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My Best Financial Advice – Take Control

financial control

I received an email earlier this week from a reader who is really struggling to break old habits and stop the financial bleeding in her life.

What’s the number one piece of advice you would give someone who just can’t seem to get it right when it comes to money?

It scares me a little to think that someone would approach me for advice – in my head, I’m still the same spendaholic I always was. But then I think about where I am now versus where I was, and I realize that financial kickassness (is that a word?) is relative. To me, I still suck at many things where money is concerned, but to someone in in the mode I was in before, I might be doing really well.

Let’s Talk Some Smack

I don’t know anything about the person who emailed me – just that she is having a hard time and looking for advice. She didn’t send me her bank statements or security footage of what goes on in her house, so I won’t make assumptions about her life based on the short email she sent.

Instead, I’ll just discuss my ex-husband. *rubs hands together gleefully*

Honestly, I try not to badmouth him too much – we’ve been divorced for three years and it’s none of my business what he does (except where our son is concerned). But he exemplifies what happens when you don’t make good financial decisions, so in this case he’s an easy target.

Please note: When S and I were married, we were nearly identical in terms of our spending (terrible) and saving (nonexistent) habits. The difference? I grew out of it and he didn’t. This man is nearly 34 years old and is constantly broke, whining about money, overdrafting his bank account, paying late fees… All the things I used to do before I got over myself.

When I get paid, these are the kinds of thoughts that go through my head:

  • What bills are coming up?
  • Are there any events (oil changes, birthdays, weddings, etc.) this month that I should be saving for?
  • How is the grocery situation in my house? Do we need stuff?
  • Does the business need anything urgent?

When S gets paid, these are the things he thinks about:

  • ZOMG MONEY! I’m going to go out to eat and buy some clothes before it’s all gone!
  • Hey, the game I play on Facebook is having a 2 for 1 sale on random points/coins/whatever! I better jump on that!
  • McRib is back!!!!!!!
  • Wait, where’s all my money? I just got paid; I should NOT be out of money!
  • Damn the bank for sending my scheduled bill payments! Now my account is in the red AND IT’S ALL THEIR FAULT!

This is a true story – I saw my ex mother-in-law the week of Christmas and she immediately started complaining about giving S money to clear up a bounced check. “I told him he better quit that online banking crap,” she told me. Um, what does online banking have to do with anything? I know what she meant; his bills are scheduled to be paid automatically on their due dates (thanks to me setting them up that way for him), so I’m sure something came out and he didn’t have money to cover the check he wrote. But why hate online banking for doing what it’s supposed to do? He’s the one who didn’t leave enough money in his account to pay the bills!

Spend Too Much? You Don’t Have Control

Most people who are drowning in debt and overspending have the same philosophy when it comes to money. (And I feel qualified to say this because I’ve been there.) They feel like they are just a miniscule, helpless blob floating in a sea of paydays, bill payments, and unexpected emergencies – there’s nothing they can do about it except hang on for the ride.

That’s how my ex-husband looks at things, and that’s how I looked at things when we were married. In our minds, all we could do was go to work, earn our paychecks, and hope that the money lasted until we got paid again.

It never occurred to us that we could actually decide what happened with our money, or that we had the power to change our perpetual cycle of broke, weekend millionaire, broke, weekend millionaire. That’s just the way things were and we were too entrenched in the cycle to change anything.

Except there were plenty of things we could have done. I learned about them when I got divorced and decided I was tired of never having any money. I’ve even tried to explain to S (multiple times) how he could end up in the same place I am now – not perfect, but much better than I was. But he’s not willing to give up his wimpy “I can’t help it” mindset; therefore there’s nothing anyone can do to help him. Except bail him out, as his parents have been doing for years.

Want Control of Your Money? Here’s How to Get It

It is surprisingly simple to take control of your finances. It’s not easy to change your mindset when your entire way of life revolves around being broke, but it can be done if you really commit to the steps below. (Kind of a fake it til you make it kind of thing.)

