My theme for 2013 is “do the work” as I talked about last week. I came upon this mantra after discovering what I wanted my biggest priorities in the new year to be:
- Health: Losing weight, engaging in healthier eating habits, and leading a more active lifestyle
- Social: Reconnecting with friends, being more open to social situations, and finding a core group of girlfriends
- Finances: Buying a car, spending less and saving more, and paying off my medical bills
For today, I want to talk about finances. I will be talking at length over the next few weeks about my personal finances, my goals for getting on track, and my priorities when it comes to spending and saving.
So, confession time? I don’t have the best relationship with money. I’m not terrible at maintaining my budget. I pay my bills on time and while I do live at home, I help my mom out with rent, utilities, food, etc. There are times when I do the whole “I’ll pay you back when I get paid!” when we’re out and about, but it’s not something I make a habit of. But then there’s money left over. And it’s not going to savings. It’s not going to paying off my school loans. It’s not going to my credit cards. It’s not going to paying off my $2,500 medical bill from 2010. It’s going to fun stuff, like pedicures and clothes and vacations. It’s going to weekday lunches out and frivolous items I don’t really need.
I could point fingers at my parents, blaming them for not teaching me proper money management skills. And I know my past and how much we struggled with money growing up has an effect on how I am today. Today, I am not struggling with money and it’s such a difference from how I spent the first 21-22 years of my life. So I know that plays a part in the decisions I make with my money now. But I also know I am an adult and using my past as an excuse isn’t going to fly with me. The past is behind me. I am in charge of my present and my future.
Last year, I wasn’t smart with my money. I didn’t keep a strict budget and once bills were paid, I was off and running with extra money for whatever I wanted. I tried saving, but then ended up moving the money back to my banking account when I needed it. One of my resolutions was to pay off my last two remaining credit cards and never keep a balance month-to-month but it wasn’t until December that I had even one of them paid off.
This year, I want to feel more in control of my finances. I have to find room in my budget for a car payment, car insurance, and gas. I have to find room in my budget to start forking over a large amount to my medical bills. And I definitely have to find room in my budget for savings.
Blogging about finances can be pretty dull and boring, I know, but I wanted to really hone in on what my spending habits look like so I could create a budget that fits my needs. I didn’t want to create a budget out of thin air, with impossible money targets to hit that weren’t in line with my needs. There’s a science to this, a finesse. I wanted to spend a lot of time discovering my patterns and finding out just where all my money in 2012 went.
The journey was an interesting one, as I poured over my bank and credit card statements and started listing all the different places my money went over the course of the year. Patterns emerged and my eyes were opened at just how much I spent on frivolous items. It was rather astounding to see how much I spent on silly things. I need more control.
It was a process, for sure, and I’m excited to share the journey of how I arrived at a “Perfect For Me” budget that allows me to pay bills, save, and still have money left over for me. I know I’ll learn a lot along the way as I spend less and save more, and I can’t wait to see what else my eyes are open to.
Next week, I’ll be unraveling my spending habits of 2012. It’s not pretty, but it was necessary for me to sit down and map out what areas I spent the most to paint the most accurate picture of my money habits, and how to gain more control.
What kind of relationship do you have with money? Any money goals for 2013?
Erik and I definitely don’t have our finances together… we barely save, have big credit card debt (that we’re slowly chipping away at), and now with me working only part-time (making not even half of what I made before), it’s rough. We do our best and other than the credit card, we pay all our bills. Hopefully things will be better once I finish school and am working full-time. We’re trying to just make do until that happens.
Personally speaking, I know that I spend way too much money eating out and on books. That’s where most of my personal allowance money goes to. I’m definitely hoping to reign in some of that extra spending this year.
That would be hard – with you only working part-time! But sometimes you have to make big sacrifices to reap bigger rewards. My mom and I had to do that when I switched my major and it was definitely hard, but we got through it. It helps to have a great support system when going through it.
