So I’m going put some ground rules for myself here in “print” where I can read them, remember them, and hopefully abide by them.

1.) NO credit cards for the duration of this exercise unless it’s an absolute, unavoidable emergency. No using them to pay for my odds and ends at CVS, or for subway fare, or at Starbucks, or anywhere. NONE!

2.) All bills will be paid on time, even the ones like the cable bill that I think don’t matter because it doesn’t really count on my credit score.

3.) I will make coffee at home before I leave for work, and bring lunch to the office using the groceries in my fridge.

4.) Dinners out will be limited to the weekends, and only if I’m going out with friends. No more stopping on the way home or ordering in for takeout.

5.) I will stick to my budget and not cut corners on the amount of money I have determined I will pay for each debt every month. The only time I’ll deviate is to pay MORE money towards a debt.

And that’s it – my 5 commandments for reforming my financial life. I feel like I should have them stitched into a pillow or something. Hopefully this’ll keep me a little more disciplined.

I suppose it’s almost the same with my financial life. During my twenties I completely gutted it, spending with reckless abandon and not even realizing or acknowledging that I had a problem. I also didn’t really seem to care about what would happen when all of this would finally catch up to me. The awakening has now come in my thirties. I spent the first few months scared straight but clueless about how to really fix it all. I’m the kind of person who wants a quick fix for things, rather than following through with some sort of long and arduous commitment. At the onset of this I said I was going to commit a year to slashing my debt and fixing up my awful credit score. The first two months were marked by a great deal of discipline, the second not so much. But if I really do want to make a change, I have to stay on this course for the next 8 months. I want to be able to see the difference a year makes, and to do that I have to get focused again.

It’s not always going to be easy. There are going to be weeks like this one where I feel like I’m never going to dig out from under. But once everything is fixed and in order I’ll never have these anxieties again. The debt will be gone, the records will be straight and I’ll be able to start living like a grownup — a grownup who posseses her own financial freedom and isn’t bound by her bills each month. A grownup who puts money in a savings account for her future. A grownup who has control of where she goes and when, how she makes her money and where she spends it, and isn’t constantly worried about the next bomb in her mailbox.

Back to business. Back to basics. Back to extreme financial discipline.

Because each and every time I think I’m about to emerge from one hole and get back on solid ground, something comes along a kicks me in the face. I can’t even savor the satisfaction of paying off my big, scary bill last week because I got double-charged for it — and I’m not getting the money back for at least 60 to 90 days. Just in time for the holidays!

I’ll admit, I should have just waited for the money to be deducted from my account as part of the automatic payment plan I set up. But the fear was enough to force me to pay early. I thought I was doing the right thing. The payments ended up crossing on the same day. The good news? They tell me I have a zero balance as of today. The bad news? I’m out 700 bucks until at least February. They tell me that the payment has to “cycle through the system” and that they have to determine I don’t owe them anything else before they can refund it. I’m so boneheaded. I wish I could go back to last Thursday and stop myself from making that payment.

So now once again I have to scrimp and save and make sure my other bills get paid on time, even though that extra 700 dollars was supposed to be my “fun money” to buy gifts and enjoy the holidays. So much for trying to do the right damn thing and pay early.

I think I fully realize that the key to solving my financial problems is greater discipline. But this time of year makes it so impossible to stick to any kind of budget. First off, I’m a generous person by nature. I like to give my family and friends tokens of my appreciation of their love. Second, the retail industry is so aggressive on TV and everywhere else that you feel like an outcast if you’re not swept up in all of the holiday shopping craze. Even though the economy is so bad that no one should be spending!

Maybe the best thing I can do for myself is to stay away from the mall, and do all of my shopping online this year. And I also have to get it into my head that I just can’t be as extravagant as I have in the past. That means scaling down the list of people I give things to, as well as the amount of money I spend on those who I decide to give to. I’m also going to skip sending Christmas cards this year. It’s just another item that’s overpriced and I have to buy the stupid stamps to go with them. Between Facebook and email I can reach enough of the people I want to without the extra expense. I’m going to make my list this weekend so I can start shopping online, and not get stuck later having to run out and buy gifts because I missed a shopping deadline. We’ll see how it goes!

