Archive for the 'Attitude Adjustment' Category

22
Jan

Shortcut #1: Trick Your Brain

By David 0 Comments
Categories: Attitude Adjustment and Shortcuts

I am an efficient person, an engineer by nature. I’m also lazy. I love shortcuts, but only when they work. So I’d like to dedicate this post, and future posts like it, to a series I’m calling “Shortcuts”. Put simply, they are tiny activities that take little time yet produce great results. I hope they may be of use to the other lazy people out there that want to get hold of their finances!

The human brain is a complex organ, and there is still a lot of mystery surrounding it. One field of study I have been interested in lately is Neuro-Linguistic Programming, abbreviated NLP. To avoid all the science jargon (which I do suggest researching if you’re interested), it is basically a method (some may call it a form of hypnosis) in which we can suggest behaviors, both to ourselves and others. If you’ve ever seen a mentalist perform, or a mind reader, chances are they are using NLP principles to accomplish their task. However, it also holds some striking benefits when used as a form of psychotherapy. Put simply, you can spend just a few minutes each day to completely change the way your brain thinks about money (and more!).

I know for myself, in my journey to become debt free, I have found many presuppositions towards money and how I feel about it. While my conscious mind knows differently, the unconscious part of my mind that is responsible for binge-spending and making late payments was going strong and keeping me on a path to stay in debt forever. I imagine most people that wake up one day and realize they’ve gone too down that path have similar issues. NLP is one method of changing that attitude.

I won’t go into why it works, but I will give the basics. You can apply this to any area of life, too. Are you trying to lose weight but can’t keep from eating poorly? Do you have self-worth issues when it comes to the opposite sex? NLP is one technique you can use to change that. Basically, there are three areas we can use to program (plant ideas inside) our brains. There is kinesthetic, visual, and auditory, meaning “touch”, “sight”, and “sound”, respectively. If you can create a pattern that keys into multiple areas, then it creates a stronger bond. For example, you may look in the mirror and say something out loud to yourself. Yes, basic NLP is pretty much just the tried-and-true “talk to the mirror” advice!

How many times have you said, “I will never get out of debt” to yourself? Likely a lot, even if you only said it in your mind. The thing you did not realize, is that was basic NLP; you were programming your brain to think you will never be capable of getting out of debt, and surprise, now you aren’t! What you will have to do is reverse that. Just like anything in life, it takes as much effort to reverse something as it does to get there in the first place. Every day, or even multiple times per day, use the mirror method. Tell yourself not that you “will” get out of debt, but that you are out of debt. The problem with using future tense is that your brain will always think this action comes later. Use the present tense, because this is the attitude you want to have right now. If your issue is weight loss, then say “I am skinny”. When using verbs, make them active.

The mirror method ties in both the visual and auditory senses to program the brain. You can also use the kinesthetic by writing statements down on paper. The movement of your hand keeps the notion that you are out of debt firmly in your brain. However, you may have to use multiple statements. Try to identify the things keeping you in debt, and make up suggestions for each of those. Try to make a list of 5-10 suggestions you want to program your brain with. Find the root issues of your money problems, and tell your brain the opposite.

An example list might be:

  1. I make wise spending choices and am a thrifty person
  2. I regularly consult my budget before making a purchase
  3. I pay all my bills early and in full
  4. I do not need expensive things to make me happy in life
  5. I no longer make purchases on credit cards

Of course, this is just an example, and for this to work you should make your own list dealing with your own problems. Hopefully you catch the idea here. NLP really is as simple as that, in its basic form. And while it might sound silly (and somewhat non-revolutionary) to talk to yourself in the mirror, you might be surprised at the effect it has on your outlook on money. They say to be a millionaire you have to spend like a millionaire, but it’s impossible to do that without first thinking like a millionaire. NLP is one method to get your thoughts in the right direction. A proper thought pattern will overflow into your natural habits. Keep in mind that initially, you have to overturn years of bad programming, and you may likely think negative thoughts even now. This is why it’s important to do this every day or more. Get it into your brain. When your brain starts thinking properly, make it start thinking in other ways. Start telling it about how you will invest, or think of business ideas, etc. The possibilities are endless, and yet the investment is literally only one minute per day or less. Even if it doesn’t work for you at all (for whatever reason), it got you thinking about why you behave the way you do, which is still beneficial.

