A quick note: For some reason, all the comments I’m receiving are going straight to my spam folder. I’m able to retrieve and approve them, so if you leave a comment and it doesn’t look like it went through, it most likely did – it’s just in my spam! You can leave me a message on Twitter or through my email to alert me if you’d like, but I’ll be checking my spam folder frequently to retrieve comments. (I’m in the process of getting this figured out and fixed!)

A while back I wrote a post about things I splurge and save on. The majority of what I wrote then is still true, even with my new focus on paying off debts and saving money. Today, I thought it would be interesting to showcase little ways I’ve started to curb my spending this year, since I am really trying to put more effort into being a better money manager, while I also increase my income, by doing online trading with services like VT markets France. Sometimes, it can be easy to get down on myself because I’m not putting thousands of dollars toward my debt each month. (I’m so inspired by debt bloggers who can do this! It’s just impossible for me right now, unless I were to get a second job.)

Anyway, let’s dive into the post, shall we? Here are five ways I’ve been curbing my spending this year:

1) I’m packing my lunch. As is well documented on this blog, one of the main ways I struggle when it comes to curbing my spending habits is with eating out. It’s probably my favorite way to spend my discretionary income! This year, I have been really diligent about packing my lunch for work and not going out. In fact, I haven’t eaten lunch out once this year! (Well, on a work day, which, for me, is Monday – Thursday. Still! It’s progress.)

2) I’m only buying toiletries once a month. This cuts down on the number of times I go to Target, which is the biggest benefit. I still end up at Target more than I really should (it’s my happy place!), but cutting down to one big toiletries visit a month seems to be helping my budget. It’s just like how grocery shopping once a week is better than shopping multiple times a week: that big shopping trip seems expensive at first, but in the long run, it’s less expensive than all those little trips combined.

3) I’m meal planning every week. Oh, meal planning is not fun and I rather despise grocery shopping and cooking, but it’s an absolute must to adhere to my budget. Every Sunday, I spend a little time (honestly, it’s never more than 20 minutes!) making a weekly meal plan. I still wind up eating out a lot on weekends, but it does help me to eat at home on weekdays. I usually only plan for 2-3 actual meals (between lunch and dinner) since they make a ton of portions so I can have leftovers for days. Leftovers = budget saver.

4) I’m turning down social plans. It really pains me to turn down social plans, because I’m not someone who gets asked to do a great many things. Mostly, I say yes because I need social interaction and I need to build stronger friendships. But sometimes, I have to say no, because it just isn’t in the budget. Like a pedicure or a night out on the town with girlfriends. It hurts, it doesn’t feel good, but I know I would feel worse to say yes and have to use the credit card that I just paid off to fund whatever outing it is. There’s a balance to be found between still enjoying life and being social and sustaining relationships, but also sticking to a frugal budget and making smart money decisions.

5) I’m paying attention to my budget and spending habits. This one is a biggie! I log onto my bank account online almost every other day so I can keep an eye on my budget and see where I’m at, money-wise. I use the handy-dandy budgeting spreadsheet that I adapted from Blonde on a Budget, which I constantly update. It helps me to see what areas I’m going overbudget (eating out and shopping, usually!) and readjust throughout the month. Gone are the days when I don’t look at my bank account for weeks and spent money carelessly! Keeping my budget updated is important to me, as is sticking to it and making sure I am achieving the money goals I set for myself each month.

What’s one way you’ve cut down on your spending lately?

On Monday, I talked about my debt story and how I’m changing my focus to put a greater emphasis on paying off my debts, saving money, and spending less. Today, I want to talk about the nitty-gritty details of my debt and what it’s going to take for me to pay it off.

So when it comes to my debt, here is where I stand:

Credit cards: $1,204
School loans: $14,371
Car loan: $10,183
Medical bill: $2,500*

*Estimated. I need to get the actual number from my collection agency, but this is accurate, give or take a few hundred dollars.

In total, I am $28,258 in debt. But as I mentioned on Monday, I don’t include my car loan in my debt because I do consider it “good debt” and something I’m going to have for a while. (It’s honestly inevitable, especially since I’m not going to put a ton of focus on paying off my loan right now, and will be refinancing in another year.) So when you take away that, I have $18,075 of debt to pay off. Wheeeeew.

Denial, denial, denial. That was the name of my game. And now I’m nearly $20,000 in debt because of it. I recommend going to kreditfinanzcheck.de for advice before applying for loans. Business owners who are struggling to pay off their debts may consider seeking company insolvency advice.