]]> http://thescarletd.wordpress.com/2009/12/05/the-most-tempting-time-of-the-year/feed/ 0 thescarletd http://thescarletd.wordpress.com/2009/12/04/two-months-in/ http://thescarletd.wordpress.com/2009/12/04/two-months-in/#comments Fri, 04 Dec 2009 02:42:11 +0000 thescarletd http://thescarletd.wordpress.com/?p=99 ]]> Well, it’s been two months since I started my debt diet, my financial fitness makeover, my own personal fiscal reform. On the positive side, the second month went much faster than the first. On the negative side, I’ve cheated more in the second month than I did in the first.

In terms of successes, the big scary ugly bill that got this whole thing started is now within striking distance of being paid off in full. I’d set up a monthly payment plan to get it done and that was supposed to stretch over a period of six months from when it “officially” started on November 15. But I ended up throwing a down payment at it plus a host of other unscheduled payments and after my next paycheck, it will officially be gone. That will be one less thing to worry about, yet there is still a long way to go.  A very, very long way to go.

Over the last two months I’ve gone for long stretches where I firmly realize that I can live with less. And in the last week or so I realize that I’m just a person who wants more. I feel like I make a decent salary and there are certain things I deserve to do for myself. The thought that I have to keep steadily hammering into my head is that if I just tighten the belt for a single year of my life, I’ll be able to enjoy things a whole lot more with those financial obstables out of my way. I just think of all the wonderful things I could be doing with my money if I didn’t have to devote such a significant chunk of it each month to credit card bills and loans — amazing trips and the like.

I watched a BBC documentary on binge drinking tonight, and one of the main things they focused on was that these people who were drinking so much, often underestimated how much they were really drinking and how much damage they were really doing to themselves. I suppose the same thing went for my spending. Each time I plunked down a credit card at a store, I often underestimated how much I was going to be spending. And each time I missed a payment or let the bills add up, I underestimated what kind of negative impact it would have on me later in life. I suppose it’s completely accurate to say that — much like a party girl binge drinker — I’m paying for the mistakes of my 20s in my 30s.

My primary attitude towards my spending over the last week has been: I deserve this. I had a near-catastrophe in my relationship (that still has the potential to become a full-blown catastrophe) and my attitude towards meals out, extra coffees and pampering beauty items has been, “I need this because I need to feel better about myself right now.” But in stopping myself from the last week it’s like, wow. I was doing that for YEARS. No wonder I’m in this position right now!

The one thing that’s put me back on track is remembering how good it’s felt to accomplish my goals. I looked back and realized that I’ve put $3500 towards one particularly nasty bill in less than two months, in addition to all of the other bills I’ve paid on time. And that’s pretty satisfying. Can you imagine if I keep doing that over the next 10 months like I set out to do? How can I even think about stopping now?

So my goal is to get back on track. And that one big, ugly nasty bill? It’ll be gone by the middle of December. I’m just going to keep plowing through and doing that debt by debt by debt until they’ve all been slayed. It’s such a good feeling! Moving onward and upward!

I really have been altering the way I look at my bill paying. It used to be, pay the minimum on everything, and use the rest of my paycheck for new clothing, new purses and shoes.  But this whole experience has showed me that if I’m disciplined, I can get some of these bills out of my way and out of my life. For example, this very laptop I bought through Dell a few years ago is on a payment plan, automatic withdrawal of $34 every month. Now how   pay off a computer at $34 per month? How ridiculous — to be paying that interest. Money just absolutely wasted! It makes me so mad that I was so careless. That laptop bill is one of the smaller bills that’s at the top of my list to get paid off immediately, along with one credit card and at least one student loan.

The upside of all of this is that I’ve felt more focused and disciplined lately. Even though this is, like, the lowest I’ve been with this whole thing dragging me down, at most times I have this incredible determination to dig out from underneath all of it. Before this, I would just scatter money everywhere, and as long as I had at least a dollar in the bank the day before payday, that was okay. Now I’m forced to account for every dollar and every dime and it’s really making me more focused in everything I do, which is a good thing!