Main Excuse: “I don’t have/want/use a mirror!” Well, there is another way, and since it ties into the emotional, many people think it’s actually better than just a visual. Simply say them out loud like before, only while you say each one, visualize your life with that principle. For example, if you say “I pay all my bills early”, then visualize yourself writing a check and sending it in, or clicking an online billpay. What this effectively does is to tie a particular action to your words, which may give it more weight. Better yet, do both methods if you can!

Super-Shortcut: As an aside, you can also use more advanced NLP tricks to enhance your money abilities. Try tying in the the kinesthetic directly to your mirror exercise. For example, when you say “I spend money wisely”, try touching a particular part of your body in a certain way. Maybe you brush behind your earlobe. Something you can feel easily. After awhile of doing this, when you are in Best Buy checking out the latest HDTVs, perform that same touch. Your mind should actually reject poor spending! This is called anchoring, and is particularly effective in making yourself (and others) behave a certain way when a particular stimulus is present.

11
Aug

Backbone Growth

By David 2 Comments
Categories: Attitude Adjustment and Debt Repayment

Note: This post has been featured in the 100th edition of the Carnival of Debt Reduction, hosted by No Credit Needed. Please check out this carnival, as it includes a ton of good articles!

One of the major things I have noticed during my journey towards a debt-free lifestyle is how little of a backbone I used to have! And sadly, still do in some areas. These are things that even before creating a mindset to become debt free, I knew were signs of weakness and were my own fault. Some come down to laziness and the strange idea I could wake up tomorrow a millionaire and all my problems would go away. However, they all come back to the root issue that when it comes to my wallet, I had no backbone.

Here are some examples of my spineless financial behavior:

  1. While activating the credit cards that led to my demise, I would agree to sign up to the so called “Credit Protector” and “Identity Manager” programs these services offered. Many times, these programs would account to $15.00 per month or more! Just to get the people off the phone, I’d agree to the first free month. However, I would let these charges ride for months, even years due to laziness, and guilt that I was already paying hundreds in interest each month, what is $20 more. I estimate I’ve lost several thousand dollars due to this. All it would have taken is a firm “no” and I might be farther along my path to debt freedom.
  2. Something I know I will be buying down the road is on sale today, so I flash the plastic and it’s mine. Sounds good, but after a year I’m still paying for that shirt, and have probably already doubled the non-sale price in my interest payments! Yes, it was on sale, and if I had the money in my budget it might have been smart, but I wound up getting a worse deal. Do this with technology, and it not only doubles in total cost, but you also get an inferior model compared to if you had saved and waited. All it would have taken is a little more backbone to say no to my inner desires and bad mathematics. This is the primary reason for 90% of my current debt. I’m still paying off a laptop I bought 4 years ago, and sold last year for almost nothing.
  3. When the budget (what little I had) ran dry and my credit payments were going to be late, I ignored the calls from creditors. I racked up tons of late fees, and got myself into a situation where it was almost impossible to get out of the cycle of late payments. If I had answered the phone and been forthcoming that first time it happened, they could have easily helped me out, and it might have been the difference in several thousand dollars of my current debt. Not to mention my credit score might not be in the low 500s right now.
  4. For some reason, I always just “expected” to win that lottery (even though I never had tickets for it!) or get that major raise, or have a creditor magically erase my debt. Maybe the creditors would forget about the debt until I finished school and could pay them off. Because of not standing tall and really evaluating my current situation and finding a way to solve my problems, I spiraled down into a situation that actually has become nearly impossible to fix. If I had really evaluated it back then, I could have easily fixed my problems in just a few months, and would be on track right now to perhaps owning a house, or at least being free from debt.
  5. For awhile, I let my insecurities play out in terms of me having to buy cool things. I didn’t just get the cheap Ipod, I had to get the best and biggest. I didn’t just get a basic stereo system for my car, I had to get the best audiophile quality out there (ironically, I don’t even have that car anymore, but I do indeed miss that system). By not having confidence in who I am as a person, that little piece of plastic used those insecurities to make me buy more stuff. Right now, I’m finally at a place in myself where I only buy what I need to get by, and occasionally some of my long-term wants.