But there’s nowhere to go but up! (Or really, down, if you think about it…)

My original goal was to be debt-free by the time I was 30, while also having $5,000 saved. After crunching the numbers, that’s not going to happen.

Oh, it could happen. I could do it. But do I want to live the next four years in a world where I cannot shop or travel or eat out? No, I do not. Paying down debt is important, but I’m not going to sacrifice my quality of life in order to do so. I realize this goes completely against what Dave Ramsey and personal finance bloggers preach. Live off rice and beans now and you’ll be able to live the rest of your live with financial freedom! Well, true. But I also firmly believe that life is meant to be lived and I don’t want to give up precious experiences because I’m too focused on money.

I’ll be taking the Debt Snowball approach, as suggested by Dave Ramsey, to pay off my debt, so when broken down, it looks like this:

Credit card #1: $234
Credit card #2: $947
School loan #1: $901
Medical bill: $2,500
School loan #2: $6,195
School loan #3: $7,275

And yes, I do understand math and I realized “Credit card #2” is slightly more than “School loan #1” but I really want to focus on getting my credit cards paid off first before I start tackling my other debt. I plan on cutting up “Credit card #1” but keeping the other credit card around for emergency purposes. (Possibly kept in a block of ice, a la Shopaholic.) (Maybe kidding.)

Taken like that, it seems a bit enormous and overwhelming and makes my heart race. But I’m only focusing on it bit by bit, one year at a time. I’m not going to set out a huge debt repayment plan, because things are going to come up. Emergencies may happen, trips will be planned, and it’s life. I want to enjoy it. I don’t want to be so bogged down in paying down my debts that I forget to enjoy the present.

So my plan for 2014?

• Get completely out of credit card debt
• Have $1,500 of my emergency fund saved
• Pay off my lowest school loan
• Begin saving to move out on my own (around $1,000)
• Budget for one tiny vacation in the summer

It’s a lot. It may not come close to what other people pay down in their debt over the course of the year, but it’s going to take a good chunk of my income to make this all happen. When I total up my necessary bills (things like rent, insurance, cell phone bill, groceries, gas, etc.), that takes up 74% of my income. That leaves me with 26% for debt repayment, savings, and disposable income for myself. If I achieve the above goals I set for myself, that will take up another 19%, leaving me with 6% as disposable income.

That’s not a lot of fun money! And that scares me because, honestly, I like having fun money. I like being able to shop and go out to eat and stop by Starbucks on a whim.

But I also hate that feeling in the pit of my stomach as I swipe my debit or credit card again. As I log onto my bank’s website, chanting, “Please still be in the triple digits. Please still be in the triple digits.” while I wait for my account to load. As I look at my credit score and my heart absolutely sinks when I realize how much work I have to do.

In order to satisfy the financial goals I set for myself this year, I had to make two tough decisions: first, I will be foregoing any big vacations this year. That means no cruises, no trip to NYC, no traveling. As mentioned above, though, I do intend to take one tiny vacation this summer, most likely spending a long weekend on the beach or in Orlando. Because, remember, it’s life. Paying debt and saving money is important, but so is actually living and experiencing and making memories and having fun. A short weekend won’t kill my money goals, like a long, week-long cruise might. Consider seeking guidance from a credit counselling service to help navigate your financial decisions and prioritize your goals effectively.

The second big decision, something I alluded to in my post on Monday, is that I decided to postpone moving out on my own. Right now, I live with my mom in a gorgeous apartment, but I was planning on getting a place of my own when our lease was up for renewal in November. But moving out is going to be costly, between apartment move-in fees and buying things for the new place (such as a couch, kitchenware, a dining table, etc.), so I was very torn about what to do. On the one hand, I’ll be nearing 27 at that point and honestly, it is time for me to be on my own. But on the other hand, I really want to place a priority on getting rid of my debt and the responsible thing to do would be to postpone moving out. I talked it over with my mom and she basically laughed at me when I asked her if it was okay. (I think she likes me!) So the plan is to stick around for, really, another two years and save, save, save while doing so. I feel much less anxiety by putting this off until 2015.

So there you have it! It’s not a complete plan for getting out of debt, but I want to take things from year to year, as so much can change in the course of a year, much less five years. Instead of putting together a long-term plan, I’m just taking it little by little. This year, I’m mostly concerned about starting an emergency fund and paying off my credit cards, and if I can get one school loan and start saving for moving costs in the meantime, I will be one happy camper.

Every month, I’ll be updating this blog with my progress, including a detailed description of my budget and spending habits. I have ambitious (for me, at least) goals for my finances this year, so I’m going to have to really shift the way I view money and learn to live more frugally. It will be a good lesson, though, and one I’m glad I’m taking the time to learn now, not ten years down the road when I’ve developed even more bad money habits.

