by Hope
I am very smart and educated. I’m not saying that to brag, it’s just a fact. I have plenty of things that I am terrible at too and I will readily admit them as well. But back to my being smart and educated.
My parents taught me from a very young age to manage my money – 10% to savings, 10% giving and the rest for me was a weekly mantra from the time I was old enough to get an allowance. And they lived frugally, so frugally, it was painful even for me as I always felt like we were broke and didn’t have enough money to make ends meet. I remember the 12 different stores mom would go to every week with coupons in hand to get the best deals on the healthy food. And I remember, the heated discussions from behind closed doors.
I also worked from a young age, as soon as I could babysit, referee soccer games, work at fast food restaurants, I worked. In fact, I don’t think I had more than a month of not working from the time I was 13 until I lost my corporate job a year after my youngest was born. Then I tried the SAHM thing and knew it was not for me.
Despite all my parents’ efforts, somehow I missed the lesson on credit, so in college, like many that we hear about, I got into trouble with credit cards. Lucky for me, the amount I owed was less than my car was worth so when I graduated and decided to move to Chicago to ‘save the world’ with my social work degree, I left my car behind which my parents sold for me and it paid off my credit card debt. (It really did cover the debt, they did not help me on that one.)
When I was married, I managed our money, paid the bills and a lot like Ashley’s Financial Relationship my husband was also self employed and he gave me the money we needed for our budget and kept the rest. We were relatively well off for a while, but in the end it was not a good situation, and obviously ended in divorce. (The finances were not a reason for the divorce, but did end up leading to a lot of resentment on both sides.)
So I’m getting to the point…all my God given smarts, all my education and all these life lessons, making and managing my money for so many years now and I’m still really horrible at it! Really horrible! I need a keeper, someone to put me on an allowance and take control of my accounts. My self control is ….ugh! I just keep hoping that getting out of debt is kind of similar to the tenets of AA (not comparing or belittling AA at all) – I hope the first step to recovery is admitting I have a problem. I have a problem, a repetitive problem that just sabotages myself!
I’ve been reading a bunch of financial books and a few blogs and my continued favorite is Get Rich Slowly and this week I read this post: http://www.getrichslowly.org/blog/2014/04/15/8-years-of-get-rich-slowly/. Did you read tenet #1? (Since reading this article I’ve been putting some thought into my own tenet’s, and wrote them out on my personal blog if you are interested.)
I’m focused and I’m determined but I’m still really, really weak. This is why I’m always broke, always! As soon as I get money I spend it…not on junk anymore, well, most of the time. But I know like a dollar burning a hole in a child’s pocket that if I don’t get the bills and debt payments made, I will find somewhere else to spend it. So it’s good for now, I have a goal and plenty of debt to keep my money occupied, but what about after?
How do you develop the self control to say no? I’d love to hear your ideas on this one and in the next couple of months I will share what I have in mind especially since I plan to start saving with my new part time job that I wrote about earlier today.
Hope is a creative, solutions-focused business manager helping clients grow their business and work more efficiently by leveraging expertise in project management, digital marketing, & tech solutions. She’s recently become an empty nester as her 5 foster/adoptive kids have spread their wings. She lives with her 5 dogs in a small town in NE Georgia and prefers the mountains to the beaches any day. She struggles with the travel bug and is doing her best to help each of her kids as their finish schooling and become independent (but it’s hard!) She has run her own consulting company for almost twenty years! Hope began sharing her journey with the BAD community in the Spring of 2015 and feels like she has finally in a place to really focus on making wise financial decisions.
I would suggest that you make as much of your budget as humanly possible automated. If you don’t have it in your “pocket”, you can’t spend it. Once you are debt free, determine your long term goals…retirement, travel, children’s college, replacement car, etc. Put those extra dollars in individual accounts where you never see them, don’t miss them and let them accumulate until that particular goal is met. Once your budget is automated and you are used on living on “???”, then any raises, bonuses, gifts, etc. should also go into whatever account(s) you determine. Self control is a lot like an exercise program. It’s hard to begin with but as you stick with it, you will find yourself growing stronger and more fit! You can do it!!!
