Over the 12 years in working with clients, I've observed a lot of money mistakes so I thought that I would outline 5 of the most common mistakes I see that can cause a family to go into debt.

1. No sinking funds:

If you are new to my world, then this might be a new concept for you.  Creating a monthly expense for a known one time expense in the future -- eg. saving monthly for Christmas presents.

I have over 19 sinking funds set up that range in value from $7 (yearly Costco membership) to much larger expenses like $550 (property taxes).  Some of these include a house and car maintenance fund, as well as birthdays for my husband and kids and their sports and activities.  By creating these "funds" and saving the money, allows me so much flexibility when an item pops up out of nowhere....like needing $2300 of repairs to my paid off, no warranty left car.  Which leads me to my next debt trap...

2. No emergency fund:

Not having an emergency fund can almost...

Yes, I'm going there.  I know, I know, you are already annoyed that I'm talking about Christmas when summer is in full swing, but here's why I want you take a second and pause.

How are you going to pay for Christmas?

Read that again. 

How are you paying for it?  Is it cash or credit?  Is this going to be another year that goes by without having your $hit together and go further into debt?

There is a better way...and its simple...and it can start RIGHT NOW!

Take how much you plan on spending on Christmas and divide it by 6.  Why 6?  Well that's how many months you have to save.  So if you normally spend $1000 at Christmas, that means that from July - Dec you need to save $167/month.   If you get paid twice a month, then divide that monthly number by 2 and set aside $83.50/pay.

Don't have $167/month to put aside for Christmas?  Well then this next sentence might hurt but its something I need to say.  If you can't afford the $167/m...

Whenever you start on a journey to get out of debt, one of the hardest aspects is staying motivated to stick to your plan.

If your plan works on paper, but not in practice, it's not serving you very well and it's time to look at making a change.

But instead of throwing up your hands and saying "this doesn't work", try this instead - define your family's financial goals and create a vision to go with it.

Think of this as your WHY statement.  And I'm not talking about "I want to be debt free or I want to be a millionaire".  I'm thinking more along the lines of....imagine you were already there...you were a millionaire heck even a cagillionaire (with obviously no debt because come on...you're a cagillionaire! LOL), what do you see?  What do you envision?

So let's break this down.

Imagine you envision yearly vacations with your family.  Paid in cash.  I'm talking the bougie kind --- amazing 3 course meals, beachy warm weather, wine and strawberries in your room...

I used to subscribe to this mentally until I began working with clients finances 12 years ago and realized how dangerous this saying could be.

"Don't worry, it's Good Debt" I remember hearing as my student loans piled up.

"But your car is a good debt" the car salesman told me as I naively entered into a 7 yr balloon loan.

"Your interest rate is low, and besides, a mortgage is a good debt" I heard as I signed my life away for 25 yrs.

I'm sure we can all agree that a $15,000 student loan debt is 'better' than a $15,000 credit card debt -- but that doesn't make your student loan debt "GOOD".  Stay with me here...

A debt is a debt.  You owe someone money at an interest rate.  When you start categorizing debt as good or bad, it becomes a slippery slope of justification -- and that can wind you in a ton of problems.

Is your student loan debt good if you don't wind up practicing in your field of study -- perhaps landing a job that didn't even require a degree? 

What...

There are three common debt repayment strategies that we look at to efficiently address your debt situation.  The first step is to figure out how much debt you have (yes, I want you to total it up!) and how much it's costing you.  In order to figure out how much its costing you, you need to list the interest rate and minimum payment associated with each debt.   I usually exclude a mortgage when doing this, and focus on credit card debt, pay day loans, car loans, personal lines of credit, etc.

That's the starting point.  Now the fun begins, in choosing which debt repayment strategy most aligns with your money mindset and your human behaviour.

1. Debt Avalanche

This strategy focuses on paying the minimum balances on all debt and focusing your attention and extra dollars on the debt with the highest interest rate first.  This is the cheapest way to get rid of your debt, since you are paying off the highest costing debt first.  The challenge with this...

