I'm not talking a diet that regulates what I stuff into my mouth. THAT diet is working just fine.
No, the diet I'm talking about is a financial diet.
I've always been pretty horrible at managing my money. Not so bad that I am counting my pennies on a regular basis, but bad enough to where I feel anxiety right before my online bank information pops up. I dread seeing that amount of money I have, or don't have. There have been many times that I log into my online banking and have a mini heart attack right on the spot. Then I scroll through the purchases to realize that I spent triple digit amounts over the course of one weekend. But I NEEDED those earrings. And those shoes? They were calling my name.
I'm sort of financially responsible. I save for retirement and put money into a fairly high interest rate savings account. I bought a house after over 10 years of throwing away money in rent payments. I don't have many credit cards and the ones I do have are either very low interest rates or very low balances.
But still. My checkbook balance is looking a little thin and it's screaming at me to stop abusing it. I'm highly abusive to my debit card especially. In fact, my debit card has threatened to stop speaking to me. And I just can't have that.
I've made a list of financial diet rules for myself in the hopes that I will satisfy my debit card and my anxiety.
- I was going to attempt the no spending money on frivolous things for a set amount of days. Then I introduced myself to myself and knew that was not possible. My willpower is to weak and Etsy.com sends me telepathic messages hourly. So I am limiting myself to $100 a month in frivilous purchases*.
- I will increase my retirement contributions 10% starting next month. I want to retire a millionaire and have hot hunky men feed me grapes and massage my crusty old feet all while admiring my immense wealth.
- I will pay off my higher interest rate credit cards by June 2008.
- The credit card that's a low interest rate but a higher balance, I will keep paying the monthly payment but increase the payment by 50%.
- I will continue to pay extra towards my principle for my house. But I'll do it on a regular basis, even it's only $5 extra.
- I will start the search for a higher interest saving's account. Currently my savings account pays 3.65% which isn't too bad, but I bet I can find better. Anyone have suggestions?
- By April 30 of this year I want to have saved $6,200 in my savings account to be used for emergencies and to sustain my household during the lean months of October through December 2008.
- Finally, and this one's gonna hurt, I will stop buying coffee in the morning on my way to work. I only spend $6.75 a week on my morning coffee, but that's almost $30 and I can apply that to my principle payments for my house.
Wish me luck and sanity as I explore this new found diet. And if you feel bad that I can't spend much money on myself, feel free to send gifts. I don't mind.
*The only exception to this will be clothing. When I hit my goal weight, which will likely be around August at the rate I'm going, then I will include clothing in my financial diet.
9 comments:
Good goals! Small steps are key.
We have an online savings account with Emigrant Direct that pays something like 5.25% interest. Online banks usually have the highest interest. Just make sure the one you use is legit.
Good for you.
Being an adult isn't fun, no, but it sure feels good.
Awesome goals, darling! I wish you the best of luck with all of them, particularly the whole credit card thing.
Todd and I went through a similar buckling down about six years ago, and though it was tough at the time, it has worked out very well, over all.
Once you get your cards paid off, you may consider getting some sort of cash rewards card (we use Citibank) and using it regularly. We charge absolutely everything possible to our rewards card, and pay the card off in full each month. Not only does that generally end up netting us an extra $300-$400 in rewards each year, but we're also able to collect interest on all of the money in our checking account each month.
For our mortgage, (and home equity loan, which you don't have) I round all of my payments off to the next higher $100 increment. It helps to not only pay down the balance quicker, but also builds in a little bit of a cushion for when the mortgage amount adjusts each year. Our payment generally goes up at least $20 per month or so each year. I CAN'T wait until we're able to get rid of our PMI. THAT will be very nice. =)
Tis better to be realistic and limit purchases than cut them out all together.
I am on the same diet. Anything you can automate, even that extra $5 on the housing payment, will help big time.
We just got done doing this. We used our tax return to pay all of our bills a month ahead. Then we save X dollars out of each paycheck to pay everything on the 1st of the month. Whatever is left over goes directly to savings (which I'm PROUD to say has well over 15K in it right now!).
We (I saw we like I actually work) also contribute 10% to our retirement fund since Dean is 100% vested right now. That's free money!
Paying extra on everything is GREAT! Be forewarned though that some companies apply it to the next months payment unless you specify where it needs to go. I paid extra on my Target Visa and the next month they sent me a statement showing I owed nothing (since I made a double payment)..sneaky credit people!!
Congrats! Oh and congrats on the diet diet too! Want to send some of your weight loss vibes this way? (if only I skipped that shipment of Dale and Thomas popcorn!!)
That is a great kind of diet to be on. I'm not very responsible when it comes to spending, so Jon has successfully reeled in my naughty habits alot since we've been married. Luckily I have thrifty taste, but I still spend money kind of frivolously. Good luck, hon! :)
Sounds like a good plan to me! I wish I could be as good as you. I'm trying to be better, but I need to find a better paying job so that I can pay off more on those credit cards and student loans!
Those are great goals! I know you can do it. I still recommend ING, it's working wonderfully for us.
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