1. Figure out where your money goes. If I had a dollar for every time I’ve said this in the past 2 years, I could probably pay off the rest of my car loan. You have to know what you buy and what bills you have, even if you don’t really want to know. That was my problem – I would get completely overwhelmed when I looked at the big picture. Why? Because I spent more than I made, and when I saw the outflow of money against my income, my brain would shut down.

Even worse, I was guilty of creating an idealized picture of my spending. “Well, I’ve spent $300 on clothes each month for the last year, but that’s not typical. Now I have all the clothes I need so I can leave that out.” No, you can’t. You can’t sugarcoat what you spend – you need to look at your bank statements and be completely honest with yourself.

2. Decide what you can really afford. When I created my single mom budget a few years ago, I had to prioritize my spending. Food was first (because there’s no way I’m missing a meal), followed by shelter (rent/mortgage and utilities), necessary clothing, and transportation. Then TV and internet (again, being honest with myself), then debt repayment.

You know what I found out? I really couldn’t afford much by the time I paid all that stuff. So why the hell was I spending hundreds of dollars a month on other crap? Because I had never ever taken the time to compare the necessities against what I earned.

3. Stop buying extra stuff. At least for awhile. OMG this was the hardest, shittiest thing I ever had to do. No going shopping, no grabbing random stuff in Target “because it’ll look great with my house,” no ordering stuff from Amazon. But I had to. I had to experience a few months of paying only the important stuff to know what I had left to spend. As I did it, I learned that I actually had more money than I thought, but I never knew because I was spending it “only $20″ at a time.

When I first decided to go on a six-month spending fast, I had plans to reward myself at the end with a day of shopping and a meal out with a friend. The funny thing was, by the time I got to the end of the six months, I really didn’t want that anymore. It was cooler to me to have money in the bank for a change. Control.

The Bottom Line

Some of you are reading this going, “Well, she doesn’t live my life. She doesn’t know my circumstances.” Nope, I sure don’t. All I know is that the only way you can change your finances is to control your money instead of letting it control you. People who have money only have it because they’re in control; the rest is just details.

I have never met an overspender who actually followed the three steps above without seeing improvements. I’ve only met people who were so addicted to the chaos of being broke that they never tried in the first place. It’s up to you to decide which path you’ll follow.

About Andrea Whitmer

Andrea is a freelance web designer and single mom trying to maintain a sense of humor in an otherwise chaotic world. She blogs in hopes of helping others avoid the same mistakes she made in the past. Join in the discussion here on So Over This, or connect on Facebook, Twitter, Pinterest, Instagram, or Google Plus. You can also subscribe to new posts via RSS so you never miss out!

Comments

  1. Great advice Andrea. I had a friend that had some massive spending problems. Never had any money, but to keep up with his lifestyle, would just put everything on a credit card. I had a talk with him and worked with him to show him where his money was going and what he should be doing. He is much better now, but it is all about taking control.

  2. alandykes says:

    I agree with this 100%. My wife and I listened to the Dave Ramsey "Financial Peace University" series and it gave very detailed step by step instructions on how to accomplish this. For me personally, and I know this doesn't work with everyone, I had to realize that I'm not nearly as good at planning money needs as my wife is so I just had to hand over control and let her do it. She does a great job and our finances have been under control since.

  3. I feel like I'm halfway there, but this reminded me that there are a few more changes I could make. In the last year, I got serious about saving, paying down debt, and got a much better-paying job… all of these have been HUGE in helping me feel like I'm not drowning financially anymore. And yet… I'm still broke the last week or so of every month, because of the "only $20" problem. So maybe in 2013 I continue the good things I started in 2012, but also cut down the impulse shopping. I feel like I probably have enough books and makeup to last through the year anyway, and my body would certainly thank me if I cut back on fast food trips. :)

  4. I figured out I cannot control my credit cards spending so as of January 1, I gave them to my husband. I get an "allowance" that I can use for whatever (lunches/dinner out with friends, isn't that cute stuff from Target, etc) but no more credit cards. We're down to two with balances and I'd like to get to zero by the end of summer. There would be months where my AmEx bill rivaled our mortgage payment and even that didn't stop me at times. Sad, very sad.