Of course, there are many more reasons my spine, or lack thereof, has caused a lot of my debt issues now. They always say the first step to anything in life is admitting you have a problem. I think the second step is admitting that problem is likely inside yourself! Most people skip that, and blame creditors, or fancy marketing, or whatever the villain of the day is. For me, the problem was (and still is, to some extent) inside myself. It’s my own lack of backbone that has caused me to spiral down the path of bad financial decisions.

So how do I fix it, and how can you fix it? First, stop blaming circumstances and others. While it may be partially their fault, that doesn’t help your situation. What does help your situation is to accept the blame yourself, and figure out why you do the things you do. Before you even sit down and list your debts, start an emergency fund, etc., you need to evaluate yourself. In fact, I have a weekly ritual where I check my credit report (one service that has been invaluable), check my accounts online for any strange activity, evaluate my spending and budget, and also evaluate my psychological state towards finances.

Each week I try to find one thing I had problems with in the past, write it down (or blog about it), and become determined to not behave that way again. This week is Spine Week. I’m going to call and cancel those services I still have. I’m going to try to sell the things I bought on credit long ago, and hopefully let it help pay themselves off a little bit. Moving forward, I have learned my lesson and will not slip up again.

In fact, you can do this in any area of life of which you’ve had problems! If you are religious, incorporate prayer or meditation into the process if you wish. For the area you are having a problem with, think back to the situations that got you there. Now, inside each situation, ask yourself what internal mechanism caused that to happen, rather than the external circumstances. Then, think of different ways to correct that personal flaw, and resolve to not behave that way moving forward. Find a few concrete things you can do to combat it right now (calling creditors, whatever), and write down a statement of intent that you read every day in that week claiming you have changed as a person. My statement for this week that I will read every day simply reads:

I resolve to stand up for proper financial decisions when faced with insecurity, external manipulation, or laziness, and commit to always look at the long-term picture before making any financial decision.

Just think, spending a few minutes each week meditating about yourself, in 52 weeks you will have corrected 52 internal problems! For me, being out of debt by the end of 2008 is important, but knowing I will have corrected over 75 internal flaws by then is worth even more. It’s the same idea as debt management, small incremental changes to make a very large long-term change. In a year, I will be a completely different person, but this week I only need to worry about a little backbone growth.

02
Jul

Debt vs. Retirement - Perspective From A Young Person

By David 0 Comments
Categories: Attitude Adjustment, Debt Repayment and Investments

Yesterday, Trent from The Simple Dollar posted a rebuttal to a comment stating that sometimes it is more appropriate to invest than pay off debt. I mostly agree. After all, if your monthly payments are $200 per month and you have $300 extra, it can decrease your debt repayment time by many years; years in which you can invest $500 or more instead of the $300. Even if the percentages are equal (return vs. debt), it at least makes psychological sense to pay off debts before investing.

However, I know in my case, I have a retirement account that I contribute to faithfully, even though I have a ton of debt. I suspect that most younger people are in a similar situation; a ton of credit card debt, about $200-300 extra per month that can be invested, and an immense hope that they’re a more savvy investor than others. Even though that sounds like trouble from the start, I will give the reasons I choose to invest and why it makes sense in a long-term perspective.

1. Employer Matching

This one is way too overlooked in calculations I see online. A friend of mine refused to start a retirement account because he “had plenty of time to worry about that”, “Social Security would help him out”, and “that’s 5% I can use to pay off my debts”. However, what he did not calculate is employer matching at 3% (as well as the fact that Social Security will never last long enough for current twenty-somethings to benefit). While I could use my contributions to pay off my debt a little faster, the fact it has employer matching and it’s in there working for me right now is literally the difference in $300,000 when I retire compared to using that money to pay off debts right now.

