I'm so excited to bring you the second edition of Bloggers & Budgets. I'm sure most of you know this next blogger. She is basically ubiquitous with the genre of personal style blogging. She is one of the first bloggers I came across when I started my foray into blogging and she has continued to be a source of inspiration. She has a magnetic personality that seeps through everything she writes and of course she is from the great state of Michigan. This week the lovely Tieka of Selective Potential talks personal finance!
My name is Tieka and I'm the blogger behind Selective Potential. Currently, I'm 24 years old and I live on the shoreline of west Michigan. I work full-time as a graphic designer at a communications company in the city. I've been married for three and a half years to my amazing husband, Brett, and currently we don't have children (yet!) We spend a lot of our time riding scooters, playing in our punk band and catching movies on the weekends. We love to take adventures and small trips around the state and find the corniest things possible to do with our time. We're kids at heart!
1. How would you describe your approach to personal finance: hands-on or hands-off?
I am very hands-on with our personal finance situation. Brett lets me take the reigns of our budget and I thrive on it. Plus, I'm just better with money than he is. If it were up to him, we'd own a record shop and eat a $30 pizza every night for dinner! I plan way ahead for our budget. Before each month begins, I have a budget where I plan on all of the bills and additional expenses I can guess we are going to have. I track my checkbook balance in a very detailed spreadsheet - making sure to create formulas so I know how much we've spent on: groceries, dining out, entertainment, clothing, etc. If I see that we're getting close to the end-cap on a budget, I'll try to cut back. On a daily basis, I'm balancing our checkbook and paying bills! I like to be ahead of the game and always know where we stand - financially!
2. How do you balance your finances with style blogging? (Buy everything on sale, remix, budgets?)
When I first started style blogging, it was so easy for me because I had an entire closet of clothing I hadn't yet showed off to the world! After a few months and I had exhausted my closet, I knew I would have to start purchasing more items to keep it fresh on the blog. In the very beginning, I turned to thrift stores for new ideas. Some of my best ideas came from remixing and thinking of a piece of clothing in a different way than what it was meant for. Like turning a larger skirt into a dress with a belt, perusing the old men's section for grandpa cardigans, etc. I also thought of very inexpensive ways to make a bold fashion statement - and that's where I turned to crazy patterned tights or large chunky belts over everything. Now I have a full time career and a budget to shop, but I still look to my old ways of remixing items and hunting for sales. But once in a while, I'll splurge on something I truly love and it feels great!
3. What do you want to accomplish [financially] in the next five years?
Financially, in the next five years, my husband and I would love to own a house. We've been working hard at saving 10% for a down payment and having extra in the bank in case of those pesky "hidden costs". It has been insanely hard for us to save money for some reason. I feel like any extra money we get - we take a trip, or we go on a shopping spree. We don't save any money. So when our cars break down or we need to pay a medical bill, we are so unprepared. I'd love to have a savings account that can bail us out in case of emergencies and I'd love to comfortably pay a mortgage. Those are two huge goals for us!
(editors tip: I've always found paying yourself first is the easiest way to save. Build and amount of savings into your budget by taking it out before you pay all your other bills. Schedule an automatic transfer to savings the same day you get paid. Along the same lines as the automatic deductions for tax, health care, and/or retirement plans- it stings at first to have less, but you eventually stop noticing and have way more in savings)
4. Do you have any financial regrets? (something you wish you had done sooner, hadn't done at all?)
When I was in college, I racked up some major credit card debt. I went to a very expensive private art college and it was all paid for in financial aid and student loans - but it left me with no extra money for food, fuel, utilities, etc. It paid for classes and rent - and that was it. I had a small part-time job at a coffee shop, but that didn't go very far either, so anything extra I needed or wanted - I used my credit cards. I got engaged my freshman year in college and so Brett and I put so much of our wedding expenses on credit cards (so dumb!) so by the time we were married, we had over $7,500+ in credit card debt! I was so lost and felt totally overwhelmed that I had to sign up for a "debt relief" payment plan! They reduced all of our interest rates and closed all of our credit cards - and within 3 years - we paid it all off. I totally learned my lesson there and would never do anything like that again. We have two credit cards now - with very low limits- and I keep it that way. Even if we get the offer to increase our credit limit, I always turn it down.
5. Share with us your best/favorite tip for saving/spending/paying off debt.
Well, I can't help you with saving money. I'm still a mess in that department. But I'm great at budgeting spending costs - even though I never budget in savings. Ha! Shame on me! But, all of our bills are paid on time, every month, we always have money for groceries, entertainment, fuel and anything else we'll need that month. I would just recommend creating a budget each month. Guesstimate what you think you'll have to spend - on bills, utilities, groceries, everything. Even if you can't stick to it exactly, it will help you realize what you are spending each month and you'll be able to cut down on things you don't exactly need.