So anyone who knows me well, or reads this blog relatively often knows about my love / hate relationship with money. I’ve made some super-fucktard, super-costly decisions for the last 6 years (800 dollars in unpaid NZ parking tickets, anyone?), as well as just really, REALLY liking to shop. And story of my 20s – didn’t think of down the road, and just put it on a credit card. Dumb, dumb, dumb.
I’ve dabbled in extreme budgeting before, but for the wrong reasons. I was never really that dedicated, or it was to impress someone else besides myself, and it didn’t stick. So about 6 weeks ago, after essentially hitting bottom, I sat down on my living room floor and decided something needed to change. I HAVE to stop this and crack down. I am so tired of being a slave to my debt and living paycheck to paycheck. I have grown tired of having goals in life that I’ll never do since I haven’t seen myself having the money to do it. Never being able to travel, not being able to move, not being able to invest, or take a job in another city. As I know it, my debt has become a total hindrance to me actually living my life.
Now granted, I’m not some silly twat who just racked up $40k in shopping, nor do I hit the slots, NOR do I have any sort of upside down situation. I’ve got a manageable amount of debt (about $5k), as well as a not-too-terrifying student loan (under $20k), which is why I’m just like, what in the actual hell Laura. Pay this shit OFF already.
So: I’m putting myself on a spending diet.
I stumbled onto this site about 6 weeks ago, and after reading it for about 2 hours, I determined it was totally a manageable plan for someone like me. This chick seems a lot like myself, and is the first to admit it’s gonna suck. But she also gives tips on how to make spend-thrift life suck less, on what to consider a “want”, how to manage a social life, etc etc.
So what does this mean? Needs-based purchasing only + set budget, essentially.
How long? As long as it takes to get my credit card debt paid off, and to meet my personal savings goal. My student loan is a more long term goal, but I’m hoping this time of financial diligence and conservation will help it to become more of a natural mindset.
First order of business: making a list of my needs. I laid out everything I spent money on each month – everything – and decided what was realistically what I couldn’t live without. Rent, Insurance, Food, Car, Medicine, etc. I have budgeted a set amount for each flexible needed cost that I’ll work with. I didn’t want to be totally miserable, so things like the washer/dryer stayed (laundromats? and in winter? NO), but things like Netflix? Nope. Anything considered a want, and not a need, is canceled.
Next up: I’m figuring out where on my NEEDS List costs can be reduced. Already, I’ve sat down with my insurance company to renegotiate, I’ve signed up for more basic (and $15 p/m cheaper) internet, and I’ve found ways to reduce my grocery bill. I don’t have plans to turn on my heater until it hits a certain mark on the thermometer, and will only keep it at 68. So yes, I plan on budgeting for Dura-logs for my fireplace and wearing sweaters inside. A cold stingey nerd, if you will.
I’ve also called up each one of my credit card companies and renegotiated. Let me tell you one tip: if you threaten to cancel your card (my original intention), credit card companies suddenly become your best friend. For one company, I told them I was canceling because I had determined that most of my monthly minimum was being absorbed by fees, and by the time I got off the phone, they had taken off several months of fees, which took off over 300 damn dollars off my bill. I also managed to renegotiate the APR on 3 of 4 of my credit cards to a much lower rate.
Then: stop spending money! Yes, I will need to learn how to say “no”. To myself, to others. Of course, since I don’t plan on becoming a scroogey hermit, I’ll budget monthly for a social life and things that pop up (here’s how she recommends doing it). The non-needs budget will be between 100 and 200 – the amount isn’t firm just yet.
And of course: debt-snowball the SHIT out of my credit cards. (what that is)
Also: find ways to increase income. This isn’t an absolute MUST, but it would help. I’d like to increase my freelance (no more pay-in-trade) and perhaps take on another job.
I will be creating a page that details what I consider needs, wants, my budget, and my debt-payoff progress. It’s really for the sake of my own tracking and accountability 🙂
So, we’ll see how we (continue to) go. I’ve actually done pretty well and I just need to keep up the motivation. I’ll likely be posting about this 2-3x a month… my apologies in advance if this topic gets tiresome.
On a related note: