Next Gen Personal Finance – Grow Up with Money!

Are you looking to transform your financial life? Financial health is very similar to physical health. Even if you’re born with a great body, energy and dedication to maintain a healthy financial life. 

While I grew up in a very loving home, I wasn’t given the best financial education. I was taught the basics about finance: how to save, spend, and give. But I had no idea how to balance a checkbook against a bank statement or how to set and stick to a budget. 

This previous financial strategy did not work for me at all, but it was hard work to discover a better financial strategy that worked for me. I call this updated strategy Next Gen Personal Finance.

If you’re looking for a better financial strategy, keep reading! 

Previous Financial Strategy- Ignore and Hope it will Get Better or Go Away. 

Previous Financial Strategy- Ignore and Hope it will Get Better or Go Away. My preferred method of dealing with money in the old days was summed up in the phrase “ignorance is bliss” I knew that I had debt, but I tried my hardest to ignore the fast growing balance. When my Discover statement came in the mail, I filed it directly in the trash. I didn’t check my statements because I didn’t like what I saw. I was babysitting and personal assisting my way further into debt. 

Why I Chose this “Strategy” 

I can’t say there was a lot of thought that went into this strategy. People around me were also chronic under-earners and laughed about not making a lot of money. I surrounded myself with these types of people because it was comfortable. These were good friends that were great people, but were not the best people to influence my financial strategy.  

The Benefits of the Old Approach

The previous approach to handling money was terrible, but it definitely had its benefits. By ignoring my money problems, I didn’t have to face the immediate anxiety caused by my unconscious spending or lack of immediate income. I didn’t have to curb my spending below my comfort level.

The Downfalls… and there were many 

I was always anxious because I knew that my finances weren’t in good shape. Rather than facing the discomfort once and making a change, I kept on my missguided way. I also felt like I was floundering because I didn’t have clear goals in mind. I knew that I didn’t want to keep living this way, but I didn’t know how to change. 

The Turning Point – What Made Me Change?

The change came when I decided that I was ready to face the pain of changing. It was a cold Sunday afternoon in early February. The haze of the holiday season had faded and I finally hit the point where I had trouble making minimum payments on my credit cards.  

What Did I Do? 

I looked for advice from people who were good with money. That’s the most important step. I couldn’t do it on my own and I decided to get help. The first step I took in this Next Gen personal finance approach. 

Next Gen Personal Finance Strategy 

I decided that I wanted to level up my financial game by deciding to make good decisions. Personal finance is less about head knowledge and more about behavior. This is a loosely paraphrased Dave Ramsey quote but I decided to use it in my financial journey because I find it empowering. This quote reminds me that I don’t need more knowledge, I need to make the right decisions.

Step One – Face it!

In this new financial strategy, I face my finances rather than ignoring them. This approach requires a daily commitment to financial truth. It might be difficult to face the numbers at first, but the more you do it, the easier it becomes. 

I chose to remove the emotion attached to my financial situation and simply viewed the numbers as numbers. The numbers were not a reflection on my personal worth or success as a person. 

Step Two – Give Yourself a Break 

For the first thirty days, I gave myself a break from worrying about money. I took a thirty day rest from stress and anxiety and chose to focus on getting clarity around my numbers. I reached out to any overdue creditors and let them know that I would be reaching back out in the next thirty days to arrange a payment plan. 

Step Three – Make a List and Check It. 

During those thirty days I made a list of all my debts. When I began this process, I had no idea the full total of my debt. I knew that I had large balances, but I didn’t keep track of them because the total made me sick to my stomach. At this stage, I simply made a list of everything I owed. I reached out to credit bureaus and reviewed my credit report for any outstanding debts I might have missed. This process gave me the largest amount of  

Step Four – Make a Plan

My income became the guide to my spending. I allocated a portion to my food, housing, and transportation. My modest needs came first in my budget, and then I began a very conservative approach to repaying my debts. I would take care fo my own needs first and then set about repairing the financial damage. 

Step Five – Get to Work! 

This was the step that saw me get back to work. I was between jobs when I hit my financial rock bottom. I had left a job with no other job offer, which I don’t recommend, and was feverishly applying for work overseas. While I had a plan in mind, the timeline was taking much longer than I had expected. I committed myself to stepping up the part time gig work and ruthlessly cut down my spending. I write about increasing my income here.

What this new approach requires: discipline, strategy and a better relationship with my money! 

This approach requires daily commitment to creating a greater financial future. Rather than giving into my impulse purchases, I delay gratification until I can pay in cash.  Occasionally I treat myself. Mostly I stick to my defined budgets. 

For a look at some more financial lessons I had to learn the hard way, check out this video. Don’t be like me! Learn from other peoples’ mistakes!

The Pay Offs – Complete Clarity

I have goals and targets to hit. This next gen personal finance approach brings me closer to those financial goals. While I might not be moving as fast as I’d like, I know what I have to do to get to where I want to go financially. 

Of course, sometimes life happens and situations don’t always go as planned. This week, I had a car brake repair sneak up on me and so my savings targets will be lower this month. But no matter how challenging my financial situation becomes, I know that clarity is better than ignorance. I’d rather know the numbers, no matter how bad they are.  

Summary – I upgraded my financial approach by taking accountability, facing my numbers, and staying within my budget.