  5. Pauline @ Reach Financial Independence says:

    I don't think I could have gone past the first two dates with a guy like that. While I don't have a strict control of my budget and a tons of spreadsheet and pie graphics, I need to know my other half will provide for a potential future family and not drive us all into the wall.

  6. You know, I don't feel like I keep a proper 'budget' because I don't have a spreadsheet…but I automatically get money pulled out of my check for savings each month, (Thank you online banking) and before the check has cooled in the account, I've gotten every bill that is due paid. If I get paid Thursday the money has been doled on on Friday and we just spit whatever is left in half on food and entertainment to last until the next check. I guess there is a better way to do it, and there have been times when I've been a bit concerned about if I could afford a trip that was coming up, but over all, it's worked. I do wish I had a better emergency fund though so that might be what we work on this year.

  7. Great post! I really feel for the person who emailed you, because 3 years ago I had the same question. I think the three suggestions you wrote are where people with money problems should start. TODAY. I previously would put off cutting back, budgeting, keeping track of my money – there was always an outfit to buy or movies to buy and eventually new tires or car problems I had to charge because I had spent all my money. It is soooo hard to start changing your financial life, but it can be done! I wish the lady who emailed you the best of luck!

  8. plantingourpennies says:

    We go through this with my brother in law. He chooses not to listen to the steps HE needs to take to take control of his life. He wants it handed to him on a platter, and that's just not how it works!

  9. The thing about asking someone who is a financial wizard for advice is that they may not actually have experience in what we're dealing with. Someone who has overcome their troubles is much more approachable than an "expert", and can give first hand advice on how to overcome hiccups in the process. Don't be surprised that you were asked for help, you issue great advice :)

  10. I like what you wrote but I have one comment. For people like your husband, and what you describe very much resembled my way of handling my income, paying bills immediately instead of when they are due helps a lot. This simple thing, paying bills immediately ensured that i felt poor rather than rich. And that was what I needed to start saving rather than spend. Once I had saved enough I went to the system of paying at the due date, but old habits die hard and have gone back to paying immediately. I know I loose a bit of interest that way but it gives me that great feeling at night that I know that al bills are paid and the money is the bank is all mine!

  11. Can’t remember how I found your website a couple weeks ago but am so glad I did. You are funny and honest. This post is right on target.

  12. Budget & the Beach says:

    Everything you said is SO TRUE. I'm still trying to find ways to cut spending on things that I think I need but can either cut out of find a cheaper way. For instance getting my hair cut. I'm not willing to let it grow out (being honest) because it looks stringy and limp and I feel shitty about myself and that's not a good way to be, however, my current "stylist" is $78, and I have to get my hair cut every 8 weeks, and that's pushing it for me. After tip that's crazy. I KNOW there have to be decent people in LA who can cut my non-complicated hair for at least $20 less (not willing to go the supercuts route yet). I'm just fearful it will turn out awful…but the reality is it will probably be fine and I'll be kicking myself for not doing it sooner.

    Because I have experienced that in other areas, like quitting my gym. A year ago I would have said I could not live without it, and I was paying 110/month (CRAZY!). Now I don't miss it at all and have not turned into a giant butterball. I'm doing just as well with a little creative thinking.

    Thanks for re-inspiring me to see what leaks I can plug again in spending!

  13. I thank God have not had to go through a spending detox. I am not a shopper (didn't get that girl gene) and like my bank balance too much. Some of my friends and family however – OMG did/do they need help. I have given them the basic 3 steps in the past, but like what you've said, some people still aren't ready to deal with the reality. If they only realized how much happier they'd be…

  14. Andrea – this is by far one of the best posts I have seen on this topic without feeling like the reader is being yelled at or being talked down to. You have done an amazing job here! Kudos!!

