I’ve shared some of my financial background, so I thought this would be a good time to talk about how and why I decided to go from rabid spending to writing a blog about getting out of debt.
My divorce should have been the catalyst for a change in my thinking, but it wasn’t. My parents bought a house, which my dad and I spent months remodeling ourselves, for my son and me to move into. I did spend the first few months with no living room furniture (I waited for my tax return), but beyond that I spent just like I always had. I convinced myself that I could afford to do what I wanted without my ex spending us into oblivion. What I failed to do was acknowledge my own contribution to the financial problems in the marriage.
In my first year post-divorce, I can’t count how many times I needed my parents’ help to cover an overdraft fee or gas money until payday. In December 2010, exactly a year after the divorce was final, I realized I was about to turn 28 and still throwing money down the toilet, and I realized there wouldn’t be a Prince Charming to come rescue me from my financial problems with his magic bank account. I also realized my ex will never better his situation (he lost his home to foreclosure after failing to make a single payment after I left) and it’s up to me alone to make sure my son is taken care of.
So I opened a new bank account to escape my local bank’s 1990s interface. I set up auto transfers to savings. I opened a Roth IRA because my employer doesn’t offer a match on its 403(b). And I made a budget. In that moment, staring down the money I was throwing away every month, I decided I was never living like that again.
I have done a lot of small things to cut expenses in a big way. A promotion from Comcast lowered my cable/Internet bill from $110 to $45 for the next six months. I changed my AT&T plan and cut $30 off my mobile bill. I increased my car insurance deductibles (now that I actually have money in savings in case of emergency) and saved $120 every six months. I have also started taking frozen dinners to work – $3 a meal is much better than $10+.
Most important, I’ve stopped justifying purchases. When I see $20 extra in the bank, I move it to savings instead of buying something. If I want something, I save for it. Beyond that, I only spend on bills, gas, and groceries. And it’s amazing that I have nearly $800 in savings, the first time I’ve ever had savings in my life.
I still have a lot of progress to make, but I’ve made a conscious decision to stop the bleeding in my financial life. What things are you doing? What have I missed?