As the Founder of Financialdemics, it would only be right to tell you my money story and how I improved my finances. During my senior year of college, well let me back up a little bit, my mom told me not to get in debt while in high school but she didn’t give me a reason why or any specifics. I am a why person. Now back to my senior year of college, it was the fall semester, I was graduating in the spring and I had a flexible job working in a "student friendly" call center. I had a plan and it was going well or so I thought.
One day I walk into work after class and something wasn’t right, everyone was quite. Before I could put down my stuff and ask what’s wrong, I was pulled into my boss's office and told the company was closing my department as of September 30th. My boss told me they were going to help everybody get a new job before they closed but my school schedule was so crazy, I knew I would not be able to find a job that was going to pay me the same rate and work with my schedule. I spoke with all of the employers they brought in for job fairs but no one was willing to work with my schedule, so I decided to just take the unemployment and wait it out until I graduated in May.
Pause for a quick announcement:
“Unemployment only pays half of your income!”
Back to our scheduled program: All of my disposable income was gone!!!!! It wasn’t much but a change like that as a single parent was a big deal for me and it really exposed the fact that I didn’t have a savings cushion.
The only thing that was saving me was the fact that the state unemployment rate higher than the national average, so each month the state was extending unemployment pay pass the standard 6 months. I was little worried but not stressed because I was graduating in May and I could take the time to find a “good job” that pays well.
Two weeks before graduation, I make my usual call to the Unemployment Hotline to find out if my weekly deposit was sent and all I can remember hearing was $0.00.
I called the Unemployment Office and they told me that the state unemployment rate dropped below the national average so they were not extending it for anyone for the month of May and to call back at the beginning of June see if I qualified again.
June! A whole month without income! That was confirmation of what had been on my mind since I was laid off, everyone needs to have more than one stream of income and an emergency fund. I prided myself on being able being able to take care of my child without any help and that was no longer case, I was completely broke I didn't have any money in savings and I still had to pay for monthly expenses and get my stuff together for graduation. Let's just say it was a rough 2 weeks.
Before my unemployment stopped, I was already applying for jobs in my field but I started applying for any job available and a week after graduation I was offered an interview and an investment company. I went into that interview determined to get the job that I figured would pay me well (it was investments right)...not really. I got the job and the offer was not good and I didn’t negotiate (big mistake), because I was desperate.
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I started the job but I was still broke for at least another month because I had to wait two weeks for a paycheck, I had to catch up on May bills and I had to pay my parents back for June daycare expenses.
Once I was caught up on everything I was still running out of money very quickly due to overspending, so I tried to create a budget but it really wasn't a budget it was a list of what I had to pay with no plan for what was left over so I was easily spending all of my disposable income before payday and that doesn't really work when you have a three-year-old with unexpected expenses.
During this time I was so frustrated because I felt like I was still in the same place I was in two weeks before I graduated. I started searching online for budget tips because my parents always had a budget and they always had money available for emergencies and that's how I found Clark Howard, Suze Orman, and Dave Ramsey.
Once I figured out how to budget, I still struggled with monthly budgeting and eventually started budgeting by paycheck which helped me learn how to manage my money and open up my cash flow. Even though I have had some slip ups along the way (no one is perfect), my experience motivated me to build my savings, pay off my consumer debt and to build multiple streams of income.
What is one experience you've had that has changed the way you handle money?
