Practical money skills – my weekly money process

Practical money skills – my weekly money process

Today we’re going to cover practical money skills and I’m taking you behind the scenes of what I do with my own money – each & every week.

Budgeting, saving, and knowing how to move your money around, ESPECIALLY when you’re self-employed can feel really confusing.

That’s why I’m going to take you through my ACTUAL step-by-step process.

Following this process will help you reach your financial goals, ensure your bills are being paid, and help you feel confident and in control of your finances.

Most importantly, what we’re covering here really is the KEY the key to smoothing out your cashflow and getting off that feast and famine income rollercoaster – especially when you’re self-employed and you have irregular income.

And the best news of all is it only takes five minutes a week!

Having the right practical money skills when you’re self-employed can be a total lifesaver -because when you don’t know what to actually do with your money as it comes in, it can land you on this really crazy, stressful roller coaster, where it’s feast and famine, where one day you feel like everything’s great, and then suddenly there’s not enough money to pay your regular bills, and it just never feels like enough.

I know what it’s like to have next to no money.  At one stage I was a single mum on welfare payments.

And I also know what it’s like to have a healthy, six figure business income and still feel like you have nothing to show for it!

The good news is that between those two very personal experiences and the process of building a successful finance business where I helped my clients sort out their money stuff, I developed practical skills and strategies that help you smooth out your cashflow and help you take control of your money.

And what I REALLY REALLY love about all this is that it helps raise your vibration!

It aligns you with abundance and it makes you magnetic so that you attract even more money and abundance. It’s win, win, win.

Maybe the best news of all is that there’s no budgeting required because budgets don’t work.

Money systems, however, can be absolutely life-changing.

 

WATCH THE VIDEO :

OR LISTEN TO THE AUDIO:

 

OR READ THE TRANSCRIPT:

So I’m going to take you through my actual personal step-by-step process that I go through each and every week as my money comes in to allocate and distribute it all.

Let’s do this.

STEP 1: Tally your income
The first thing I do each and every week is sit down and add up all the money that came into my business that week. (For you it might be fortnightly or monthly)

This is the money that you then need to allocate and distribute and move around.

Now, I did a whole video about giving every dollar a job to do which is linked for you below – because that’s what this is ultimately all about – so go check that out next.

While I’m talking about tallying your income:
This is actually one of my favorite money mindset strategies, because as I sit down and I do this, it allows me to keep tabs on my mindset and see what my thought processes and patterns actually are.

STEP 2: Calculate your tax
The amount of tax you need to put aside is going to vary week to week, depending on how much money came into your business.

It should always be a percentage of your gross income and you should have a fairly good idea of what that number should be. This will be an estimate, but you want to make sure that you’ve got it well covered. (If you’re not quite sure what that percentage should be, then speak to your accountant, look at last year’s tax returns and make the best educated guess you can for the time being)

STEP 3: Calculate your surplus or shortfall. 

Once you know how much tax you need to put aside, you want to deduct that from the gross income that came in, and then you also want to deduct how much money you need to keep in your business account to keep your business running as well as the amount you’re going to need to pay yourself in salary or wages.

Once you’ve done that, you will either be left with a surplus or a shortfall.

You need to either allocate that surplus or make a note of the shortfall and make a plan for it. 

And this right here, this little move, that is the key to smoothing out your cashflow when you have irregular business income.

Is this something you do? Do you keep track of surplus and shortfall each income cycle so that you can help use those numbers to smooth out your cashflow? 

Let me know in the comments below: 

Do you keep track of your surplus or shortfall?

Okay – once you know whether you have surplus or shortfall, it’s time to decide what needs to happen next. 

STEP 4: Make your adjustments.
If you’ve got a surplus on your hands, it’s time to celebrate, do a little happy dance, but then you need to decide what to do with it.

First, you need to check your notes from the last payment cycle. Have you carried forward a shortfall from before? Because if you have, the first thing that needs to happen is to pay that back. 

Once that’s done, if there is still some surplus available, then you need to allocate that in alignment with your current highest financial priority.  (And if you’re not sure what that is, then make sure you check out the linked articles below next!)

So that’s what you do when you have a surplus. But what about when you have a shortfall? 

