When is the last time you looked at your checkbook, an ATM receipt or online bank account and noticed that you had money left over at the end of the month?
Well let me tell you … it is quite a strange feeling and one that I just experienced for the first time! That’s right … for the first time in my adult life I spent less money this month then I brought in. I know …. you’re feverishly wondering “How did he accomplish such a miraculous feat? Next thing we’ll see posted is – Obama realizes that Cap and Trade is essentially a tax on the middles class because corporations don’t just absorb costs!”
Perhaps to many the idea of getting excited about something as apparently simple as a month of financial self control seems to be a bit much. Truth be told, many of you have probably mastered this skill with relative ease. But in the short time I’ve been conducting my own personal finance project, I’ve started to pay more attention to the number of personal finance blogs that exist, the number of “Get your Finances in Order”, “Personal Finance 101” and “The Tragedy of American Debt” articles on CNN, Yahoo, MSN and nearly any other news outlet. So obviously for many of us the idea of spending less than we make isn’t quite the no-brainer it seems.
After making a conscious decision to get my personal finances in order I think the biggest realization I’ve had is that my biggest problem is not how much money I make, the bills I have, or the “man” getting me down … but very simply it’s the psychology of money that manifests itself as loud “But I DESERVE it!!!” Yes … I’m starting to wonder if I’m not my own little entitlement program?! Am I simply an inflated micro-bureacracy that increases the budget every year but does very little to reign in reckless spending? And who have I assigned to the oversight committee on my spending?
And that’s really what I started asking myself this month. What monthly spending items did I have to veto? Where was spending out of control? What programs weren’t getting a good return on investment? Were there expenditures that were propping up regimes intent on destroying my personal finances?
Most importantly – I stopped the “I deserve it” mentality that I used to justify everything from $200 boxes of cigars, to trips to NYC, going out for lunch every day and an innumerable number of daily situations and little decisions in which I refused to tell myself “No”.
Instead, what I told myself was …. “You DESERVE to be out from under the weight of Debt. You DESERVE to be free of The Debt March!”. I know I know … a bit dramatic … but it is empowering (and down right exciting) to consider the idea of no debt. No payments to Credit Card companies, no Student Loans, no Medical Bill, no Car Payment. And really … it can be a simple as that – telling ourselves ‘NO’.
So I said “NO” for a month and here are the highlights –
* I paid off my Discover Credit Card. Sent them $350 and put that card in a place never to be used again.
* I put $250 into a Savings Account and am now at $295 for my Dave Ramsey Baby Step 1 “$1000 Emergency Fund”
* I’ve got $50 leftover that I’ll be carrying over to this month. And that’s $50 I can put towards paying off more debt!!
So am I going to right the financial ship anytime soon? No. Do I have to be diligent and watchful of a relapse into “But I Deservitism”. Absolutely.
Nonetheless, after a month of adopting some very common sense tools (a monthly budget) and an even more common sense attitudes (“your not a child Holden and sometimes you’re going to have to say No”), I feel good about the direction I’m going in.
And that’s a first when it comes to my personal finances.
For a discussion on the pyschology of debt, take a look at this article at www.bankrate.com –
“The psychology of debt: Why we do the things we do” – http://www.bankrate.com/brm/news/cc/19980713a.asp