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Power of Good Habits

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Good Habits Course Correction

February used to be where my New Year’s Resolutions went to die. For the second year in a row, though, I skipped setting a bunch of resolutions and instead focused on adding one good habit to my life. It’s actually been working. Once a new change becomes routine, I move on to another.

Have any of you read “Atomic Habits” by James Clear? He has all sorts of great thoughts on this topic:

“A slight change in your daily habits can guide your life to a very different destination. Making a choice that is 1 percent better or 1 percent worse seems insignificant in the moment, but over the span of moments that make up a lifetime these choices determine the difference between who you are and who you could be. Success is the product of daily habits—not once-in-a-lifetime transformations.”

Our debt journey has required all sorts of new good habits, like keeping a budget, checking our accounts regularly, working on side hustles, and cooking more at home. Most of these are not fun and it’s been hard to make them part of my life, but small changes are really helping correct our course.

Here are two trivial-yet-effective habits that have helped our finances this past year:

Replacing the Gym

My husband and I had gym memberships that we were hardly using. We were full of excuses, we weren’t getting the exercise we needed, and that money was wasted each month.

It was time for a new habit. Last summer we started getting up an hour before the kids (heaven help me!) and working out together. We began to run back and forth on the street in front of our house and then doing workouts inside. We felt accountable to each other, we liked the extra time together, and—miraculously—it became our new routine. We modify it sometimes and we aren’t perfect with it (Northwest mornings can be rainy and dark, ya’ll), but it’s become such a habit that we felt confident canceling our gym memberships and saving all that money.

Breaking the Cereal Habit

Our family used to all eat fruit and cold cereal for breakfast, but it wasn’t super satisfying. I realized I was spending about $10 a week so we could all be hungry an hour later. So my husband and I started the habit of making ourselves smoothies for breakfast, and we both felt so much better in the morning.

Our kids were a tougher sell. When I offered toast or a smoothie they still reached for the cereal. In November I decided to make two new breakfast habits:
1. I stopped buying cereal for breakfast. Boom. The end. Fin.
2. I started using one night a week to make things like waffles and muffins to freeze and warm up in the mornings.

The first morning after all the cereal was gone, I braced myself for a coup. But resistance was minimal! And because I was actually getting up before them, I could quickly make eggs or oatmeal that they now somehow love. (Who are these children?!)

They still ask about cereal sometimes and I don’t always love prepping stuff at night, but these new habits have become our norm. Gratefully we don’t spend $30-$40 a month on food that doesn’t satisfy.

 

Are home workouts and homemade waffles going to single-handedly get us out of debt? No. But I like seeing that consciously choosing good habits is moving us towards financial independence and helping us become who we want to be.

January Spending Update: No Good, All Bad

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I’ve been responding to comments from my post yesterday addressing the wild spending. As I wrote in that comment, I behaved in January like a dieter who has recently had success losing weight. They decide to celebrate their achievements by heading to an all-you-can-eat buffet or they go on a vacation and gorge themselves. I don’t really have a good explanation for how and why I justified my spending. Sometimes progress isn’t linear, and I slipped up.

It’s a bit crappy for me that the first month I successfully tracked every spent dollar, I went so off the rails. But data is data, and I will use this to help me going forward.

Let’s jump right in.

January: The Big Numbers

Net income (after tax) $ 7,319.91 My largest pay month ever, excluding bonus months
Amount spent $ 6,668.33 An astonishing amount
Amount saved (not including payroll deductions)$75To my fun investment account which is still returning 11.5%
Loan and line of credit payments$733.33This is the bare minimum I promised myself I'd pay each month

Upon review, it would appear there was money left over. Not (really) so. I paid my credit card bill from December for my flight out east, the extra luggage fees (my mother sent me home with family heirlooms), and Ubers to and from the airport. After that, I only had a couple hundred leftover.

Breaking Down Spending Categories

Rent/Utilities: $1673.00

Food (including groceries) and going out with friends: $1488.37 Lumping these together as there were a lot of dinner parties at my house and friends’ houses and I’m having trouble separating all the grocery bills between what I needed and what I spent on entertainment. This also includes restaurants.

Fitness-related expenses: $179.11. My $23 gym payment comes out bi-weekly, and it came out three times this month. I also paid for Noom @ $92.50 and a session on yoga for sore feet @ $15.

Transportation: $981.23. I had three car payments this month (all my bi-weeklies came out three times). There were $156.86 of Ubers that were not part of vacation spending (I tracked vacation expenses separately). I spent $60 on gas, $55 on parking, $80 on public transit (adding money to my metro card), and $152 on car insurance. Insurance is extremely expensive where I live.

Material items: $451.48. Includes the aforementioned $225 used espresso machine, an orthopedic dog bed ($56), some clothing, cleaning supplies, and plants.

Subscriptions and events: $280.29 – $210 of which was for the Blue Jays Home Opener in March. I’m so excited!

Gifts: I have $154 of stuff in here that I bought for people, between when I was in Nova Scotia and for a friend here in Toronto.

Amazon purchases: $233.29. This kills me… I don’t like what Amazon stands for and even though I try to be very environmentally-conscious and avoid same-day delivery, I still give this corporation money. These purchases include a yogurt strainer, a viral hairdryer (no regrets, it’s life-changing for me getting ready for work), some pet supplies, a veggie peeler – a whole bunch of small purchases.

Personal care/bathroom stuff: $58

Spending on vacation: 332.60

Misc: $121 – this includes pet insurance, rental insurance for my house, and a charitable donation

What Happened?

I’m not trying to make excuses. I wish I could convey the guilt I’m feeling. In fact, I had a therapy session that mostly covered finance because the behavior was so wildly outside of what I want for myself. It scared me. I don’t want to fall back into old habits.

I’ve mentioned in previous posts that I budget with a budget calendar. It works really well for getting me used to not spending more than I have. The problem is this process hasn’t scaled with my income. As I’ve increased my income over the past year, I have spent a lot of that extra income. But I have a good idea of what my income will be this year each month, and I need to be significantly more strategic about how I save if I ever want to be financially independent. So, I think I will continue to use my budget calendar, but I will give every dollar a job (to borrow from YNAB lingo) for the month in the calendar.