Here we go!

What’s one financial goal you have for this year?

For the past few years, I’ve been playing the denial game with my debt. I’ve been shoving it under the rug and pretending it doesn’t exist. I’ve been paying off my credit cards, then maxing them out. I’ve been ignoring my large medical bill that’s now in the scary hands of a collection agency. I’ve been defaulting on my school loans, putting them in forbearance, and trying not to think too hard that I have a five-figure debt I need to take care of.

I’ve mentioned before that I didn’t grow up in a home that valued money. It feels harsh to say that, but it’s honestly the truth. My dad gambled his paychecks away. My mom tried to support a family of four on a preschool teacher’s salary. I knew about things like bill collectors and evictions long before I should have known about them. I know what it’s like to stress about money, to wonder if your parents can afford groceries or rent or electricity. It’s a scary world and because of that, I was never taught how to use money effectively.

But I’m also 26 years old. I’m an adult and I can’t blame my parents for my money habits anymore. I have to own up to the fact that I never placed a priority on learning proper money management tactics, and that I’m in debt – major debt – and I have to change my money habits now. I have to take action now.

At the end of December, I read the book The Total Money Makeover by Dave Ramsey. I should start off by saying I don’t really like Dave Ramsey. There’s something about him that rubs me the wrong way, possibly because he seems to place being rich over anything else. I’m honestly not looking to become rich. Or a millionaire. Or even living completely debt-free. When thinking about my ideal money life, the key feeling I have is comfort. I want to be comfortable with my money. I want to handle it in a wise, controlled way. I want to be able to pay my bills, save money, and have a decent-sized disposable income to use for entertainment, travel, and shopping. And, of course, I want to be mostly debt-free.

(I say mostly because I am perfectly fine with having a car loan for the time being. I am planning to trade my car in next year for a newer model + better car payment, so I know I’ll have a loan for a while.)

I’ll be honest: I didn’t learn a ton from Dave Ramsey’s book. I found his tone brash and condescending, and it was hard to relate to many of the personal stories that were scattered throughout the book. All that said, there were some key thoughts roaming through my head while I read the book.

First, I need to reevaluate my money habits and change the way I view money.

I don’t spend my money wisely. I make a budget and I don’t stick to it. I eat out way too often and spend money on way too many unnecessary things. I’m living paycheck to paycheck, even though there’s no reason why that should be the case. I have to completely change the way I think about money. I have to build a better budget and get super strict with my spending habits.

Second, I need to begin working towards an emergency savings account ASAP.

I’m not sure if you know how scary it is to have absolutely no savings. Because it’s terrifying. I have no safety net to fall back on if something happens in my life. If I need a car repair. Or I get sick or injured and have to visit the ER. Or, say, I shatter my iPhone screen and need a phone replacement. My ultimate goal is a $10,000 emergency savings fund since Dave Ramsey cautions to have a fund that will pay for three to six months of expenses, erring on the side of six months if you’re single. For me, that would equal $10,000. I figure it will take me a long time to get to a five-figure emergency savings fund since I won’t be working towards it as ferociously as my debts, but it’s an ultimate goal that I’ll be putting a lot of effort into.

And thirdly, I need to get serious about paying off my debts.

As I mentioned at the beginning of this post, I have been in denial that I’m in debt. Probably because I’ve been in “normal” debt. Credit cards! Medical bills! School loans! This idea of “normal debt” is such a fallacy that we let ourselves believe in because it’s just the way most Americans live. It doesn’t have to be this way and I don’t want it to be this way for me anymore.  I want to get super serious and super focused on my debt. I want to put together a payment plan to get me out of debt and into a (mostly) debt-free lifestyle. It’s possible. It will just take commitment, dedication, and giving up some things for a few years. Like traveling. Monthly pedicures. Shopping. And even possibly delaying moving out on my own.

But this post is long enough as it is. I’ll be back on Wednesday to talk more about the nitty-gritty details of my debt and my goals to pay it off.

Okay, this post was filled with not-fun money talk. How about something fun to ponder in the comments? Let’s say you won the lottery. Paying off debts and saving aside, what is the first frivolous thing you’d buy? For me, I think I’d buy a brand-new queen-sized bed. Right now, I have a full-sized bed on a frame from IKEA, but it’s not very sturdy and I covet my mom’s glorious queen-sized bed.

