I’ve said this frequently:
“I hate money.”
What I really mean is “I don’t understand how to effectively manage money.”
Over the past three decades of my life, I’ve made some notoriously poor decisions managing (or rather not managing) my finances. I’ve wracked up credit card debit. I took out a car loan on a new car that I was unable to pay after a few months.
The people in my life who saved money were mysterious super hero like creatures that possessed a skill I didn’t seem to have, although I envied and wanted it.
Last night, my friend Donna and I went out to dinner.
I confessed to her that I was in a deep financial hole at the moment. I was overdrawn a significant about of money in my back account. Before you go judging me, it’s not because I was compulsively spending money, it’s because my student loan lender decided to take out my payment four days early.
Donna and I discussed some of the reasons I’m always broke. The truth came out:
“How much do you go to the bakery?” She asked.
I was already embarrassed.
“Um, two to three times a week.” I confessed.
I’ve been buying muffins and coffee at this particular bakery two to three times a week. That’s five dollars a day x three days a week. That adds up to $60 a month. Now that’s only if I buy a coffee and a muffin for myself. If I factor in food for the kids it’s more like eight dollars a pop. So eight dollars x three times a week = $96 a month.
$96 a month could buy me a whole lot more than a handful of muffins and coffee. That could be one week’s worth of groceries.
This proved to me that the “little things” add up to a “big expenses.”
Donna and I agreed to work together and create a budget for me. I’m finally recognizing that managing my finances is a problem for me and I’m dealing with it.
Today, I walked into the bank and made a payment plan to pay off my overdrawn account. It was scary and nerve wracking but I did it.
I called all three of my credit card companies and found out what I owed them. It was terrifying but I did it.
I made a payment plan with one of those companies to pay off the money that I owe them.
I’m proud of myself for facing this demon of mine. I’ve hid for so long behind the reality that I have a hard time managing money. But now I’m being honest about it and I’m willing to learn to change my ways.
My goal is to:
1. Pay off debt
2. Save money
3. Improve my credit.
I know I can do this. The first step is acknowledging that my behavior needs to change, and I’ve done that.
Maybe cut up your credit cards? That way if you don’t have it, you can’t spend it. The best decision we ever made was to stop using credit cards.
That’s a good idea. But here’s the thing. Should I also cut up my debit cards?
I wouldn’t go suggesting this to everyone, but what really helped me out was using an AMEX. I wrecked my credit in college and worked very hard to rebuild it, thanks to Suze Orman. I have a deep fear of AMEX late fees and ruining my credit (again), so having to pay your bill in full at the end of the month keeps you out of deep debt, and keeps your credit score high. Also, paying yourself first has worked for me. Before I spend any money or pay any bills, I put a little aside in savings. I also just bought a dry erase calendar to keep in my home office to keep track of bill due dates! I hope you find what works for you!
These are great suggestions! Thanks P!
GREAT Goals. I have those same ones! Also I don’t know why my phone gave goals a capital but I am too lazy to change it lol
We’re going to get you on track girl! I stink at managing money too, but since I’ve acknowledged that money seems to flow out of my wallet like a deluge it’s been easier to set up ‘dams’ for myself. Like scheduling automatic payments for credit cards & savings before I even think about ‘fun’ money.
I’m proud of you for facing your personal finances even though it’s terrifying. It is terrifying, but it’s even scarier in the long run when you don’t have a handle on it. You took a really big step by creating that monthly budget and wrangling all of your credit card info. Keep it up! You’ll conquer the money demon one day 🙂
i haven’t had my own credit card in about 7 years. It’s debit, cash or bust because I can’t handle credit. Credit cards made me think I had money when I had NO MONEY! This was in the era of 0% APR’s and huge credit lines. I have a shared credit card with the hubz, but I have no idea where it is. I got myself into a deep hole as well, after being super duper responsible from about age 18 to 21 (the period where most younguns totally screw up). I had a big black cloud hanging over me for so long. It’s a real burden. The bright side is I still use all the stuff I bought on credit to furnish our old apt! And, yes, the little stuff definitely adds up! All the coffees and stuff. so, spacing those little purchases out a little more makes them feel more like treats and more special. Good luck!
Don’t cut up your debit card. You need that. Also, don’t cut up your credit cards in case of an emergency. What we do instead is put our credit cards in a ziploc bag (or tupperware) of water and then freeze it. That way, it takes hours to thaw and you can think to yourself, “Do I REALLY need to use these cards?” It really prevents impulse shopping. That all said, I used to spend WAY too much on eating out! Coffee, pastries, the little things. It seriously adds up!
That’s amazing! I want to do that!