Well, there’s not enough money to do everything you need to do, so something’s going to have to go without. 

Let’s use an example and say that you’re $500 short, and what you decide to do is short-change your tax account, because you don’t need to pay tax for quite a while yet anyway.

So do that, but then it’s important that you make a note of that so that you can cover that shortfall next time. Otherwise, you end up in a feast and famine cycle.

So yes, there’s a short fall. It will happen from time to time.
That’s OK, make the best decision you can, take a note and then make it up next time.

This is how you smooth your cashflow and avoid the rollercoaster.

Now, once you’ve done all of that, it’s time to do the magic money shuffle.

STEP 5: This is the easy bit – time to do the magic money shuffle
Now that you’ve done all the work (in all of five minutes it took), you simply transfer that money.
You need to move that money around.

So transfer that tax money to your tax account, transfer that personal income to your personal account and transfer the surplus to wherever it needs to go to make up for any previous shortfall.

That’s it – you’re done! It’s that simple.

If you’re wondering how to calculate all these numbers, then grab yourself my handy income target calculator!

It comes with a bonus income distribution calculator to help you do all those things we just talked about and there’s even a handy video tutorial for you.

That’s today’s freebie which you can access here: www.miriamcastilla.com/calculator

It’s time to embrace your unlimited potential and you know what the next step is!

GET YOUR INCOME TARGET CALCULATOR

MORE BLOGS FOR YOU:

How to organise money – 5 Golden Rules (that make it multiply)

How to organise money – 5 Golden Rules (that make it multiply)

Do you know how to organise money?

Today I’m going to give you the 5 Golden Rules for organising your money and show you how to set up a money system that allows your money to grow and multiply.

Plus, today’s freebie is a really cool free new resource I’ve created to help you calculate how much money you actually need to bring into your business.

It also helps you work out how to distribute that income so your money really goes to work for you.

See, over the years, I’ve literally sat with hundreds of people who laid out their finances in front of me, and some were really proud of how they were taking care of their money.

And some were totally embarrassed about what they were doing with their money.
They honestly had no idea how to organise money – and were really clueless on what to do with it. 

But, to me, it didn’t really matter.

The only thing I cared about is how would I help them achieve what they were looking to achieve – how would I help them achieve their goals?

And, with a few tweaks and some financial education, I’m happy to report that pretty much all of them got there, which is pretty cool, right?

So today I’m going to lay it all out for you.

I’m going to share with you the 5 Golden Rules for managing your money so that it actually grows and multiplies.

Because think about it – for every single dollar that grows and multiplies on its own, that’s less dollars that YOU have to go work for.

So, are you ready? Let’s get into it!

 

WATCH THE VIDEO :

OR LISTEN TO THE AUDIO:

 

OR READ THE TRANSCRIPT:

GOLDEN RULE NUMBER 1:

Okay – the first Golden Rule for managing your money and setting up a money management system that actually allows your money to grow and multiply and that really works is to:

Base it on Reality.

So many people set up budgets and money systems based on nothing but theory They just hope to wing it.

The problem is that just doesn’t work. They have budget blowouts. There’s lots of things they’ve forgotten to allow for. And then they say, “Oh, my money system didn’t work.”

It’s only because they never based it on reality.

So before you set up your money system, look at what you’ve actually been spending, where the money is actually been going, and then use that information as the starting point for setting up your money management system.

GOLDEN RULE NUMBER 2:

Okay – the second Golden Rule for managing your money so it actually works is to:

Always Add Buffers

Buffers prevent blowouts.

Especially when you’re first getting started, you’re going to forget things.

There’s going to be unexpected expenses, blow outs, things you’ve forgotten about. And if you don’t allow buffers in your money system, then you’re going to say,” Oh, it doesn’t work.”

You know, “I blew the budget”.

But if you allow a really good, healthy buffer – especially in the beginning – then that allows you to keep learning, refining and improving your money system, and the buffer is there to absorb that, to allow for that. 

So always add buffers because buffers prevent blowouts.

GOLDEN RULE NUMBER 3:

The third Golden Rule for managing your money so it multiplies is to:

Use the Bucket System.

The bucket system is simply about dividing your money up by different purposes, into different buckets or pools of money.

It means that every dollar has a job to do.