Mary,
You are so right, automatic payments would be HEAVEN; unfortunately, since I am contract labor, my pay dates vary from month to month, project to project. While my steady stable of clients are great at paying me quickly, I still don’t know when it will come in. I tried setting everything for the end of the month or beginning of the month automatically but it just takes one month of a client payment being late to learn that lesson the hard way.
So now as soon as money comes in I pay the most urgent…most all before due date, but I have been known to use the grace period a time or two. I hope with the new job and a new project I just picked up I can get ahead a month on most bills and then perhaps automating again will be feasible.
Thanks for the suggestion.
Mary is spot on in that your money will need to have “job” once you’re done with debt payments. Say you have $850 of fixed bills to pay every month, so the first $1500 in cash flow in will immediately go straight to those bills. Then perhaps you’ll want to save the next $600 of cash inflow to your retirement. The next $400 could go straight to your fun goals/savings accounts, etc.
Or perhaps you’ll decide that for each time you have cash come in, you’ll separate out 40% to bills, 40% to savings, 10% for fun (or fun savings) and 10% to donate. This way you’re money will still have a job and not just be sitting there begging to be spent.
Ack…that second $1500 should be $850. Losing my mind over here.
I really like the way you both put that…my money has a job. And I like the way you broke that down, that totally seems do-able to me.
It’s not easy, I’ll say that. But it’s not impossible.
For larger purchases, maybe you should start a “30 day list” like Ashley?
For the daily frittering away of money…what are you spending it on? Food or merchandise?
Kristina,
I like the 30 day list philosophy, right now mine is more of a 3 month list as I am trying my best not to buy any wants and focus on needs and debts. I hope that by doing this really well through the fall, I can loosen up a tiny bit around the holidays. I hope!
These are good suggestions for ways to manage your money. However I suspect it is more about lacking long terms goals, feeling like material things or spending money on loved ones is the key to happiness, not feeling worthy of having money or something similar. I think we all walk around with unconscious or at least not acknowledged beliefs about money, happiness, love and self worth that are all mixed together. Perhaps journaling your thoughts about these things will help you see the pattern and not swing from extreme to extreme any longer. Be kind to yourself along the way.
Juhli,
It seems like I am on quite the self discovery journey these days as I examine myself alot more closely in trying to change bad habits and create a healthier atmosphere for myself and my kids. You are very intuitive.
I’m still not to the root of my money beliefs, but I am definitely working on it.
I have had the same issue like you Hope – My indulgences were always stops at coffee shops to get a coffee and a pastry. When I needed to save money, I decided, ok, I will only go to the coffee store once a week etc. So the entire week I was looking forward to going to the coffee store to indulge. Then I couldn’t afford to go at all anymore. What that made me realize was that once I stopped going entirely, it actually became easier not to go anymore. Sort of, it was the default not to go anymore, so I didn’t even think about going. Maybe you can get into that thought pattern as well? Sort of automatic not to go anymore?
PS – This month I am finally rid of my 12K worth of credit card debt 🙂 Paid down with 3 jobs, while in grad school within 10 months once I set my goal to it
Anne,
That is SO great! You must be very proud of all you have accomplished. And you are right…changing those habits is challenging, but just like giving up soda a few weeks ago, this is another thing I will just have to go cold turkey on. Thanks for the encouragement.
First How is the soda thing going? Hanging in there? Second what are you saving for? An emergency fund?
Theresa,
I am SO PROUD of myself. I have not had so much as a sip of soda since the day I quit…not one, not cheated at all, no bending the rules for any reason.
I think an emergency fund is the first thing I need to save for, and after that a down payment on my house, after that, I’m not really sure.
Thanks for asking!
That’s awesome! Congrats!!
On another note, I’m very much like you (except I consider myself Street Smart but not very Book Smart). I have a hard time with Self Control. I got myself on a budget over 5 years ago and STILL have The Wants all the time. I overspend occasionally. I want to overspend every day. (I also like to binge eat and have a hard time controlling that). It’s a problem. I admit it. And like you mention the AA steps, I really, honestly do just take it one day at a time. I find having a community, like this one, or reading other blogs, or talking to my friends and family really helps. Everyone knows how I work, my budget, my debt, and they help keep me on track. It’s still a struggle though. Keep at it, girl! It’s hard, but you’ll get better and better each year, month, day!
Thanks, Manda!
I’m with you, finding people who have walked or are walking this path to support and encourage and advise me has been really key to my attitude.
