Digging out of debt: Tips on how to get your personal finances on track

Jan. 29--Anita Jackson came to Victoria with only two pairs of jeans and a robe the day before Hurricane Katrina hit New Orleans, her hometown.

She headed toward Austin but got lost and ended up in Victoria. After losing everything, with the help of a financial class at Northside Baptist Church, she restarted her life and got back on her feet.

"To make a long story short, I stayed here. I felt like this is where I was supposed to be," said Jackson, 72. "As a result of making that decision along with the Lord's approval, I ended up at Northside Baptist Church, where they offered Financial Peace in 2006."

Structuring one's budget, saving and investing is important for a person's financial wellness and overall wellbeing, business officials said.

Jackson had debt from living, debt from Hurricane Katrina and loss of her home and job. With the help of the community and Workforce Solutions Golden Crescent, she found her first job about a month after she arrived at Citizens HealthPlex, where she's been for 13 years.

Along with her primary job, she ran a home care business from 2006 until 2010 and worked at Home Depot as a greeter from 2009 until 2016. She learned from the Dave Ramsey Financial Peace University class that if she needed more income, she should work other part-time jobs, she said. In 2006, Jackson was able to buy a house that she sold in 2012.

"Regardless to how little money you have, you can pay your bills," she said. "You can call and make arrangements to pay something on the bill, and if you are willing to make arrangements on the account, then you can keep your credit in good standing."

Randy Snider, 69, taught Financial Peace for eight years at Northside Baptist Church, where Jackson was one of his students.

By identifying budget holes, a person can eliminate extra expenditures, Snider said.

"Look at your day and what you can stop doing," he said. "What has become a habit that you don't really have to do?"

The class teaches its students to prioritize their bills, with the four most important categories being food, clothing, housing and utilities, Snider said.

The class also teaches how to pay debts from the smallest to the largest, he said. By paying the smallest first, debt slowly goes away, and the spenders can feel the satisfaction of paying bills off to motivate them.

B.J. Nelson, who now teaches the class at the church, went through the class twice about a decade ago. She took the class twice because she felt like she failed the first time.

Nelson uses cash for her budget so she can physically see what she is spending. She also categorizes her money before spending based on how much she is going to spend. For example, she'll allocate a certain amount in cash for grocery shopping.

She also has an emergency fund for unplanned expenses.

"I learned I needed to change personally -- to change what you spend -- telling your money to go and not wondering where it went," she said.

The class also taught her how to work with her husband, Scott Nelson, on their finances. Since 2014, the couple have owned White Trash Services and use their financial knowledge to keep the business profitable.

"It's not an option. Everyone needs to learn finance. We all have bills to pay," she said. "You need to educate yourself and not stick your head in the sand."

When it comes to savings, there are different categories, including short-term, long-term and retirement, said Nathan Goldman, accounting assistant professor at the University of Texas-Dallas. When money is put into retirement, it is usually not missed because it comes out before taxes and before someone gets their take-home check.

"At the end, retirement does accumulate -- that money does add up," he said.

For short-term saving, such as saving for a vacation, a savings account is good to use so the money is accessible, Goldman said. For long-term saving for buying a vehicle or house, he recommends using a fidelity investment type account.

"If you had money invested in a (Standard and Poor's 500 Index) account in the last week, the money you had in there would be up 6 percent versus if you had it in cash, it wouldn't have made any money," he said.

A person's management of their personal finances is similar to operating a business, said Joe Humphreys, University of Houston-Victoria Small Business Development executive director.

"With business and personal finances, if you know where you are now and know where you want to go, the plan will take you there," he said.

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