Then you’re really clear on what’s money you NEED to spend versus money you WANT to spend and where it’s all located. 

It avoids confusion. It gives you clarity. And it also avoids vibrational wobbles.

GOLDEN RULE NUMBER 4:

The next Golden Rule for managing your money so it multiplies is to:

Make compound interest work for you, not against you.

Now, compound interest is an incredibly powerful effect that allows your money to kind of multiply and grow all on its own. Einstein actually called it the Eighth Wonder of the World.

When you’ve got investments, compound interest is working for you.

And when you’ve got debt, compound interest is working against you.

So you need to change and shift that equation from spiraling downwards into a debt spiral of compound interest and shift it to change upwards into an upward investment and wealth spiral of compound interest.

GOLDEN RULE NUMBER 5:

Now the fifth and final Golden Rule for managing your money so that it multiplies is to:

Know your magic number.

Now, before I explain what that is, I want to share a formula with you.

And this formula is the reason that most people don’t move forward financially. And what they basically do is they say: 

Income – Expenses = Savings.

What happens is they take their income, they take off all their expenses, pay all their bills, and then they try to save what’s left.

Now, what do you think happens?

Correct! Not usually a hell of a lot left!

So all you need to do to change things up and to change that into a formula that moves you forward financially and helps you multiply your money and your wealth is to switch it around a little bit and say:

Expenses + Savings + Income

So you need to get really clear on what your real expenses are.

Then you set a target for the savings that you need for growing your wealth. 

And that helps you decide what your income needs to be. 

And that is your magic number.

Then you now know what that magic number is. You know that level of income is going to help you move forward financially.

That magic number that’s going to help you pay all the bills and achieve your financial goals.

So that 5th golden rule is really, really key.

If you’d like to calculate your magic number, then make sure you grab my free Income Target Calculator. The link is below.

This calculator will help you work out how much you need to bring in to ensure all your bills are being paid and that you’re moving forward to reach your goals. 

With that calculator, you also get a bonus calculator to help you distribute your income as it comes in and ensure it’s going to all the right buckets.

It’s perfect for people with fluctuating incomes and you even get a handy video tutorial to go with it!

If you have any questions at all please just type them in the comments for me below. 

It’s time for you to embrace your unlimited potential and guess what? 

You are absolutely ready to take that next step.

Have an awesome day. Bye for now.

xx

GET YOUR INCOME TARGET CALCULATOR

MORE BLOGS FOR YOU:

How to manage money wisely – so you attract more.

How to manage money wisely – so you attract more.

Did anyone ever teach you how to manage money wisely when you were growing up? 

And I mean, someone showing you how to manage your money so it actually goes to work for you. 

So it grows and multiplies.

Knowing how to manage money wisely is the key to developing money confidence – and that is what helps you attract plenty more!

So today, I’m going to share my top 3 tips to help you manage your money wisely – that also make you magnetic to more.

 

WATCH THE VIDEO :

 

OR LISTEN TO THE AUDIO:

 

OR READ THE TRANSCRIPT:

In my 13 years operating my finance business, I dealt with people from all walks of life and on all different levels of income.

And there was one really, really important thing I noticed. 

And that is that more money & more income did not change their money patterns one little bit!

People who were in the habit of spending every dollar would do that, whether they were on a 5-figure income or on a multiple 6-figure income.

They would do that when they had lump sums of money and inheritances come in – and when they didn’t.

On the other hand, people who were in the habit of always putting some money aside, they did it regardless of what income and bonus money came in.

This is a super important point to note:

More money does NOT change the pattern!

So the real work is to ensure your money patterns and habits are healthy ones that support you financially – that move you forward and help you reach and achieve your goals.

For most people, nobody showed us how to take care of our money. Personal money management isn’t taught in schools. And most of our parents have no idea either. They’re just winging it and making it up as they go along.

And so what that means is that we don’t have the confidence around money that comes from knowing that you’re on the right path.

And that creates MASSIVE vibrational wobbles. 

It creates a lack of certainty, fear and vibration of worry within you. And that is not at all conducive to attracting plenty more because when you’re worried that you won’t know what to do with your money when it comes – and you’re beating yourself up for having done all the wrong things in the past – that creates a vibrational block that doesn’t allow more to flow.