2.  Fixed Limits

Benefits of Roth IRA’s are well known. However, when 2007 is over and you only contributed $2,000 to your IRA, that’s $2,000 you can never put in later. In most jobs, at least in my field, salary increases over time at a rate higher than inflation. This means that my current $8,000 credit card debt may be a big chunk of my current salary, but drawn out over a decade, it will be a pretty minimal amount to what I should be making then. However, a good Roth IRA can also easily beat inflation, meaning that in looking at VALUE of your debt versus the investment, you wind up with more money at the end, taking long term inflation and salary increase into account. Missing out on maximum contributions at such an early age winds up making the difference of hundreds of thousands of dollars at retirement.

3. Learning Experience

I know for me, I read about investing all during high school, and played with a few hundred bucks to test the waters. I also lost it all (mainly due to fees). The point is, it’s difficult to learn proper investing without having your money wrapped up in it. Since opening a retirement account, I have learned how mutual funds work, how to direct your financial adviser to wait longer between buys to save on fees, how to calculate return on investment, and tons of basics about investing that books can’t really teach you. When I finally open an IRA, I will learn more about the stock market and how to predict when things are going bad, how to read the latest news on the company, how to pick long term and short term winners based on the current state of the union, etc. The earlier you start, the more wisdom you gain along the way. Once you wait a year, you will never get that year back. My aforementioned friend is just now opening a retirement account. I’m three years ahead of him in learning how to manage those funds. I will always be three years ahead of him in investing, save for some lucky break. Time is money, and starting early is always a good idea. I only wish I would have started seriously around junior high.

Basically, there are many good reasons a young person should start investing even if he or she owes a lot of debt. It heavily depends on the person’s will-power. Do they have enough will to both invest properly and pay off more than the minimum debt payments (for those debts that are higher APR than their current investment return)? Can they make the proper calculations for their specific situation and see how it plays out in the long run? Is the debt causing mental stress that requires it to be payed off sooner, at emotional expense otherwise?

Personally, I have not opened a Roth IRA and will not until my major debts are payed off. As soon as the high interest credit card debt is gone, I will fund that IRA to the limit, as time is indeed money. Right now, however, I do have an employer-matching retirement plan gaining considerable snowball effect, and calculating the difference that makes in my nest egg, I will never regret that decision. Yes, it put a bit extra time on my debt repayment, but it’s a small price to pay for the benefits that investing early has given me, both monetarily and education-wise. I have run the calculations and my Roth can wait until 2009 with not too much loss on my future retirement, at least compared to the anxiety the debt is causing me right now. Nor would I be able to fund it fully with my current monthly payments.

The true answer is never clear-cut, and I’ve come to find it’s almost never purely mathematical. I think the benefits to investing at an early age easily transcends the obvious mathematical benefit to early debt repayment. For those of us who expect drastic salary increases due to years of experience and getting a degree, it may make more sense to not worry too much about drastic debt repayment measures. For me, it’s a challenge and that forces me to take some frugal steps. But I think for most people there is a happy medium in which you can both repay debt and invest intelligently.

21
Jun

Money Myths for Young Graduates

By David 4 Comments
Categories: Attitude Adjustment and General

Looking at other people my age, I consider myself lucky to have already made the failures in finance that I have. While they are starting their first jobs, I have already learned how to function properly in the workplace. While they are only starting to come to terms with how to spend a lot of new income, I have already misspent enough to learn the lesson of budgeting correctly. While they are saying no to a 3% matching retirement plan to slightly increase their monthly budget, I made the calculations long ago to see the benefit of saving for retirement early on. While they are buying huge purchases on credit since they can obviously pay them off with the $36k they are making, well, I wouldn’t be doing this blog if I hadn’t made that mistake already and learned from it.

Don’t get me wrong, I don’t have all the answers either. But watching them go down the same roads I have already travelled gives me the opportunity to alert most of them to decisions I know are definitely bad, and hopefully save them from a pile of debt when they are 30. Knowing other 30 year olds that are worse in debt than myself makes me even happier that I’ve started now. When I am 30, I will be debt free and well on my way to a comfortable retirement.