I know, I know, it seems so strange to have a financial planner that specializes in debt repayment and cash flow tell you to ditch your budget, but that's EXACTLY what I want you to do!

WHY? Because your budget doesn't work.  And here's why:

1) If you aren't seeing your debt go down and on track to be eliminated in 3 yrs; your budget doesn't work.

2) If you find yourself unable to stick to your budget and continue to overspend; your budget doesn't work.

3) If you find yourself unable to enjoy your hard earned dollar with a massage, latte, or manicure because your budget is too lean; your budget doesn't work.

4) If you find you don't have enough money leftover to put in insurance, save for the future or invest; your budget doesn't work.

So what can you do?

You need a CASH FLOW plan!  Here are the major differences between a budget and cash flow plan:

1) You are able to enjoy your hard earned dollars and still doing the things that bring you joy, because your Cash Flow...

I get this question ALL. THE. TIME.  Do I use my savings to pay off debt or keep it in savings?

Truthfully, this answer is going to suck for most of you -- the answer: it depends.

I know, such a crappy answer lol.  But here is why:

I believe you should have $1000 in an emergency fund that is not easy to get at.  What I mean by that, is that it's in an account where you don't have debit card access.  It requires some movement of funds to get access to it.  Simply put, it's to be used for EMERGENCIES only so you don't need 24/7 access to this money.

Once this is saved, then my philosophy is to make sure you have protected your assets, income and health using lower cost insurance options AND then use the leftover money to put towards debt.

Now you can see why I said "it depends"?!  It depends if you have an emergency fund set up and have taken care of insurance needs.

If these two areas are covered and you have debt, then absolutely, you should be putting...

When speaking with my clients since COVID19 began, I've noticed that some of them are absolutely thriving financially during this time.  Their income has not been interrupted and their expenses have been cut, and they are reaping the rewards in terms of saving more.  

One of the conversations I've been having with them, is how to sustain some of the savings they have been seeing once things begin to open up again.  It's not enough to just say "oh I'll never do...(x)...again", a plan is needed to be able to address your 'new normal' cash flow!

I did a live video where I talk in depth about this in my private Facebook community group for women, but here are my top 5 tips to thrive financially after COVID19:

1) Compare pre-COVID19 cash flow to during COVID19 cash flow:

Review April and May spending and compare to January and February spending, which for most of us was before COVID19 locked most of us down.  Print off your bank and credit card...

There are numerous philosophies when it comes to financial planning, so aligning yourself with a professional whose philosophy is in sync with your financial goals and dreams is paramount.  There is no cookie cutter approach to a financial plan - each plan can look completely different, yet can get you to your desired outcome.

In my opinion, there are 5 pillars to address for a solid financial plan.  Here are the 5 key area's I look at:

1. Cash Flow

This is the first foundational area, or pillar, I address with my clients.  If you don't have the money to invest in your financial plan, we will both end up frustrated wanting something we can't have.  I look at this area in depth and create a customized cash flow plan for my clients, address their current spending and saving money mindsets, clean up money leaks and cash flow inefficiencies...and on average, wind up finding them hundreds of dollars each month to now be able to afford that plan! ...

I never EVER EVER thought I would have a blog...but here we are!

If you are someone looking for guidance on your financial health, then you have come to the right place!  With over 17 yrs experience in the financial services industry, I'm bringing my years of knowledge to you and hopefully filling a gap that I believe exists.

What gap am I talking about?

The gap between wanting to implement a solid financial plan that includes protecting your assets today and investing for the future, and being able to afford that financial plan!

You know that old saying - "cash is King"?  It holds so true in my industry.  If the cash flow isn't there to implement your financial plan, there really isn't much you can do.  

Or is there?

That's where I come in...and fill that gap.  See where I'm going??? :)

I address your cash flow FIRST, so that when I'm ready to show you a beautifully curated financial plan that incorporates all of your goals and dreams, you can actually...