    I once heard it somewhere (I think Suze Orman) (and I am paraphrasing here) that if you were a CEO of a business, you would want to watch every penny, so why not become CEO of your home? That alone changed me and I crowned myself CEO of my household. It is exactly what you are saying – just taking control is the first and most important step!

    If I had to add another quick piece of advice, it is that getting out of debt does not happen overnight. It took you (i.e. the person who asked the question) how long to get to this point? It will take some time for you to find yourself again and accomplish your goals.

  15. michellegilders says:

    As part of my financial planning, I put everything in Quicken, including all planned bills (the recurring monthly stuff) out for 6 months in advance. That way, at a glance, I know exactly how much I definitely need to keep house and car running over a 6-month period. It is also a great way to see how far your emergency fund will go. If my 6 month projection is in the red, I save or monitor that against my savings accounts. If it is in the black, I know I have a bit more wiggle room to spend on some other bigger items. I keep all of my savings accounts in there too, and RBC allow you to label your high interest savings accounts for specific items: so I have my emergency fund saving account, the car repair one, the travel one, and "other" planned purchases one for household items or clothes, etc.. When my invoices are paid, I take out the tax money and that goes into its own savings account, then put 10% or so in each of the others once I know that the next month or two essentials are paid off–and that my emergency account is good for 9-12 months. I love how, at a glance, Quicken, lets you know how you stand!

  16. I second Diane’s sentiments about this post being one of the best on this particular topic. You have a way of writing without being judgmental and that’s wonderful. Thanks for the great tips!

  17. Yikes…quit the online banking thing?? I'm as puzzled as you are with that one :)

    And the broke-weekend millionaire trap is so true–I used to be one as well!!!

  18. WHen my wife and I got married and had NOTHING, we started getting into bad spending habits too. We "deserved" to have a couch, right? Well anyway, eventually we got ourselves back on track when we did what you mentioned: we got over ourselves. These dumb things are easy to do when you're all caught up with yourself and stuff, but once you get over yourself, well, it's easier to take control and stop being a freaking idiot. :-)

  19. Great stuff Andrea! I think it is really necessary to stop having bad spending habits if only to make our lives easier. Technology is here to make our lives easy so why struggle on a monthly basis if we can work well with technology by eliminating our bad spending habits and practicing good ones to make our lives a lot better.

  20. People just need to create a monthly budget. I can't believe how many people I've talked to that have never made one and have no idea how much they're spending every month. How is it possible to even get by doing that?

  21. timothymobley says:

    This is an excellent post! There are just so many people who would much rather live in denial than face their real financial situation. But the longer they ignore the reality, the harder it become to dig themselves out of the hole. Kuddos to you for taking control of your finances. It is not too late for your ex either.

  22. This is awesome advice. You are really good at it and thank goodness you changed your ways! Your X is going to end up in a BK, like me if he doesn't change his ways.

  23. greyhousejournal says:

    Just found your blog via your "liking" a post on mine. Am so glad you did. This is an excellent post! After my divorce, I went on a no spending spree and what you wrote: "The funny thing was, by the time I got to the end of the six months, I really didn’t want that anymore. It was cooler to me to have money in the bank for a change. Control." was exactly what happened. Never really thought about it. Will be following your blog from now on!

  24. greyhousejournal says:

    Oops, you didn't "like" a post on my blog and I can't recall how I found your site, but I'm glad I did :)

    • Okay, good – I was frantically going through your posts because I couldn't remember which one it was! LOL

      Thanks for stopping by! Glad you found me, however you did, and I'm glad I found your blog as well! :)

  25. Awesome post Andrea. There is nothing better for personal finance than the truth.

  26. Somehow early Sunday morning I found myself on your blog spot. It was like going to church. The heavens opened up and there you were! A revelation from God! Ho Lee Blog, Batman!! God DOES have a sense of humor! He knows for ME all that other financial mumbo Jumbo goes in one ear and out the other. But yoooooou? You keeps it real girl! Yes you do! You have a wicked (no pun intended) sense of humor!! I LOVE it! You are soo right! TAKE CONTROL!! I feel like Janet Jackson!! I CAN DO THIS!

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