Thursday, November 8, 2007

Where Am I Now? – Part III: The Odd Effects of Living on a Budget and Paying Down Debt

I knew that after such a serious change in attitude and behavior, my life would be significantly different. I've been living frugally and paying down debt for about three months now, and many of the changes I expected to occur have occurred.

  • I definitely feel less stressed out when I think about money
  • I no longer pay late fees or a bank fees
  • My total debt has decreased
In addition to these, there have been a few oddities, things that seem almost counter intuitive but have happened just the same.

The biggest effect has been that I have more money to buy what I need/want, and I feel no guilt when I buy frivolous things. When I started all of this, I fully expected the opposite effect: that without the use of my credit cards, I'd never be able to buy stuff I wanted, and if I did, I'd feel guilty about spending the money on stuff instead of paying down debt.

In actuality, the budget has been immensely helpful in letting me see the big picture of where all of my money is going. It has enabled me to make accurate decisions about spending, with all the facts in mind, so there's no worry or guilt. I’ve stopped randomly spending money on a bunch of stuff I didn't need or even want very much, I have a lot more money for things that I do want and need.

One specific example of this was a haircut. I’m not fashion or beauty conscious in any sense of the words. I’m a jeans and t-shirt girl (if the t-shirt has a comic book character or symbol on it, all the better), I rarely wear make-up, I don’t use product in my hair, etc. I do, however, need a haircut once in a while, but since I’m not into that kind of stuff, I don’t think about it very often, and pre-financial revolution I spent so much money on crap that I never felt like I had enough money for one. Talk about priorities out of whack. When I had my financial revolution, I hadn’t had a haircut in about eight months, and I needed one pretty badly. I put it in the budget, and voila, I got a haircut. It felt very strange to go to the salon knowing that I not only had enough money, but that the money was best spent there and not anywhere else.

Another odd effect is the amount of mail I get from credit card companies. I consolidated and/or paid off my credit cards, so the number of monthly bills went from 5 to 2, but I actually get more mail from my credit card companies now. Sometimes three or four offers a day. They miss me! They want me back! They'll give me all sorts of *special limited time only* offers if I'll start spending their money again. Consequently, my shredder has been making itself very useful lately.

Before my financial revolution, for some reason I equated cheap food with unhealthy food, but that's not always the case. In season produce is some of the cheapest food around, and grocery shopping in general is WAY cheaper than eating out all the time, especially if you shop the sales and don't let food go to waste in your fridge. I’ve lost a few pounds in the past few months, and I feel a lot better about myself for it.

My Mother
My mom is a math-brained person. She’s worked in the tax and/or payroll field for over twenty years, and if I had a nickel for every time I’ve whined for help from her on financial matters, I’d be a millionaire. Lately, however, she’s been asking me for advice. I helped her set up a budget and she and my dad have done very well sticking to it. We’ve also had conversations about frugality, retirement savings, investing, credit card vs debit card vs cash usage, etc. Over the years she’s often complained that my sisters and I are all art-brained people like my dad and that she feels left out sometimes, so it’s been really neat to share this stuff with her, and I think it’s brought us closer.

These few odd things are only some of the positive effects I’ve noticed as a result of my financial revolution. This whole journey has been an eye-opener for me, and I’ve been so blessed through it that I often wonder why I spent so many years thinking that finances were too difficult to understand.

This post is part of my Financial Revolution Series, which is my personal financial story. Each post gives a piece of the story, detailing how I got into debt and how I turned things around.

Next Time on TVG&M: Goals


Matt and Carol said...

Isn't the lack of guild wonderful?!?!

Today's my birthday and I want 3 seasons of one of my favorite shows. I already have S4 and S5 is on the air now. In the past, I would have felt incredibly guilty about spending the money on myself. I would have spent it on groceries or something. But since we're out of consumer debt, I have no guilt whatsoever about it [okay, maybe a twinge, but that's it]! And I need new pants and I don't feel guilty about not spending my birthday money on them but rather spending budget money to buy a couple pairs of pants! It's wonderful!

Am so proud of you!

Matt and Carol said...

Okay okay - that should be lack of GUILT...