I always find it interesting to see what people deem worthy or not worthy to splurge on. What things are worth the money spent, and what things do we like to save money on? I’ve wanted to write my own post, but have never gotten around to it. Until today! I had a fun time making this list, thinking of what things I love to splurge on, and realizing my money habits when it comes to things I don’t really love spending money on. It was eye-opening for me!

Let’s do this:

What I Splurge On

Professional haircuts and color. For me, going to a professional salon for my haircuts and coloring is worth it. Yes, it’s expensive. No, I can’t really afford it. (I could put the money to much better use, I suppose.) But I go there because I know they use the best ingredients for coloring my hair and my stylist puts so much care and attention to making sure I have a great experience. For men, Blade and Razor is a luxurious and comfortable barbershop in Toroto that caters to men seeking exceptional services. I’ve tried cheaper salons and I am always disappointed (with both the cut and the service). My hair is just a really important part of my identity (shallow as that may sound) and I’m willing to pay more money for a professional salon cut and color. If you have long dreadlocks that you want to maintain, you may shop now for various hair products.

Traveling. I don’t travel as much as I want to (both for money reasons and not having a lot of time to take off work). I try to make room in my budget for one big vacation a year (usually, a cruise) and it’s never exactly cheap but always so worth it. Traveling is something I really want to do more of, and I am hopeful with more careful spending and saving, I can.

Eating out. This is a big splurge area for me. It’s also a vice. I am trying to cut down on how often I eat out, but it’s hard, because I just really, really enjoy eating out. Sigh. Maybe one day I will be someone who is satisfied with eating out once a week, but I’m just not there yet.

A large apartment with a washer & dryer. My mom and I definitely splurged on our apartment. It’s big, with a screened-in patio, large living room, three spacious closets, and our own bedrooms and bathrooms. The appliances are updated and the apartment came with a flat-screen HDTV and full-size washer and dryer. (Also, a fireplace which is silly. We’ve never used it.) It’s a splurge, but well worth it. I love our apartment. They also have ready portable appliance inspections to check all the appliances and ensure overall electrical safety.

Cable and high-speed Internet. This is a very big splurge for us and does not come cheap, but we put both to so much use that it’s hard to imagine life without cable and Internet! We have digital TV, a DVR, and high-speed Internet. This is basically a must-have for me.

What I Save On

Clothes and accessories. I really do not spend all that much money shopping for clothes. I buy most of my clothes from Target, Old Navy, or Marshall’s. Places where I can get pants for $20 and a shirt for $15. That’s my kind of shopping. I don’t really buy into the whole idea that you have to pay a lot of money for quality clothes, because it seems like the clothes I spend the most money on are the ones that fall apart more easily. It’s usually the clothes I don’t spend a ton of money on that are the ones that last me a while. And I rarely buy accessories (read: scarves, jewelry, purses, etc.). I usually pick up one or two (cheap) scarves during the winter, and I’ll usually get one new Vera Bradley purse (that lasts me forever!) during a big sale, but that’s about it. I never buy jewelry and I’ve had my current sunglasses for 2+ years.

Shoes. Give me a pair of flip-flops, a pair of dark flats and light flats, maybe a nice sandal, and a pair of nude heels and I am set. I don’t need a large selection of shoes and I’ve never really been one to get excited about shoe shopping. If I could wear flip-flops everywhere I went, I would be totally okay with that.

Make-up. My make-up bag consists of BB cream, powder, and mascara. I can get this all for under $20 at Target and it suits me just fine. I actually really hate make-up and I wish I didn’t have to wear it. I’ve never been to Sephora, walk briskly past the make-up counters at any department store, and have been to Ulta once (and have no desire to ever go again). Make-up is just not something I really care about. And it always seems way more expensive than it needs to be.

Using my apartment gym. My apartment has a wonderful gym equipped with one stationary bike, two treadmills, two ellipticals, free weights, and a decent amount of weight equipment. It is fabulous. So long, $60 gym bill! Although I miss being able to take group fitness classes, most especially spin classes, I am more than happy and satisfied with my apartment gym. It generally does not get very full in the mornings, though the afternoons can be a different story. Along with my own set of free weights, an exercise ball, and a Pinterest board of workout ideas, I’m pretty much set when it comes to exercise and have no need for a gym bill.

Using the library. In 2012, I spent $350 on books for my Kindle. I could have just about paid for another cruise for that price. After that, I decided it was time to start using the library again. Now, I only buy a Kindle book if I am absolutely sure it is one I want to keep. For the most part, I use the library like crazy now and only buy books every other month or so. (I haven’t counted it up, but I am sure I’ve spent less than $30 on books this year! Woo!)

You tell me: what do you splurge on and save on? Does your list look anything like mine?!