Plus, we’re passed down generational patterns and fears around money from our parents.

You know, all those silly things people say like, Oh, money, doesn’t grow on trees –  Who do you think I am, Rockefeller? or, I’m not made of money, you know!

My parents said those things too. They program us with those sayings, with those systemic belief systems. And so they’re passed down through the generations. 

We see our parents struggle – we see their money issues and all of that is passed down.

So if we want to break the cycle and break the pattern, we need to do it consciously.

We need to break the cycle and start by actually educating ourselves on how to take care of our money properly.

You need to learn how to manage money wisely.

Because once you build money confidence, and you get a money management system in place that actually works for you – one you’re really excited about because it’s helping you move forward and achieve your goals  – that makes you magnetic.

It gets you excited about bringing money into your life because you’ve got the system all set up to put it to work for you – and to help it grow and multiply  – so that you can keep moving forward in leaps and bounds. 

So the key to becoming more magnetic to money and breaking down a lot of the money blocks and the barriers, is to get confident about managing your money. You need to sit down and do the practical work and set up a money system that really works.

I’d love to know. Did anyone teach you how to manage money as you were growing up? And I’d love you to share with me in the comments what the best piece of money advice you’ve ever received is. 

Okay. It’s time for those top 3 tips to help you manage your money wisely so you become magnetic to more.

Are you ready? 

Tip #1: Make compound interest work for you, not against you. 

So compound interest was called the 8th wonder of the world by none other than Albert Einstein, because it has an incredibly powerful effect.

Compound interest is when you have interest earning interest and then the interest on the interest is earning interest. And then the interest on the interest on the interest is earning interest… and so on.

I have a term for that. I call it ‘Making money babies’, because it’s like a family tree. You start out with a few dollars and when you let that effect of compound interest build and grow, it’s like a family tree sprouting, growing and expanding.

So this is where your money is working for you to make more money. Pretty cool, huh?

See, there are two ways to make money, people working and money working. And that’s what compound interest is all about. 

So you want to make it work for you, not against you.

You probably have things like credit cards and other debts that have interest attached to them. If you’re not getting on top of that, then compound interest is working against you. You’re literally making debt babies (gah!!!).

So you need to turn the tide and get on top of that and switch that focus around to making compound interest work for you. You do that by investing in things that grow – things like shares and property – anything that has a return on your money that you can reinvest to get a return on the return.

That effect is really, really powerful. 

So tip number 1: Start thinking about compound interest and focus on turning the tide from having it working against you to having it working for you.

Tip #2: Give every dollar a job to do. 

Most people throw all their money into one big bucket.

Then they pay the bills… and oops, the kids need school shoes… and let’s get some groceries… let’s go out for dinner tonight… oh there’s another bill to pay.

And they don’t know what’s what. And so when it gets to the end of the month, they start to look at that pot of money and think, “Ooh, it’s not going to be enough!”

The problem is that you haven’t given those dollars their individual jobs to do. You’ve just thrown them all in there and started randomly pick at them, hoping that there’ll be enough money to cover everything.

When you give every dollar a job to do, assign different jobs to different pools of money and you give them their own workspace, which means you separate them.

And then you know that THIS is my fun money. This is the money for us to go out for dinner, to have a massage, for that new pair of earrings etc.

And THIS is the money whose job it is to pay the regular household bills.

And then THIS is the money whose job it is to work on that compound interest equation and turn the tide from having it working against me, to having it working for me. 

So every dollar gets a job to do and a place to do it. 

And that gives you peace of mind, knowing that you’re not robbing Peter to pay Paul. You don’t have to worry that at the end of the month, you’re suddenly going to be left short when a bill comes in.

So every dollar gets a job to do. That’s the very important tip number 2.

Tip #3: Always have ONE current financial priority.

At any stage in life, you should know what your number one financial priority is. And you should put as much focus on it as possible. 

This priority will be different for different people at different stages in life. It usually revolves around that wealth creation pool of money, where the compound interest equation is being swung from one side to the other.

So for example, you might be at a stage where your number one financial priority is to get rid of that credit card. So you want to focus on that and be really clear on that being your priority.
All spare money goes towards that.