There is no college course, or high school course, for real money management and personal finance. I find it appalling that most graduates can at least draw a supply-demand curve, yet cannot calculate how much they can be hurt by credit card misuse and calculate amortization tables to see how long it takes to pay off that new TV. Granted, the easiest way to learn is by experience, but I think we can all agree that there is far too much “experience” going on these days. Thanks to the internet, however, people have the opportunity to learn these things ahead of time. If just one young person comes across this blog, or one of the other finance blogs, and decides to be proactive about finance, it’s worth the whole thing. In that spirit, here are some lessons I’ve had to learn the hard way.

1. Money will bring happiness.
It is often said that money does not bring happiness, but I think we secretly believe money will indeed make us happy. At least, we act and spend like it. We look at drunken celebrities and say, “If I had that life I would never act like that,” ignoring the obvious fact that so many celebrities do act that way, meaning it may not be as glamorous as we think. We buy new things and trendy clothes since the companies say that we too can be happy, like the people in the advertisements. Look at them all smiling! They’re not worried about debt and budgets! Also, we think the right car or house or clothes will make other people like us more. The truth is that material goods can make for a more comfortable life, but only the intangible things of life can bring any sense of true happiness. I have seen happy poor people, happy rich people, discouraged poor people, and discouraged rich people. Money clearly plays no role in happiness, only the types of problems that detract from it.

2. Credit is an easy way to get that happiness now.
If you need proof we actually believe money brings happiness, then look straight to the credit industry. I would love to know the ratio of legitimate credit spending to “feel good” purchases; I bet it’s astronomical. In fact, the truth on this one is so twisted that the entire credit industry shouldn’t even exist. People think credit will make for a more comfortable life, when in reality the mounting debts causes more stress, fatigue, and depression than having nothing at all does. Yet the credit card companies insist that yes, you too can have a great life, and oh yeah, they also care about you as a person, and in fact, you happen to be an awesome person! They say you can flash that plastic and make friends. In reality, every time that card goes out of your wallet you’re building a higher wall to imprison you. The creditors are your wardens.

3. It takes a large income increase to make drastic financial changes.
While more income certainly isn’t a bad thing, the reality of personal finance is that time, not income, is the major component of change. I was shocked to see that adding only $40-50 extra per month to my debt cut the entire payoff time almost in half! In the same way, it only takes a little extra money to save each month to retire with an extra million. While doubling my salary would be nice, I think finding an extra $40 in my budget is a little more realistic right now. Yes, you sacrifice a little bit now on the front-end, but the return is always worth it!

4. Rebates, coupons, and sales are great ways to save money!
This is only true if you are buying something you would have bought anyway. Yes, you may have bought a $200 pair of shoes for $20, but you didn’t save $180, you lost $20! I would estimate that about 80% of the time I have seen a friend (or myself) buy something on sale, it was not something I would have bought anyway. Really, in any situation there is a winner and loser, and I can guarantee the stores aren’t losing. Otherwise, they wouldn’t put on sales! Sure, if you can replenish your wardrobe within your budget on sales, great for you! But do not get into the habit of finding deals on things you were not planning to buy anyway!

5. If you’re renting, you’re throwing away money.
I used to believe this as gospel. After all, if I were putting that money into a mortgage, I would own a house earlier, or at least build equity for later. The truth is, if I would have bought a house when I was thinking about it, I would be far much worse off right now. The simple fact is that owning a home costs way more than renting, in terms of both money and stress. It also makes life decisions more difficult to make; it’s no longer just breaking a lease to take a new job, you have to sell a house. If you are certain you can pay the mortgage, and certain you are willing to live there almost a decade, then buying is a smart decision. However, the cost-friendliness of renting an apartment (no unexpected maintenance costs!) almost always wins for young unmarried people, and likely a lot of young married couples too. A home purchase is a serious decision, and should be well calculated out beforehand. And with the market as it is now, it is clear that you are not guaranteed to make money on the sale of your home as the advice has been for a decade now.

