Have you ever read Confessions of a Shopaholic? I’m not a shopaholic, at least not in the typical sense of the word – I don’t own a lot of clothes, shoes, or things. But the main character and I have something big in common – we know a lot about finance, even worked in the financial field and are pretty bad at managing our own finances. We can give people GREAT advice about it, in fact, I’m the one my closest friends come to for sage financial advice. But do I follow my own advice?
Fiscal responsibility is something I have struggled with ever since my mom was giving me allowance sporadically when I was a teenager. She would hand it to me and I’d run straight to the candy lady’s house for frozen cups, chips, and those big lemonheads without a single thought of saving any of it for future desires…which is crazy since, like I said, allowance was hella sporadic.
I’ve gotten better over the years, but I’m still that girl. Being fiscally responsible is not something that comes naturally to me. It’s something I have to actively work on and something I often fail at.
I have actually accomplished some really awesome financial goals in my life – I bought a house on my 31st birthday, I currently have a significant amount of equity in that house, I have very little credit card debt (by very little, I mean about $5,000) and from August 2017 to April 2018, I paid off $38,000 in business debt. You read that right, I paid off almost $40,000 in debt in 9 months. CRAZY right?
While I’ve accomplished some pretty great financial goals, I want to share some of the things I constantly struggle with when it comes to my finances.
I spend money indulgently and RECKLESSLY
There is something in me that feels like “it’s my money, I should get to spend it how I want” and says “life is about having fun, it’s not like you can take the money with you” and so I end up shrugging my shoulders, saying YOLO and swiping my debit card like it’s attached to Jeff Bezzo’s bank account.
But this goes deeper than just spending money frivolously, the bigger problem is spending money impulsively. Usually when it happens, it’s in the moment. I’m not giving it any real thought, I’m not considering the other things I can’t pay for if I buy this thing. I’m only thinking about this thing I want right now that’s in front of me.
I have a bad habit of looking at my bank account and saying “ooh there’s money in there” and then, of course, spending it. I remember telling one of my close friends that I “act like my account needs to be at zero to make room for more money to come into it”. I’m sure I’m not the only person that has or had a habit of spending all of their money and finding themselves barely making it to the next payday.
I donate money to the bank
I’m gonna get REAL transparent with ya’ll. In 2013 and 2014, I spent and average of $2,200 in overdraft fees (per year). It’s embarrassing. I struggled with whether or not I would share that, but like I said, we’re being transparent here.
I know a lot of us who have done this. We go to the gas station, knowing we only have $15 left in our account, we swipe the card and pray it goes through, it does and we rejoice and commence to filling our tank up with gas, which runs $36.74 and happily head on to our destination feeling lucky we got approved not even realizing that it just cost us an extra $35 in overdraft fees to do that.
Or, you check your account and see that you have a little money left so you go ahead and spring for a quick fast food meal, forgetting that you have a bill hitting the next day which is now going to put you in overdraft and cost you an extra $35.
Now make things like this a regular habit and you’ve spent $2,200 in overdraft fees without even realizing how fast it all adds up. That’s a $2,200 donation to the bank. Money I could have used to pay off my credit card or put into a 529 plan for my daughter. I’m getting angry about it all over again.
Although these are some embarrassing facts that one usually keeps to themselves or a select few, it honestly felt good to share this with you. If for no other reason than to say it out loud so I can fix it. My hope is also that if you have these flaws, you know you’re not the only one. You can stop beating yourself up about them and, instead, do something to change them.
Where I’m getting help: The YNAB app
You Need A Budget has been an AWESOME tool for helping curtail my spontaneous spending and getting me to focus where my money goes.
With the YNAB method, every dollar has a job. As soon as money comes in, you assign it to a category, even if that category is DON’T TOUCH THIS MONEY, lol.
Seriously though, this app has been a complete mindset shift for me from forecasting (which is technically what traditional budgeting is) to actually budgeting the money I have on hand and being honest about the fact that if I spend $20 on eating out, that’s $20 I can’t spend on getting my nails/hair done or $20 that won’t go towards saving up for the Away carry-on bag I’ve had my eye on.
I no longer look at my bank account to see if I have money to spend. I check the YNAB app to see if I have money left that I budgeted to spend in a particular category and if I don’t, no biggie, I can decide if I want to spend less on another category to make up for it. For example, let’s say I have a Personal Grooming category (nails and eyebrows need to be accounted for in the budget, am I right?) and a Clothing category. Say I’m walking around Zara and see a really cute dress that I just feel like I need to have. The dress is $75 but looking at my YNAB app, I only have $50 remaining in my Clothing budget. I scroll down and see I have $50 remaining in my Personal Grooming budget. I decide I can do my nails at home, so I’ll move the $25 over to Clothing and boom, I can buy this dress, no problem! I’m safe from overdraft fees because the only money I can budget is money I already have.
It truly is a great way to budget.
If you’re like me and have some pretty crappy financial habits, I do encourage you to do something about them. Try out YNAB for free for 35 days by signing up here –> SIGN UP FOR YNAB
I will warn you, the app is a lot of work. I personally need a lot of work to become more fiscally fit. It’s also a mindset shift from the way we know to budget. I also needed a mindset shift to reach my financial goals.
Here’s to conquering our financial flaws!!
Please note, the links in this blog post are affiliate links. That means, should you choose to sign up, I get a small bonus for referring you. It does not cost you anything extra, it’s just their way of saying “thank you for sharing the good news”. Also, I assure you, I would not share it if I didn’t love it myself. I hope you love it too!