This ensures you’re not spraying your spare money around, putting a little bit here and a little bit there –  because that gets you nowhere fast. When you know that your number one financial priority, every spare dollar goes there.

And guess what that creates? It creates focus. It creates momentum. It makes Law of Attraction kick in and send you even more money to put towards paying that one thing off or building that investment portfolio or your wealth buffer – whichever is your priority.

It allows you to attract more money towards that focus because it gets you excited about every dollar that comes in that you can put towards that priority.

The momentum builds, the energy builds, the excitement builds and Law of Attraction, and the Universe will keep sending you more and more money, which allows it to happen even faster.

That is how you quickly turn the tide from having compound interest working against you to having it working for you. 

So that is tip number 3. Always have one financial priority at a time and be crystal clear on what it is. 

There you have it. 

Those are my top three tips for managing your money wisely, so you become magnetic to more. 

Now don’t go just yet, because I want you to keep an eye out for a future video, where I will share  my five golden rules for setting up your money management system so it actually works for you (and so you actually use it)

In the meantime, be sure to jump on my free masterclass. The link is below.

In that masterclass, I show you how to completely transform your relationship with money and become magnetic to more.

Embracing your unlimited potential is all up to you, and it starts by taking confident control of your money. It’s a huge step on the journey.

Big hugs,

xx Miriam

Ready to go deeper?

DISCOVER THE SECRET CODE TO UNLOCKING YOUR 6-FIGURE INCOME

How to attract more consistently so you can feel confident & in control of your finances

The Secret Code to Unlocking Your 6-Figure Income - PLAIN HEADER

MORE BLOGS FOR YOU:

Magnetic Monday Live Manifesting Q&A | Your money questions answered

Magnetic Monday Live Manifesting Q&A | Your money questions answered

It’s time for another Magnetic Monday call!

This is a live manifesting Q&A, where you can get answers to all your money questions – including how to change your money mindset, how to attract and manifest more money PLUS personal finance tips to help you gain money confidence so you never worry about money again.

To get an invite for the next Magnetic Monday Q&A so you can join us live and get answers to YOUR biggest money questions, just register at: www.miriamcastilla.com/magneticmonday

It’s completely free!

Here’s a summary of this episode so you can jump straight to the bit that resonates with you – or grab a cuppa and watch the lot!

SHOW NOTES:

6min – I struggle with the spending part, mostly. So my question is, does that kind of block the flow of the abundance through me? 

18min – How do you manage the transition of your own mindset with your nearest and dearest who are not in a positive mindset? 

26min – You say “Every dollar needs a job to do” and I’m having trouble finding jobs for all my money 

36min –  I worry there won’t be enough money in ‘old age’

41min – My money is a mess! I’ve been trying to give it jobs, but I don’t know enough about investing and compound interest

 

WATCH THE VIDEO :

OR LISTEN TO THE AUDIO:

 

OR READ THE TRANSCRIPT:

Here are some highlights from the call:


Rene said:
“One habit around money I would like to change is being worried there’s not enough in old age.”

As we do get a little bit older and start realising that life is not infinite in this 3D reality that we’re in, we do start thinking about that stuff. 

If that’s something that’s really bugging you, then I would recommend:

1. Look at the story

Look at what your parents modelled for you. Is that a story that you picked up because it’s what your parents either told you or what actually happened to them? 

And just because it happened to them – or it’s what they bought into – doesn’t mean it has to be your story. 

We do the hypnotic story process in Magnetic Money, and that is a huge part of it:
Realizing that it’s just a story – most of the time it’s not even your story – and that you don’t have to keep believing it. You can start telling a new story. 

That disconnects the emotional hook. 

So looking at where that story comes from that you’re not going to be okay in old age is a very important step.


2. Make a plan

On a really practical level, have a plan.

When you have a plan, you don’t have to worry so much anymore. 

In Australia, we have a great book called The Barefoot Investor. The author Scott Pape talks about this myth that you need a million dollars in the bank to retire comfortably. 

And it’s just not true. 

We have the age pension, and you’re still allowed to work part-time. And who wouldn’t want to work a couple of days a week and do something that gets them out and engages them in the community? 

He breaks it all down and shows us that we don’t actually need a million dollars in the bank! We on;y need a fraction of that!

