Today was bill-paying day for me. This is the eighth month of my “new” approach to money. For years, I juggled credit card and student loan debt. It’s only now that I have a full-time job and a supportive spouse that I’m able to manage my finances more responsibly.
When I logged into my online banking this morning, I knew that I would face some charges on my credit card. I used it while traveling and during the last week of October. I’ll pay off the full balance when I get reimbursed for the trip. This morning, I wanted to sort out all the charges I need to pay for with my money so that all that sits on the card is reimbursable.
With a little trepidation, I clicked on the details for my credit card. For years, literally, I was always shocked by that pesky statement. No mater how responsible I had been, the balance ALWAYS was higher than I thought it should be. Today, the balance actually looked lower than I had feared. As I wrote down each charge, I was happy to note that I had accounted for it in my budget. I sent $309 off to cover my charges and still was able to “snowflake” another $344 to my emergency fund. Whew!
It is so nice to feel like I finally have my spending under control. After my little shopping spree last week, I’m actually contemplating how much money I can save this month. I don’t feel the need to buy anything today. Now, that’s a good feeling!
Driving to work, I realized once again how “unreal” using a credit card used to be to me. The main problem was that I treated the account limit as an extra stream of income. I used to plunk down that card for all kinds of little treats: coffee, books, shoes, craft supplies, dinners out. I always thought I “needed” whatever I was buying. Each time, I think, “well, I’ll pay for this. . .when my loan comes” or “when I get my first paycheck” or “when I get my tax refund” or “when I get paid next month.” Whatever the individual reason, the central theme was: “I’ll pay for this. . .later.”
The only problem with that little line of thinking is that “later” doesn’t always turn out as you plan. You might not get as much money as you thought you would or it might take longer to arrive. Even worse, when I didn’t account for every purchase in my budget, I’d re-spend what ever money I thought was coming in. If I was supposed to get $100, I’d think “I’ll buy this jacket and pay for it with that $100.” Then, a few days later, I’d forget about the jacked and think “I’ll finance this trip to Borders with that $100.” Then, when friends invited me out to dinner the next week, I’d think “oh yeah, I’ve got that $100 coming.” Pretty soon, I’d spent $300 and STILL didn’t have that $100 in the bank.
This time, when I was using the credit card, I accounted for it in my budget. . .the real money. There were no unexpected charges on the card, and I didn’t spend extra thinking, “I’ll get that trip money” or “I’ve got extra coming for my stipend.” Instead, that extra money went to the emergency fund.
It’s been a huge shift in thinking for me, and I’m happy that I haven’t slid back into my old ways. The more mindful I’ve become about spending, the easier it’s getting to save. Our emergency fund is now at $3284, over halfway to my goal. It’s a good thing because I noticed that my front brakes are squeaking. :(
I may have to tap into the emergency fund this month, but it’s nice that it’s there. Rather than overspending and then having to charge car repairs on top of that, I can walk into the auto shop knowing I’ve got a cushion to pay for repairs. It’s so different to have a “I’ll save for this now” mindset rather than a “I’ll pay for this later” brain!
How about you? How has your attitude toward spending and saving changed?
4 responses so far ↓
1 Andy @ Retire at 40 // Oct 31, 2008 at 9:26 pm
My attitude has changed a lot recently. I definitely buy less stuff (my ‘wants’) and my ‘needs’ spending has also been cut. I still use my credit card a lot since I get rewards but I always use it wisely and pay it off in full every month.
The most interesting thing for me though is how my attitude to other areas of my life have also changed. For example, those people with more time are the ones I consider rich, irrelevant of actual money.
2 Caroline // Nov 3, 2008 at 9:20 am
Interesting post, as always! I’m dying to know though, how on earth do you have $344 in snowflakes? Once I sold the half dozen dvd’s that I own, several books and a few clothing items I ran out of ideas for snowflaking. Maybe the answer is that I didn’t have much excess “stuff” to begin with, I don’t know.
3 Sarah H. // Nov 3, 2008 at 10:19 am
Good for you! What a great feeling to look at your bill and find that it is lower than you feared. Your plan about budgeting ‘real’ money sounds like a great solution…you illustrated well how easily we can spiral out of control when we don’t account for purchases in our budget and begin to spend the same ‘extra’ money twice. Thanks for the inspiration!
4 mydailydollars // Nov 5, 2008 at 9:27 am
Thanks! @ Caroline, the snowflakes are higher these days thanks to a little extra stipend I’m earning at work. That doesn’t count as part of the regular budget, so it goes straight to savings. I also earn money doing surveys and save money in different budget categories.
Leave a Comment