Nola Oaks did not plan to break any records.
She started taking classes for her degree in 1972 when her husband of 39 years died. In 2007, she was recognized by the Guinness Book of World Records as the World’s Oldest College Graduate at the age of 95. At the age of 98, she got her Master’s Degree in History.
When interviewed, she said, “I don’t dwell on my age. It might limit what I can do.”
In my financial planning business, sometimes the most limiting question I get asked is “Is it better to save or pay off my debt first?” Implicit in the question is an assumption is that the right answer is to either build savings or reduce debt. Rarely in life is there a “right” answer. Often there are several ways to get to a goal.
The financial planning industry often tells women to pay off their debt first. The challenge with that answer is you make no progress on building your savings while you’re paying off your debt. That’s especially true if you have a large amount of debt. For some, years can go by while paying down your debt before you can save if you follow the “traditional” wisdom of my industry. Time you’ll will never get back.
My own answer often takes women by surprise. I tell women if you can afford to, do both – Save AND Pay off your debt. You get the best of both worlds. Paying off your debt increases the money you have available for your goals both short and long term. Building your savings is a way to honor your commitment to yourself as much as your bills.
Your First Step – Set a budget
The first step before either paying off your debt or building your savings is setting a budget. A budget is guide to how to spend the money that flows in and out of your hands on during a set period of time (like a month).
This step can be the hardest part of planning for some women. To make it easier to keep a budget you can use either hi-tech or low tech solutions.
Hi-Tech solutions can include apps like Wally and Level Money.
Low tech solutions can include the envelope method of putting the amount you’ve allocated into a envelope. Once you have no more money in that envelope, you can’t spend any more in that category or you can move money from another envelope. Also, you can use a Excel spreadsheet to help you stay on budget.
Once you’ve set a budget, you’ll know how much you can allocate to paying down your debt, as well as, how much you can put toward building your savings.
Next Step – Paying down debt
Concentrate on paying down your debt. Use the snowball approach to accelerate your debt repayment.
The snowball approach means to pay the minimum payment on all your debt except the one with the smallest balance. You put a predetermined amount of extra funds (established once you set your budget) toward that single payment on your smallest balance debt. Once that account is paid off, you take all the money you were paying on the previous payment and put it toward the next loan, and continue until you’re completely debt free.
Make your goal to eliminate your debt in the next 24 months or less. Get creative with what you are willing to do to pay down your debt. And for more ideas read Three Painless Ways to Find Money to Pay off Your Debt.
Just as there are high tech ways to set up a budget, there are high tech ways to pay down debt using the snowball approach.
Two apps that use the snowball approach to paying down debt include Debt Payoff Assistant and the Debt Control Free.
If you are not a high tech girl, look at the low tech solution using an Excel spreadsheet from Vertex42.
When you’re paying down debt, it can be difficult to also save. But I want you moving forward no matter what even if the amount you’re saving is a modest figure.
Third Step: Start savings
Even if you need to start where I started with $5.00 a month – get started. You can start with a low tech approach and put your savings into an envelope and then put it into a savings account. However, the tendency there is for your envelope savings to become a deferred spending account.
My suggestion is for you to go high tech from day one so that your savings is automatic. Two apps that allow you to save automatically are Tip Yourself and Digit. Once set-up, you do not have to physically transfer money into your savings which is a major advantage that removes the human element of you physically having to put or transfer money into your savings account.
Now you’ve learned the three areas to take care of first. And just like Nola Oaks says that she won’t let age limit her actions, don’t let technology limit you from getting started. If you are into technology, there are options for you. If you consider yourself a technophobe, then there are options for you too.
The most important thing is to start today.
If you’ve tried to pay off your debt in the past but weren’t able get debt free, or you want to build your savings, you need a proven plan that works and someone that will keep you on track. Give me a call at 949-535-1011 or use my scheduling app, to schedule a 20 minute no-cost consultation where I calculate and show you how many months it will take you to reach a debt-free life. Schedule your time today