6. You can save money by rolling debts into a mortgage or home equity loan.
If you spend $350 on credit card per month, you can indeed save $100 per month by paying them off with a longer loan with smaller interest. However, without calculating it out, you may very well be spending more in the long run by letting the debt ride for 30 years than if you had paid it off at the higher interest rate. If you really need the extra $100 per month (if your financial situation changes or something), it may be an acceptable loss. However, long-term consolidation loans are rarely the great deal they seem in such a situation, unless the interest rate is dirt cheap. A much better way is to negotiate for lower interest rates for the credit cards and try to pay more than the minimums consistently. Drop that magazine subscription if you have to.

7. All credit is bad.
Now, everyone is entitled to their opinion on this, but I personally believe that not all credit is inherently bad. If you have student loans at 3.5%, it is sometimes better to put any extra money into a 4.5% interest savings account and earn a little extra on it. Sometimes, peace of mind is more important and you might want to pay everything off first. Credit, when used wisely, is not always bad. The unfortunate reality is that credit, as used by the majority of people today, is indeed a bad thing. But if you have control of your finances and a stable income, and are paying rent anyway, taking out a mortgage is not a bad thing, as long as you’re purchasing within your means. Be pessimistic about your financial situation whenever credit comes into the picture (i.e. assume you will be making less next year, not more).

8. Having a very detailed budget is necessary to control spending.
I’ve seen a lot of support for this view out there, with hundreds of Quicken categories and microanalyzing every small subcategory of a budget. However, as a mid-twenties guy who procrastinates, I can say with confidence that normal people will give up if the budget is too difficult to handle. I personally use a 5-category budget, and am trying to figure out a way to get it down to four. Realistically, there are only a few things that change from month to month, and only a few things you’re flexible in. Why bother microanalyzing every little thing? It’s much easier to sit down and sort into 5 categories than 50, and takes less time. At first, consistency, not detail, is the key. Work on being consistent with 5 categories first, and then start getting creative with how you analyze. This is why I love systems like Wesabe or hopefully Mint will be, as they allow for tagging expenses to whatever you want (giving you organizational flexibility).

These are just the major lessons I’ve learned thus far. What are some major financial lessons you learned, that you wish you would have been taught in high school?

14
Jun

Whatever It Takes

By David 1 Comment
Categories: Attitude Adjustment

This week has become a real test to whether or not I am serious about this. This is not the first time I have tried to reduce debt, which is why I’m blogging it now; if I fail, it’s in front of many people this time. It is not that public opinion drives me to do things, but at least if I fail this time I can’t do it quietly where nobody sees.

Tuesday my bank account went to about ten bucks, due to the mistake of budgeting monthly and not bi-weekly. Now, I will fix this mistake for the future, but that left me 4 days of having to eat and get gasoline. On ten dollars.

I had enough fuel on Tuesday to get me to work 2 more days. This meant that yesterday, I had to take the bus in. The bus route from home to work (25 miles) has six (6) transfers and takes right under 2 hours to make. Crazy, no? I’d love to ride the bus more often if it didn’t take so much longer (30 mins to drive). That’s Atlanta for you. The bus only costs about $1.50 each way, which is probably half of what I’d pay for gasoline. Also, have you ever went to the bank to withdraw $3.00 in cash? I got some pretty funny looks. It was only slightly embarrassing, but I had the upper hand (it was my money, and those tellers are probably deep in debt doing nothing about it anyway).

Now, this left me $7 to eat on for 6 meals (I had breakfast covered already). One meal was covered via an old (I mean old!) TV dinner in the freezer. It was nasty, and I’ll never do it again, but it sufficed. So, I was left with $1 per meal for 6 meals. This was difficult, but not impossible. I had frozen hamburger patties, chicken broth, mushrooms, and milk in the pantry. I bought some egg noodles and some canned vegetables with my $6, and made an extremely faux beef stroganoff that has last me well. I have two meals left of it, enough for today, until I get paid tomorrow.