I think there are a couple of keys to get and stay out of debt. First, I want to stay that I like your story and I do believe you truly want to get out of debt. Of the four bloggers, I think you have the best chance of getting and staying out of debt.There are a few things that stand out though in my opinion, some of which might get in your way.
First, you have to get pissed. I mean really pissed. The reason for that is that it makes you want to change. I think it’s great to have financial goals and to have a financial plan for paying off your debt however to really change any behavior in life, you have to hit rock bottom, get angry and then not only resolve to change but do something different. I sense you are there. You have to want your goal so much, that’s it’s unacceptable to stay where you are.
Second, you have to be disciplined. Changing behavior is hard whether it’s a diet, paying off debt or anything else. Discipline is a huge key and often underrated. I find it helps to stay focused on my goal. I typically have a little mission statement that I read every day to keep me focused. Also, whenever I am trying to change a behavior, I always add a goal of reading 20 minutes a day on that topic. Helps me stay focused. I like to read Dave Ramsey’s inspiration stories from readers on his website.
Third, you have to have a plan for those times when you are weak. For me, I’d like the freedom of not worrying about how to pay for home repairs, freedom to order something on QVC if I like it or just money in the bank to cover my home owner’s deductible or car repair. I just bought a home last year so I am working on building up my savings again since I had a few home repairs right from the start. I write these items down and then read them over when I want to do something impulsive, like get a pedicure. I also try to set myself up for success. If I don’t want to spend money at a retail store, I stay out of them!
Next, you have to really learn and understand that being happy isn’t always linked to having money. For example, on an intellectual level, I know that the most expensive ways to eat are restaurants first, then fast food, then packaged product from the grocery store and finally making something from scratch. Years ago, I used to feel sorry for myself when I didn’t have the money to go to a restaurant or get fast food. Then I learned to cook and make good food. Eventually, I learned to make more and more stuff from scratch. That started when I was on Weight Watchers years ago and I realized that I could get a lot more food that tasted better if I made it from scratch versus eating a Lean Cuisine. Anyway, now when I am hungry, I’ll go to the grocery store and pick up the items I need for an item knowing that I can make an awesome meal that is healthier and tastes better than any restaurant meal that I could buy and it saves me money too! I don’t feel like I am getting short changed at all but I am being frugal and eating well. Win, win! This is one area that I think you need to work on…I sense that being on a budget feels confining for you in that you have to eat ramen noodles. Changing your perspective on happiness and even your perspective on money and learning to associate having money with “freedom”-the freedom to make choices, the freedom to travel, the freedom to do whatever. That is a huge paradigm shift and one I ‘d like to see from you since I think it would help you immensely.
Finally, more money is never the solution. I was pretty excited when you were eating ramen noodles (because I know they are crappy). I was hoping that eating ramen noodles might open the door to cooking more from scratch. There are so many ways to save money grocery shopping (we’ll save that for another post) however from a purely financial perspective, you get the most food for your money and belly when you cook from scratch. It takes more time, but not a lot more time. When I first started learning to cook from scratch, I was astounded at how simple it really was to make things. I had no idea.
If I had to plan your debt story, I wouldn’t have had you take on the extra job. I would rather you spent six months on working on the grocery budget alone because I think that would have the biggest impact on your budget and it would fill your kids up better. With three sons, you have to learn cooking skills that will fill those boys up or it will blow your budget as they get bigger (spoken as a Mom, lol). By working on the grocery budget, I mean choosing the right store, learning how to shop, learning how to cook from scratch, learning how to stretch meals, reading labels, etc. Target is a very expensive store to shop at for groceries! Once you learn how to cook and eat well, the budget will fall into place. There are also so many fun learning opportunities for this kids-everything from visiting an organic farm to see where the food comes from, milking the cows (possibly), learning how to make meals from scratch as a family, etc. Fridays could be make your own pizza night where you place all of the pizza dough and the toppings on the table then the kids top their own and you bake them all up. You could do the same with oatmeal cereal having all of the fruit/nuts/toppings on the table and let the kids add their own. These life skills will last the kids a lifetime. If a person learns to cook and eat well, then managing money will never be a huge issue because they’ll always be able to eat and you’ve taught them to be happy without money. Money will come and go in all of our lives-there will be times when we have a lot and times when we don’t have as much for whatever reason but if you can figure out how to be happy and to cook, you’ll always be o.k.