Most people live in a state of fear trying to figure out where they’re going to find a million dollars cash and a freehold house to retire with, so it’s about 1 – shifting the mindset and 2 – actually having a clear and educated plan. 

So number one – what’s the story you’re telling yourself? And why do you think that that’s got to be your story? 

And then marrying the magical with the practical, and putting a plan together, asking yourself what your retirement plan is, what your finances are looking like, and then what needs to be a priority.

Give every dollar a job to do and look at what your number one priority is right now.


It might be: 

  • Paying off credit card debt 
  • Paying off your home loan
  • Starting to put more money away into your superannuation
  • Starting to put some money away for investing

Knowing what that wealth creation plan is, which stage you’re at, and actually knowing that you’re underway, that really settles all those fears and nerves.

That’s why to me, doing the practical side of money and not having it go hand in hand with the energetic and the mindset stuff is madness. 

And the same goes with the energetic and the mindset stuff. 

That’s all very well, but if you don’t walk the talk, then you’re still just hoping for the best. And at worst, you’re repressing all your fears and pretending everything’s okay because you’re not willing to step up to the plate and actually take care of your money. 

When you do take care of your money and you put that plan in place, then you can relax and spend a certain amount of money on yourself without worrying – because you know you’ve earned enough and that money is earmarked for having fun. And all the other stuff that your money needs to do is all being taken care of as well because every dollar has a job to do.

Some of those dollars have the job of helping you to achieve financial stability and financial freedom, and some of those dollars have the job of helping you take of yourself, feel great about yourself and enjoy life along the way. 

And that helps to raise your vibration, keep shifting your mindset around how abundant life is, and then allows MORE money to flow, which means there’s going to be even more dollars available to grow your wealth. 

And it builds and builds and builds.


NEXT:

Kim asked:
“I give my money jobs to do – all the bills are paid and I started a business so that I could have that, but I don’t know what to do with the leftover. There’s not a lot leftover, but enough that I know I should be doing something with it. I don’t know what to do with it.”

In Magnetic Money, we set up a ‘bucket system’ where there are different buckets of money that serve separate purposes.

There is one bucket that pays the bills.

Another bucket is your fun bucket and discretionary spending (ie. groceries).

Then there’s the wealth creation bucket. 

(Forget about the word ‘compound’ for a moment if it confuses you.) 

The wealth creation bucket is everything that has interest attached to it.

Things that charge you interest could be:

  • Credit card
  • Mortgage 
  • Car loan

But then on the flip side, there are things that you earn interest on such as investments and term deposits.

So that wealth creation bucket is everything that has interest involved.

What compound interest means is (and it doesn’t really work like this but it keeps the numbers simple): If you have a credit card owing $1,000, and you’re charged 20% interest per annum, in a year you’re charged $200 interest. If you don’t pay that down, then you’re going to be charged interest on that $200 as well as the $1,000 that you already owe.

So if you don’t pay that down, you’re going to be charged interest on the interest and so on.

And that’s what compound interest is – it’s the interest making more debt babies.

It’s like this family tree that’s working against you.

What we want to do is make sure that some of your money is being pointed at that bucket.

This is a really great job to give some of your money, as it reduces that debt effect as quickly as possible, and tips the scales into starting to grow your wealth.

That’s a super quick lesson on how we do it.

Want to join me LIVE for the next call?

I’d love to help you master your money and your mindset so you never feel like you need to worry about money again.

Just register here to receive your Magnetic Monday invitation: www.miriamcastilla.com/magneticmonday

Magnetic Monday image

MORE BLOGS FOR YOU:

My top hack for eliminating debt – that’s super fast!

My top hack for eliminating debt – that’s super fast!

Today I’m going to share with you my number one hack for eliminating debt.

You’ll want to stick around for this one.

 

WATCH THE VIDEO :

LISTEN TO THE AUDIO:

 

READ THE TRANSCRIPT:

I’m going to use a four-letter word… debt. 

Nobody likes that one. 

We’ve all got it – most of us anyway – and we don’t like it, we want to get rid of that thing. 

Energetically, the more you try to get rid of something, the more you actually give it power, the more you reinforce it.

What you resist, persists. 

