I wouldn’t say I worry a lot about money, but I do think a lot about money. My current life situation has me experiencing a very empowering surge that is motivating me to work on all of those things I’ve beat myself up over for so many years. One of them, as you can tell from this blog, is Housekeeping. The other, is Money.
Like Housekeeping, I’m not where I fantasize of being when it comes to the myriad factors that make up Money. But I constantly work on it, fine-tuning as I go, trying to let the setbacks be mere stumbles versus landslides, and so on. Most recently, I’ve had a couple of “a-ha” moments I thought I would share. As with so many things in life, my epiphanies were pretty obvious. Likely, I’d heard them in some sort of variation or another a million times. But, as usual, they just never clicked until now.
My first issue with money is sticking to a budget. I tried a million and one methods of budgeting but every month I blew the budget in one category, or seven, and was fretting and fussing about my dwindling dollars. Now, I have to say at this point in my life, this is not disastrous. I have managed to create a system that allows me to pay every single bill on time, dumps money into my retirement savings, and deposits money into a savings account that is very difficult to see let alone access. So, I’m not blowing every single dollar in a reckless fashion sacrificing one bill in favor of another. The biggest frustration of this experience is that I feel like my money and my spending impulses control me instead of the other way around.
It was a member at the Get Rich Slowly forums that helped me click things together. The poster guessed, correctly, that I either had no goals or very flimsy ones. I knew he was on to something but I’d sort of tried goals before and I didn’t really find much help in the system so how could I make this different? It took me a few days of having this pesky little thought swimming in my head. It’s actually a problem I find exists with my life in general, not just finances. I have seldom been a very goal-oriented person preferring to instead live life by the seat of my pants except I have recently figured out this sort of system usually ensures life’s going to have its way with you and laugh through the whole process.
My first attempt at goal-making was to open a word document and start typing. Then, about eleven words in I thought that was just stupid and closed it. Eventually I opened my budget spreadsheet, made a new tab for savings goals, and started typing the types of things I’d like to save for. Then I added columns for the amount I’d like to save up, by when I’d like to have it, and what I could do to get there. This has proven to be quite useful because it puts it in close proximity to my budget which is good for reference and reminding. And it triggered the second financial epiphany I had.
Now, this is going to be astoundingly stupid to many of you, and I felt astoundingly stupid when it dawned on me, but there is a difference between Saving Money and Setting Money Aside. I realized this when I worked on my list of financial goals (not yet complete, but is it ever?) and saw that, after the emergency fund, the other things I had listed were basically big-ticket (anything over $100 is apparently the magic number) items. Apparently, my brain lumped these things together and I equated setting money aside for big ticket items with building up a savings. Of course, this is pretty silly and explained why I had a hard time maintaining and building my Emergency Fund.
So I made a conscious decision to go ahead and separate the two. I increased my automatic credit union (my true emergency fund account) deposits to 10% of my paycheck. Then, I proceeded with figuring out how to plan for and set aside money for big-ticket items.
Because a separate account seems to work well for me, I think I might go that route to help me set money aside. Alternatively, I could stash cash around my house in an envelope, jar, or some other method. The point is now that I have them written out and they are in the same workbook as my budget spreadsheet, I will be able to constantly review them and account for them in my budget. I will also make some sort of visual representation of my goals and keep it somewhere I can see it often. I have a cute bulletin board that is empty at the moment that would serve this purpose well. Hanging it in my office should motivate me to clip coupons, curb online shopping, stop myself from pulling out the debit card from its drawer, and so on.
Lastly, one more trick is being employed at the moment and it was also thanks to a poster at the forums. Instead of budgeting my discretionary spending categorically, I’m scrapping that and lumping it into one giant category. I think most of my stress comes from knowing I can only spend x amount of dollars and x on groceries and x on gas and so on and so forth. I have what I have after bills. I do with it as I see fit. I’m a grown ass adult and I think I over-thought things with too many categories (i.e. limitations). So, this is my cash on hand amount and it is what it is. It allows me to leave the debit card at home and removes guilt from borrowing from one category to fund another but it also scares me enough to carefully consider my purchases.