And finally, find a frugal buddy! My sister is ultra frugal…has her home paid off, pays all of her insurance a year in advance, 9 months of savings, etc. She is very creative so when I am stuck sometimes and don’t want to spend money or don’t have the money, I’ll ask her what she’d do. I remember one time many years ago she had bought a house that she was fixing up. She used to go to a high end neighborhood known for tear downs and purchase a sink for $5 etc. Anyone, one time she needed a furnace. So she bought one “used” from one of the tear downs. I mean, really, that would not have been on my radar in a thousand years. I would not have thought about it or even known it would be possible. I just wasn’t there mentally. So definitely, find a frugal buddy that you admire and ask them how they save money.
I’m curious what area of the country you live in, Mary. Your comment about Target being an expensive place to buy groceries is absolutely not true where I’m at – it’s the cheapest.
Sara,
Target is one of the cheapest here too for alot of items. I don’t create price books, but on our regular items I know the prices and check them between stores every ones in a while. I can typically save 30% of alot of my staple items at Target vs Farm Fresh here.
I agree with almost everything in Mary’s post, except I feel the comment that “more money is never the solution” is way too strong, at least as a general statement. In line with the idea that money is as much psychological as mathematical (paraphrasing the Get Rich Slowly tenet #1) (don’t forget that it is not JUST psychological!), we all have to figure out the best way to keep our own lives sane and all of our goals accomplished.
I’m perfectly comfortable saying that having extra income made a HUGE difference for us. We can be frugal, without being scrimping. We don’t have to THINK about money. THAT was a tremendous thing to realize and it has made a huge difference in our overall stress, happiness, etc.
Joe,
That’s where I want to be. I don’t really care much about being ‘rich’ but having enough money that I don’t have to think about paying the bills would be great and as Mary mentioned being able to buy something off QVC every once in a while would be nice.
Joe, I didn’t quite mean it like that, lol. I just meant that while more money is nice, if you haven’t changed your behavior, then more money doesn’t solve issues since a person can get back into debt again. That’s all. I should have been more clear. My post was meant to be helpful and I hope it didn’t come off as too stern. Sometimes I have to rush to take care of my son and in haste it may not have come off nice. For that, I apologize.
No worries, thanks for the clarification. I can definitely see that perspective. It was really a wonderfully insightful post, probably should be saved and made required reading for future BAD bloggers. 🙂
The thing Joe and Hope about earning more money. That is great. But the number one rule when you are in a hole (debt) is to stop digging – not to go out and look for more fill dirt. You have to get the outgo under control before any progress is going to be made. And why is that – because it is human nature that when we make more there is always that feeling we can spend a little more.
And though I do agree that you will all need to develop additional income streams, if you don’t get the spending under control, it won’t get you to your goal. Hope – I think saving for a down payment on a house is a great goal – AFTER you get your debt paid off. Please consider the Dave Ramsey advice and get your emergency fund in place and then focus with gazelle like intensity on that debt. Don’t split new money between savings, fun and charity. Put it on your debt. You seem to lack focus on that as a goal. Congratulations on your new income and I hope you use it to focus on your debt.
You are right, Lynn, I definitely have to change my perspective of money AND set more goals, concrete, acheivable goals. I’m working on it, thank you for sharing your perspective, it really helps!
Hope, I see real progress in your journey. You seem hesitant with some techniques when they are first mentioned but then you seem to think them through and really commit to a more fiscally responsible course of action. Impressive girl! I am sure with 4 young ones dependent on you for support and schooling it must be overwhelming to contemplate yet another task.
Agreed Lynn, you definitely need to work both angles. And the spending side is more firmly in our control (usually). The only thing is that I recall Hope’s budget being pretty reasonable. So I think it’s great that she can develop an additional income stream within her schedule constraints and this should really accelerate the debt payoff.
I also fully agree with Lynn (similar to the stance I took with Ashley) that you should concentrate your fire on the debt and ease towards your final goal (the 40/40/10/10).
Mary,
Thank you for your very detailed and thought out response. You are very right, I am at rock bottom and really ready for change. I am learning to cook better, my kids are learning to cook better…it’s just the time sometimes, between work and schooling, then ending up in the kitchen at the end of the day when I’m just ready to sit down! But you are right, the grocery budget is the number one place we can make changes and not only when they be financially sound changes but healthy changes, which we all need.
