Some things I have:
- a full-time job with a good income
- just over $20,000 in personal debt
- great credit nonetheless
- some counterproductive neuroses about money
In other words, while on paper my income should slightly exceed my expenditure, in reality, I usually spend at least the last few days of my pay cycles living off my credit card. Of late, that period has been extending itself, which is doing me a concern.
I’ve always felt a lot of anxiety and helplessness around money, and coped by not thinking about it. I’ve taken it for granted that I will always be in debt, always be just short of having enough, because that’s just how life goes.
BUT. Lately I’ve also been examining other assumptions about my life, and realised that they’re not written in stone. For example:
Assumption: Physical fitness will always be beyond me.
Reality: Since recovering from my broken foot, I’ve been walking a lot more to exercise it. Now I can walk up hills without breaks! Now I’ve started going to yoga classes as well.
Assumption: I am too uncoordinated and fat to do well at any organised activity, and everyone would just laugh at me if I went to a class.
Reality: Friend of No Award Zoe introduced me to Chunky Yoga, which is extremely beginner friendly, full of adaptations for fatness, fitness and movement issues, and completely free of body shaming. The instructor encourages me to try challenging poses that I thought would be too hard for me. It’s delightful.
Assumption: I am just incapable of keeping plants alive.
Reality: I’ve kept a catnip seedling alive for ALMOST A MONTH! There are also some strawberry seeds in a pot, but who knows what they’re doing down there.
It turns out that certain immutable aspects of my reality are in fact wrong! This has been an amazing, life-changing revelation. And it has nothing to do with putting energy out into the universe or bootstraps — more the opposite, in fact: I decided to try things I’m not good at, and told myself it was okay to fail.
It turns out that you can achieve amazing things when you abandon perfectionism and the procrastination that accompanies it. You might literally fall on your face (I … don’t have great balance yet), but it turns out that your life won’t actually come to an end. Failure is not a reason to quit.
Which brings me back to my financial issues.
Recently, Alison at Ask A Manager (one of my all-time favourite blogs) did an interview with a budget and money coach. Although her work is mostly with freelancers, the comments — which are nearly always worth a read — made me realise that my financial situation and attendant neuroses are actually pretty common. It turns out that the internet is full of budgeting and debt-reduction blogs aimed at young women with white collar jobs and substantial debts.
Of course, most of them are terrible. Common features and lowlights:
- More inspirational graphics than actual content
- The ultimate frugality role model is, apparently, Kate Middleton, because she recycles outfits and decided not to hire a stylist. Also, you know, her day to day needs are paid for by the British taxpayer.
- Making your own soap and clothes will absolutely save you money. Really.
- Obviously you already have a side hustle, but have you considered … a third job?
- You need to sell that car you definitely own.
- And stop buying $500 shoes, which is indeed a thing that all women, everywhere, do.
- Weight loss metaphors.
- SO MANY WEIGHT LOSS METAPHORS
- You already hate yourself for eating, right? But what if you also hated yourself for spending money?
- Shame: the ultimate motivator!
Sooooooo … I’m taking them all with a few grains of salt. Instead, I’m creating my own plan, based on my own needs. Here’s what it looks like:
- I created a budget. No, I didn’t have one before. (This is a judgement-free environment, people!)
- There are lots of budgeting and money management apps out there, but I decided to go with a basic GoogleDrive spreadsheet. For one thing, most of the apps are US-based. For another, I do most of my bill-paying and so forth at work, so I’d rather not have to pick up my phone to look at my budget.
- I have several worksheets: one overview of income, expenditure and debt, a monthly breakdown, a fortnightly breakdown (in line with my pay cycle), and a fortnightly budget that includes one-off expenses.
- I considered rolling my credit card debt over to a card with a 12-month interest free period, or consolidating it into my personal loan, but decided against that. My current card has a very low interest rate, and I’d actually like to keep it after it’s paid off, in case of emergencies. (Proper emergencies, like my MacBook exploding, my fridge or washing machine dying, or the cat needing surgery. As opposed to, you know, “I just bought cut flowers and then realised that I don’t own a vase.”)
- One of the areas where I struggle is in putting money aside for monthly direct debits. Especially if it’s a bigger expense, where I really should be allocating money fortnightly.
- Solution: I’ve changed all my direct debits to be taken from my credit card instead of my bank account.
- In my budget, I highlighted everything that’s coming from my credit card, and created an entry: $$ for CC. That’s the total I’m putting on the card each fortnight, including an amount considerably in excess of the minimum monthly payment.
- I’m being realistic about my needs. For example, I often don’t have the energy to cook during the week, so I’m including some frozen or convenience meals in my grocery budget. I’m also not cutting things that are important to me, like my Netflix and Spotify subscriptions, or yoga. (But I am taking advantage of deals, like Chunky Yoga’s “unlimited classes for $39” offer — that’s September paid for right there.)
- I also accept that there are going to be fortnights where I won’t be able to put so much money towards paying off my credit card — for example, the soles of my work shoes are wearing out, so I’m going to need new ones soon. I also need at least one new short-sleeved shirt for work.
- I’m cutting back on “fun” spending, like art supplies, books, DVDs, nail wraps and homewares. But I’m not cutting them out all together.
- I am cutting back on impulse purchases, though, which are a really serious weakness of mine. No more diversions through Kmart on the way home!
One piece of advice the blogs get right is this: learn what your spending triggers are, and find strategies to deal with them.
I spend a lot of money on eating out. My spending triggers there are:
- Hanger and low blood sugar — especially after yoga
- Engagements that take place around meal times, especially evenings after work
- Gave my friends a heads-up that I’m doing this, and may accordingly decline invitations, depending on my budget. My friends are great, and promptly moved an upcoming brunch from a cafe to someone’s home, but I don’t expect them to do that regularly.
- Carrying snacks in my handbag and yoga bag
- …I’m still working on this one
The problem with the third trigger is that I already take my lunch to work, and I don’t relish the idea of carrying two meals.
I’m contemplating things like “discounted sushi from places that are about to close”, but I’m also open to suggestions if anyone has any! Alas, my gluten intolerance has been problematic lately, which rules out a lot of cheaper options.
If I stick to this plan, and my fortnightly budgets, I should have my credit card paid off by Easter next year. Possibly by Christmas, but I’m trying to be flexible — and the holiday season is traditionally a busy time for my credit card anyway. But once the card is paid off, I can double the amount I’m putting on my personal loan, and still have a fair amount extra. I might even be able to pay off my loan in another year.
But I’m also open to the possibility that I’ll fail at some point, and that it might take longer. And that’s fine! My bills always get paid (mostly on time, even!), my credit is good, there’s no financial emergency here. And, if I keep this up, there never will be.
(Touch wood, something might still explode, or the cat might burn down my flat. Just because I know I’m catastrophising doesn’t mean it doesn’t happen!)