Everyone wants to “get money;” yet, so many of us are living far beyond our means. I was one of them. Living paycheque-to-paycheque, borrowing money from my mom and sister to make ends meet and my credit was in shambles. I used to be more concerned with the picture perfect life that I was projecting instead of focusing on fixing my embarrassing reality. Today, some will look at my life and only see the glamour of running my businesses, working with brands, travelling the world and spending time with my husband and daughter. What most people do not know is that it took years of struggle, hustle, and planning to get to a place where the very thought of my finances would no longer be a source of anxiety.
I have always had entrepreneurial ambitions, so I started my first company at 25 years-old while still working a full-time job in the financial sector. The social network and event series, “What Women Want” became very successful quickly and soon I was earning a profit that first matched then surpassed my daytime salary. I made the decision to leave my job and work part-time on a consulting basis. However, as a newbie to entrepreneurship, I did not understand the ebbs and flows that come with the territory. I did not account for the fact that cash flow in owning my own business would be inconsistent.
I spent money faster than I could make it
I would make $20,000 one month and then $200 the next month, but I was spending as if I was making my highest profit every month. Far from my mind was the $40,000 in student loan debt I still had and was paying the bare minimum to reduce. The truth was that I was not making enough money to be financially comfortable, even though I was operating as if I was. Between student loans, the high cost of rent living downtown Toronto and my habit of splurging on red bottoms, I slipped further away from my goals and dug myself deeper into a financial hole.
The wake-up call
One day, my poor spending habits and money management outpaced my earnings and forced me to get it together. The day I decided to completely shift the trajectory of my financial future is when I went to a bank machine to take out some cash, the machine kept my card and told me to “call a number”. Forced to face my truth, the amount of debt was not going to change, so I knew I needed to.
I began with assessing my values and realized that my long-term goals were to eventually have a family and own a place of my own. At the time, these milestones seemed too far out of reach but I made the decision to go back to the corporate world and take a job that was commission based so I could begin tackling my debt at a faster pace.
Don’t just complain about it, do something about it
At the same time that I began to awaken to the realities of my finances, I also started dating my now husband. I was initially embarrassed to reveal the secret I had been hiding from everyone to him, but when I did, his reaction was the opposite of what I expected. Instead, he helped me make a plan. For about three years, I learned to live completely within my means. We were living together, and our rent was affordable because I was splitting the cost, so the money I saved I used to put towards my student loan. I also took every one of my commission payments and paid it straight to any debts I owed. Living frugally, I reversed my lavish spending habits and skipped buying new clothes or dining out most days. Within three years of this commitment to changed behaviour, I was debt free.
Learn to be goals in real life
Bouncing back from both business and college debt gave me the confidence to pursue another goal of mine – home ownership. At the time, my husband was financially ready to purchase property, but I knew I still had work to do in raising my credit score to at least 600 and save a substantial down payment. Every pay cheque I received, I contributed 10% of my income to a savings program that my company at the time would match with 50% and I funnelled all the money I previously used to pay off my debts into a savings account. I was debt free by age 31 years-old and we bought our first house two years later. No longer living my life to impress others, I made a plan and committed to it so that I could pull myself out of a rut to become my own #goals.
Take comfort in the power of knowledge
While it’s common for people to hide from their overdue bills and ignore their mounting debt, knowing that change is possibleis what will help create a new future. Face your finances and then educate yourself on what it’s going to take to keep your money intact. With a background in finance, I was more of a self-starter in learning everything I could to dig myself out of the hole I created. However, too many of us suffer in silence and allow embarrassment to keep us buried in bad financial decisions.
This Financial Literacy Month, Capital One Canada and Credit Canada have partnered to bring Credit Education Week to life across Canada. Beginning the road to financial freedom starts with honest conversations that leads to sharing tips and tools. The more we share, the more we normalize financial conversations that can help us heal and inspire others to begin their journey. Confessing what brought me financial shame with an honest talk about money, allowed me to empower others with simple yet life-changing solutions. Which is why Credit Education Week is sharing not only the resources to get your finances right, but also cultivating a #MyMoneyVision community for us all to share our stories, fears and ides for change.
What’s your #MyMoneyVision?
This blog post was created in partnership with Capital One however all thoughts and ideas are my own.