All things considered (the fact that we have two mortgages, one car payment, one huge child support payment, and two credit card payments) I feel really good about where me and Knight are on our finances. We have two goals this year: save more and pay down on each of our credit cards (we each carry a balance on only one). We did save a ton last year which I credit to the wedding and also me being afraid of the “rainy day,” situation, but I’d like to save even more. This month we aren’t going out to eat at all unless we have a gift card to the restaurant, he’s not buying beer, and I’m not indulging in extras during my trip to the grocery store (as in, sticking to the list!), and neither of us is buying anything that we don’t need, again, unless we have a gift card (thank goodness for holidays + gift cards). This is our first month of the big child support payment so we have to figure out where our budget will be and how it’s going to work. Normally we can go out a few times a month and indulge here and there, and while we CAN do that, I don’t want us to ALWAYS do that, if that makes sense?
I totally get that! I think it’s an exercise in self-control and understanding needs vs. wants. I really, really want to work on keeping track of where my money is going because it’s all those little purchases that start adding up!
I LOVE money posts and goal posts even if consensus says it’s “boring.”
For the transferring money back into checking when you “need” it. This might help. Open another savings account in a different bank and set up an external transfer. External transfers between my two different bank takes about 3 days. Maybe the 3 day buffer would make it less enticing to transfer from savings to checking.
I’ve stopped shopping for clothes and most books (if I can’t find via library or used book stores, I’ll buckle and buy it on sale on Amazon) and found the longer I go without the less dependent I am. I used to be really into new clothes and now it’s less of an addiction.
One of the things I really do want to look into more is a better savings account, since I don’t have any benefits to the one I have now. And it would be very helpful for a savings account that’s not so easy to access! Thanks for that tip!
I never realized how much I do shop and how it plays on my emotions… so it’s something I want to gain better control of over the next year.
Yay for more money posts? I’m excited and it seems like other people are, too!
I like to think I’m pretty good with money! I was definitely taught to save as a kid and my mom is an INSANE saver. My philosophy is you can never have too much money saved! I kind of obsess over it a little more than I should sometimes.
Something that has helped us immensely is having a cash budget for things like groceries, gas, entertainment etc. It really helps curb unnecessary spending when you only have a certain amount of cash to spend each month. Something I’m also planning on starting to do this year is leave my debit card and credit card at home during the day-to-day to try and curb impulse purchases, which I can be bad at!
I really want to implement a cash budget system this year! I’ve read about it and it’s something I’ve always been interested in but have never put into action. I feel like it would help me to be more aware of my money and where it’s going.
I like your philosophy on never having too much money saved. I think that’s so true! It’s really scary going through life without any savings because if something major happens, I’m not sure what I’m going to do! Trying to remedy that this year. 🙂
I think this is definitely a great thing to focus on. I focused on it last year big time and it really helped me get a handle on things. My bank on a spending report that breaks out your spending by category and that was very eye opening for me!
I think you will be surprised by how much people like these money posts. I got a lot of great comments from people when I did my money posts last year! Which shocked me as I thought people would be totally bored and uninterested!
Good luck with this process! It’s not easy but it will feel so good when you can check off the various goals you are setting!
Thanks, Lisa! I remember your money posts very well from last year and I found them interesting myself. Finances can be a very dry topic, but I think it’s one a lot of people are interested in and seeing how people tackle certain money goals. I’m excited!
This is AWESOME that you’re blogging about this. So many times I think bloggers just gloss over things like “oh we’re going to save more,” and that’s all you hear about it. I’m not great at saving either and I’m always thinking TELL ME HOW! I don’t expect what works for someone else to be perfect for me, but you never know what kind of idea it will spark!
I have an okay relationship with money. Money was always tight growing up and while my husband and I still have a decent amount of bills my new job has FINALLY given us a teeny bit of breathing room so for the past six months we’ve been living it up. (Ha, and by that I mean actually able to order takeout and not worry about replacing that money). New year though and we have some plans to take trips so I will be sitting down soon to make sure we reign it in.
Can’t wait to read more posts about this – thanks for being so open and sharing!
This comment makes me so happy! I definitely plan on getting into the nitty-gritty of spending, saving, and all that jazz. I want to make firm plans of what I’m going to do and how I’m going to do that and if it helps someone tackle their own money goals – even better! I’m excited to get more in control of my finances. 🙂