumerism.
Financial health should really be taught in school, and furthermore, should be required (IMO).
Anyway, I just wanted to share this story and thank r/personalfinance for helping me get out of debt and be financially responsible! I’m trying to spread the good word as best I can!
Edit: terminology
Submitted November 07, 2018 at 07:21PM by BlueGreenandPink https://ift.tt/2DsIz7q