This is the final installment in this little mini-series on how I’m approaching my finances in 2013. It’s a big area of my do the work theme and I’m sick and tired of feeling overwhelmed about my finances and out of control.

My money goals for this year are the following (also found on my resolutions page):

• Put myself on a strict budget and evaluate how I’m doing on a monthly basis. I plan on doing this in great detail the first weekend of every month, but also keeping a log in Google Docs with where my money is going and keeping up-to-date on that. Typically, I can go weeks without looking at my bank account, terrified to see what my balance is. That’s not helping me at all. I also have a budget template I use that breaks down where my money needs to go (i.e., bills, savings, extras, etc.) and I want to take one morning every two weeks (preferably the day I get paid) to get all the bills taken care of.
• Save at least $83 per month to have $1,000 saved by the end of the year. I’m terrible at saving so this is an area I want to work on in 2013. Having $1,000 in savings would just make me feel so much better if anything unexpected pops up. I know it’s really not enough, but it’s a start. In doing so, I have a goal of saving $83 per month which is doable for me right now.
• Pay off my last credit card. This one is being taken care of tomorrow! It has been YEARS since I have had no credit card debt on my conscience so it is going to feel amazing to have this goal done with. By paying this off (and not using it unnecessarily), this gets yet another bill off my plate which is necessary for my future budget.
• Set up a payment plan with the collection agency holding my ER bill. One of my major money goals this year is to get my ER bill completely taken care of. I’m not sure if I can get it all paid off this year, but I definitely want to make major strides with this because it’s been weighing on me for a while now.
• Spend less than $100 on Kindle books. My Kindle habit is out of control and between free book deals I’ve snatched up and a Kindle gift card I have in my possession, I don’t see myself spending any money for a few months at least.
• Buy a car. This is my biggest money goal for 2013. I’ve put this off because of money issues, but it’s apparent I really need to possess my own car, if only to give me more of a feeling of independence in my life. I don’t live in an area with a good public transit system and relying on other people is getting old. I am hoping for a decent tax return so I can put a good amount down and not have too high a car payment. I CAN’T WAIT TO DO THIS, YOU HAVE NO IDEA!

There are some money habits I want to begin this year, too. These will help me with my bigger money resolutions, and I think they’ll help give me more control over my spending.

• A cash budget system. I heard about this idea years ago and have always wanted to utilize this in my own life, but I just never had the motivation to do so. Getting money out of my bank is a pain and requires more steps than simply paying by debit card, but I know it’ll help me keep a handle on my money. My plan is to decide on a certain amount to take out of my bank account every other Friday and use that money for any extra expenses: food, entertainment, shopping, etc. I can use it however I like but once that money is gone, I’m done. If I use it all up in a week, well, I’m out of luck until my next payday. 
  
• Gift cards. Amy originally brought this idea to my attention. Basically, the idea behind this is loading up gift cards with certain amounts to give me a limit I can easily see. Once I use up the gift card, then I’m done. I really, really love this idea and I’m thinking of implementing it. I’m still brainstorming ways I can use this effectively in my life but right now, I’m thinking of setting aside a “gift card envelope”. Any extra cash I didn’t use on my cash budget system during the two weeks goes into the envelope. Whenever I have enough cash to buy a gift card, I can get whatever I want! A Kindle gift card, a Starbucks gift card, an Old Navy gift card (my weakness when it comes to clothes shopping is Old Navy). Or perhaps setting aside $1 every time I work out or hit my healthy goals for the day. I’m still figuring out how best to make this work so any advice is helpful!
• Opening up a new savings account. Currently, I have a savings account with my bank, which requires just a $1.00 minimum, but has no real advantages. It’s also very easy to transfer money out when I need it. I’m trying to decide whether to keep my savings in this account or move it to something that reaps better rewards. (And makes it harder to access!)
• Budget, budget, budget. I adapted a fun little spreadsheet from Jenny Blake of Life After College and since I get paid every other Thursday, my goal is to spend Thursday mornings going through my budget, paying bills with an online payroll portal, and putting money in savings. I want to keep a running log of how I’m spending my money because last year I could go weeks without even opening my bank account. I didn’t have a good grasp on my finances at all. This will also help in my monthly tracking.

Finances are an area of my life I know I can gain control over with a few easy steps. It’s not going to take a complete overhaul of my life like losing weight will. All it’s going to take is a tighter budget and less unnecessary spending. It’ll take me a while to get used to not spending as much (I’m already counting down the days until February and I can have Starbucks again!) but it’s completely doable and  I’m interested to see how it will affect my overall life.

Do you have any money goals for this year?