So you want to be careful. What you want to do is actually turn that around by implementing the really practical things that I’m about to share with you. 

Turn that around and actually change the energy.

Right now, your energy is probably one of ‘I don’t want any more debt!’ which actually just keeps more debt coming at you.

Rember: What you resist persists and where attention goes energy flows. And everything is energy. 

We want to turn that energy around to ‘Every day, I’m eliminating debt. Every day my debt is shrinking. It’s shrinking faster and faster!’, which is a completely different vibration. 

That’s what we want. 

So how do you do that? 

OK, let me share my number one tip for eliminating debt with you: 

Most people, when they have multiple credit cards, car loans, etc., they just make the minimum payments on everything. Sometimes they pay a bit more here and there, but generally, they’re just making the regular payments and trying to get on top of things. 

What you want to do is this: Get a piece of paper and list all of your debts. List what you owe, what the minimum monthly payment is (or weekly if that’s how you operate), and list the interest rate if you can. 

Now from a pure finance advisory perspective – which by the way, I’m not giving you financial advice here – and from a number-crunching perspective, you would usually work on the one that has the highest interest rate first because it’s costing you the most.

But having said that, everything is energy. 

If there’s one that bothers you a whole lot more than the others, or if you’re really overwhelmed by the feeling of debt, and just getting rid of one little thing would help, then go for another one. 

Sometimes it actually helps to get rid of the one that you owe the least on because you can do that quickly.

So choose one. 

If you’re feeling okay, then definitely go with the one on the highest interest rate and watch that debt shrink into oblivion. 

Here’s how you do it: 

✔️ Find a little bit of extra money somewhere. 

You can look at things like whether you have magazine subscriptions that you don’t utilise, whether you subscribe to Spotify but in reality, it’s no big deal if there’s an odd ad. Or perhaps you spend a little bit more than you really need to on going out and grabbing a cup of coffee or lunch.

Just figure out if there’s something that isn’t necessary that you can save money on.

Ideally, that’s the best way to do it. 

✔️ Then put that money towards that debt.

Think of this as REPLACING expenses. Swapping something not very useful with something that’s very useful and is going to help you a lot. 

Put that amount of money – let’s say it’s $50 a week saved from removing unnecessary expenses – towards the debt you’ve decided on and keep doing that. 

✔️ Keep paying all the other ones at their minimum payments and just focus on THE one. 

Just focus on eliminating debt – but focus on ONE at a time.

✔️ When that one’s all paid off, do a little happy dance. Give yourself a treat that you’ve decided on in advance. 

Ideally, your reward should cost about the same as one of those debt payments.

So if you were making a payment of $200 and have now paid off that debt, then put one of those payments towards a special little reward for yourself.

✔️ Then after that, don’t just absorb that money and re-subscribe to the magazines and everything else. Use that extra money you’ve just freed up and choose the next debt to eliminate!

I call this tipping the buckets. 

You just want to then choose the next debt to eliminate. You’ve got that whole $200 now extra to put towards the next one. 

So again, choose it depending on what works best for you.

Pay off all of it. 

✔️ When you get that one completely gone, do the same thing. 

Treat yourself, celebrate, and then take the whole payment (so what you had on the very first one plus what you were paying on the second one, which you then stacked up) and then pay all of that towards the next one. 

What will actually happen is that it’s going to gather momentum really, really quickly. 

The first one will be the slowest. The second one goes faster, and from there, it just goes bang, bang, bang, the dominoes will drop. 

It’s a really cool technique. 

Celebrate, do lots of happy dances and really celebrate every time you eliminate a debt.

Remember: All is energy. All is vibration. You want to do the dance of abundance. 

And that is it.

See how simple eliminating debt can be – and how quickly it can happen once you get started & focus?

Let me know in the comments below if you’ve ever tried this & how it went!

READY TO GO DEEPER? TAKE THE MONEY QUIZ!

Discover your Money Habit Archetype and use it to clear your biggest money block.

MORE BLOGS FOR YOU:

086_ways to save money image
083_Magnetic to money image

The easiest way to save money – even when money feels tight
Click here: https://miriamcastilla.com/086

Become more magnetic to money with this practical tip
Click here: miriamcastilla.com/083