I’m going to re-read your comments again (I’ve copied them off to a daily reading I do,) but know that I truly appreciate the encouragement and suggestions very much!
I totally understand about the time thing and being tired at the end of the day. That’s why change takes so long, lol. For those days, you want to figure out some quick recipes. We are all in the same boat. It’s even harder for us single parents. Good luck.
Hope,
I’m not sure this would help, but have you considered once-a-month-cooking? With the kids help one weekend a month, you could potentially have a few weeks worth of prepared healthy meals, designed either for the crockpot or some quick cooking the night of.
I know your kids shop once a week, but maybe consider double or triple batches of things like lasagna, enchiladas, soups, etc. to start building a stock of easy-prep meals for those nights when you’re tired.
All of that is off-topic to your post, but my response to that echoes the others. For me, what has helped with the discretionary spending is putting it in terms of my hours worked or, for food, exercise needed. Is a new dress worth 2 hours of work for me? Is that fast food worth an hour and a half on the treadmill?
I love everything about this post. Mary, can I come and live with you?! 🙂
Thanks for being so honest, Hope. I think you are going through a paradigm shift in your relationship with money, and it is not comfortable! One thing that works for hubby and me is that we are both minimalists. We don’t like a lot of clutter, a closet stuffed with clothes etc. What is out there that tempts your spending? I would be curious to know because there is just too much unnecessary junk we can spend our money on. I think you would be surprised how much easier it is to save money if you live in a neat, organized home with minimal clutter. It creates a kind of mental focus that helps one achieve goals.
My parents were also very frugal, and I never forgot those lessons. However, there was never any tension in our household. We just knew it had to be that way! When I was a junior and senior in high school, I worked in a small supermarket that paid me about $1.80/hour in that day. In those two years, I was able to save $1,700 on that meager wage! I seemed to have everything I needed, but I wasn’t much of a spender in those days either. Once you see a savings account grow, you will want to protect it by not spending. Believe me, it’s true!
Kiki,
Even before BAD blogging I had set a goal to ‘de-clutter.’ Although that’s really not a big issue for me, it was big enough that I really set it as my one goal for the year and slowly by slowly every closet, every bedroom has been cleaned out and non-necesities purged. Everything I couldn’t figure out what to do with is now sitting in my room…and that purge is pretty high on the to do list so I imagine it will take place in the next month as time permits.
I am definitely ready to have a savings account, but have set one up that I cannot see as I fear that seeing it will make slacking off too easy. I will literally have to go to the bank to access it. I think that’s best for now.
Thank you for your encouraging words!
I also agree with what Mary has said! My husband and I automate as much as possible, so that when pay days come, we already have the money allocated and given a purpose. But, I will say it was hard to get here! Getting out of debt was only half the battle, changing my relationship with money was the hard part and it is something that I work on almost every day. Right now my goal is to save for retirement and a house. When I paid off debt I had to make new goals to keep me motivated and the needless spending curbed.
Exactly, having goals keeps coming up so I’m sure that will be my next task after getting some of this debt paid off which is the #1 goal and an emergency fund funded…
Automating will come as I continue to get ahead, I think when I’m a month or so ahead on all bills I will be able to automate a bit more and thus tackle this impulse issue I am currently battling more effectively.
Hope, If automating doesn’t work can you use on-line bill pay through your bank/credit union to pay almost all of your bills? I do that and even if the pay date is down the road a ways it is still subtracted from my checking account in my written ledger so the money is gone/committed and the balance I know I have available reflects that. I log in and schedule the bill pay date the same day I receive the bill and make sure I set it to pay one day before the due date.
I haven’t seen many people mentioning David Bach’s books here, and I wonder why that is. He’s the single biggest advocate of ‘make it automatic’ … and had I know that stuff 10 or 20 years ago, my god what a different life I would have right now. I’d be so much better off.
Anyway my point was, I find David Bach’s books very inspiring and informative, just like Dave’s. if you get the Bach books on CD for your car, you can actually hear him getting excited as he educates you. Luckily my work has a library and we have all his books on CD there. I’ve listened to every one at least twice. I check them out when I start feeling discouraged.