By Samantha Holmes
When envisioning their goals, BAUCE women most likely picture a path that leads to success. This aspiration is absolutely achievable. However, even the most competent and confident women may face roadblocks and moments that initially feel like irreversible failures. Foreclosure, which entails the process of lenders taking and selling a property after a borrower fails to meet loan payments, is an example of such a destabilizing event. However, there are several steps to take in order to avoid setbacks such as foreclosures and repossessions. Octavia Conner, a bona fide BAUCE woman, navigated these challenges prior to starting a successful financial enterprise. Octavia serves as the founder and CEO of Say Yes to Profits, which provides business accounting services to clients. Octavia has garnered respect and recognition in her field. But she has faced challenges in the past such as the repossession of her vehicle and foreclosure on her home. Now, she is paying it forward and providing personal finance insight to others.
Recognize that Nobody is Immune to Financial Frustrations
Skipping this article may be tempting – few people want to think about experiencing such a stressful situation in terms of their money. But this mindset presents a clear danger: it provides a false comfort that only a certain type of person can encounter foreclosures and repossessions. When describing her own financial woes, Octavia cautions: “There is a misconception that it will never happen to you…But things can change just like that. Look at what happened during COVID. When I ventured into full-time entrepreneurship, I knew I would be a success. But I didn’t have savings or a plan. Thinking ‘it won’t happen to me’ can lead you to a path where it does happen.” Octavia worked as a CFO in corporate America before launching her own business and meeting financial hardships. When she was going through a difficult time, this BAUCE leader remained resilient and scrappy. In fact, Octavia worked as a customer service representative at Pizza Hut while she was rebuilding her financial foundation. Sometimes, dire situations require you to pursue a Plan B.
Don’t Ignore the Signs
The foreclosure process can be insidious. But it does not unfold overnight. One missed payment may not seem like a large deal. However, when an inability to pay your debts becomes the norm rather than the exception, that presents a serious issue. For Octavia, the process of foreclosure occurred in gradual increments. Octavia describes: “It started with ‘let’s make a payment arrangement for this bill this month’ and ‘let’s see if the mortgage company will let us skip this month’. Then one day, I remember going to Mcdonald’s and trying to buy my kids a happy meal. But my card was declined because another bill came out.” This is a difficult and saddening situation for anyone to go through. Therefore, being proactive with your financial wellness is better than being reactive.
Spend Mindfully and Embrace Savings
Establishing and adhering to a budget represent crucial ways to be proactive rather than reactive. There are concrete actions anyone can take in order to improve their financial health. For people who are just beginning this journey, Octavia advises: “First: start to live below your means. Stop trying to keep up with the Joneses. Cutting costs lets you save with ease…Take a step back and look at every way money is leaving or entering your business.” Getting to a good spot with your finances does not need to be a swift process. This is an opportunity to progress over time. According to Octavia, people seeking to save money can do the following: “The ultimate goal is to save a minimum of 20% of your paycheck. But, you have to crawl before you walk. Sometimes 20% can be a stretch. So, you can start at 7% at the very minimum. Once you’ve built that up then you move to 10%. After being consistent for 90 days, then you can bump that up to 15%.”
Bookkeeping is your Best Friend
This applies to both individuals and to businesses. According to Octavia, failure to keep track of revenues and expenses can be massively detrimental. Octavia muses: “How do you expect to grow your business if you don’t know your numbers? You need to have accounting records in order. Another huge mistake I see is not understanding your own business when it comes to its structure. If you have an extremely high tax bill, you probably have outgrown your business structure. If you are the bottleneck (you need to make all decisions and can’t take a vacation), then you are keeping yourself stuck at a level that you don’t want to be at.” Do yourself a favor and tenaciously track these key numbers.
Research the Terms of Your Loan
There are times when bookkeeping and conscious spending may still not be sufficient to make ends meet in your personal or professional life. In this circumstance, a loan could be a solution to your problems. Be careful – not all loans are created equally. Companies whose business models include lending can sometimes exhibit predatory behavior. This includes elevated annual percentage rates and harsh/inflexible rules when you need assistance paying back a loan. This may initially seem to be an appealing option because these loans typically have a faster application process. But this is a treacherous road to tread as higher interest leads to an increased likelihood of foreclosure and repossession. According to the United States Department of Justice, signs of predatory lending include high fees, persistent marketing, and minimal due diligence during the application process. Avoiding this type of financing is essential.
This is not a fun topic, BAUCEs. But it is an essential one that becomes more relevant each day. According to ATTOM, a real estate data firm, foreclosure filings in the United States increased by 57% from October 2021 to October 2022. But with research, preparation, and precaution, you can position yourself well financially.
If you are looking for additional resources, be sure to check out Say Yes to Profit’s YouTube channel.