Tuesday, February 15, 2011

Month 2: No to Financial Powerlessness

Month 2 of the Year I Said No is a month of regaining control over how money is spent by turning away from the situations and habits in which I lose power over my financial life. Something about that wording sounds like a 12-step program, and that’s not intentional. But yes, I do need to admit that I have a problem and seek help, and also to take serious inventory of what I have and what my habits are. I think that’s 3 steps’ worth right there.

The month started well. Tom and I met with a credit counselor, who helped identify some problem areas in our budget. A common mistake? Not categorizing expenses. Our “miscellaneous” category for tracking costs was a huge catchall born mostly out of laziness, with a hefty dash of denial: haircuts, random day trips and museum visits, books, coffee, snacks, and meals purchased on the road (nearly a daily expense for Tom), to name a few.

Also, we apparently spend at least $300 more per month on groceries than a typical family of 3 (we were told $700 could be more than enough). We have only just started to make a weekly meal plan, a weekly shopping list to go with it, and plan to stick to a predictable day for shopping for only items on the list.

How can 2 smart people be so dumb about money? My theory is that long after some money I had when I was young dried up and long after Tom stopped being a salaried worker, we continued to act as if our coffers were full and Tom’s income was regular (and quite large!). It’s called denial, and it’s caused a vicious cycle. We must work hard to stay on top of the mountain of credit card debt, this hard work makes us too tired to have the wherewithal to plan, and we pretend all these little expenses, like another meal out, are justified by our hard work and besides don’t add up to all that much.

Already I see we’re making some mistakes on our new budget, which looked quite lovely on paper. Check out this short column on what NOT to put in “miscellaneous”. 

And these 73 tips on debt elimination are a nice mix. I like that they are not all boring budget tips; some are attitudinal adjustments; just as important, I am finding out!

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