But the thing is–I could have, and in the past would have– put food expense on a credit card that wasn’t maxed out. But that one little step is a step backwards, and one I am determined not to make again. I had to endure 3 days of not the greatest food, but it worked out. If I wasn’t motivated before, I am now. I’m not used to having to sacrifice much, and this was a good test, one which I passed. Granted, there is only $0.56 left in my checking account, but I know I can do it from now on, even if it means sacrificing a little. I know I can do whatever it takes.

Note: For those interested in how I made a faux beef stroganoff out of minimal ingredients for cheap, I’ll post a comment about it.

12
Jun

Navigating a Close Call

By David 2 Comments
Categories: Attitude Adjustment and Budgeting

Today I had a close call. Historically, I have had 2-3 overdrafts in that period between my first and second paychecks each month. It has always bothered me because looking at a whole month my budget always added up. I’ve always had a budget, but these fees have pretty much rendered it useless over the past year or so.

The root cause was that a few things are debited that I did not know about. I own about 23 domain names total, for various people and purposes, and when one expires, I get renewal fees debited. I reactivated my World of Warcraft account a few months ago, and that one gets debited the 10th as well. There were a few miscellaneous fees also debited that I was not expecting. The total cost wound up dropping my bank balance to $230, which is only bad because my car payment of $249 is debited the 12th of each month. Looking at my accounts over the weekend, I knew it would overdraft yet again. Even after my post on the joy in frugality, I was getting pretty down; it was a small failure.

I was saved by Quicken, and not the way you may think. I bought Quicken 2007 for Mac a few weeks ago, but hated it. It wasn’t as functional as the Windows version, nor did it have the “Mac Experience” UI. So, I asked for a refund, which luckily was applied this morning before my car payment! No overdraft, even though my balance is cutting it close.

I’ve noticed that in the first two weeks of each month, I bring home $1100 and expenses are around $1300. The second two weeks, my income is the same, but expenses drop to $600 or so. Basically, I am going to have to either change due dates to later in the month, or try to keep $200-300 at the end of each month to float the first two weeks.

So, it was indeed a close call, as a $35 overdraft is $35 I don’t get to put toward my debt at the end of the month. This time, a little bit of good luck and timing kept it from happening, but I have to be more proactive in the future to keep it from happening again.

08
Jun

Finding The Joy In Frugality

By David 9 Comments
Categories: Attitude Adjustment and Debt Repayment

Though it is still quite early in my progress to becoming debt free, it has already been a hectic ride! It has been little more than a week, and already my life has been full of making calls to creditors, finding tools to help me budget and plan, cancelling services I don’t need (or can find a free substitute for), and trying to squeeze every last nickel out of my budget. And yet, completely contrary to my initial assumption about debt management, it is actually fun!

Despite how fun it is to save, I know that to make this a permanent lifestyle change, my attitude about finances has to shift. To some degree, it is about growing up. As a child, I was shown that money brings gratification. I would browse the toy aisle, knowing that just a few small bills was enough to get me the toy I so desperately wanted. As a teenager, I knew that money allowed for me to go on dates, and watch movies, and go on trips. As a college student, money is what got me “good” food, nice road trips, cool electronic equipment, and new books instead of used ones. All throughout my childhood and adolescent years, money was equated with gratification.

The problem is that money alone cannot gratify completely. It’s a hackneyed statement for sure, but it is so true. Nobody would be in such terrible debt if a $500 credit card could truly bring happiness or comfort into our lives. So we spend more and sometimes even justify it by putting legitimate needs on yet even more credit, but the conclusion is always a pile of bills and more stress. The vicious cycle continues, forcing us deeper and deeper into the hole. Now that I’m on the “other side”, or at least in the process of switching to the other side, I see an even greater happiness than acquiring stuff: living without being overshadowed by debt.

I never imagined that trying to live cheaply would be joyful. Nor will I fool myself into thinking it’s all peaches and sunshine from here on out! But even as I have started cooking for myself, selling things on Craigslist, cancelling subscriptions, moving my hosting server to someone cheaper, and logging every penny I let go, I have definitely found a joy in the process! There is such a freedom in being debt-free, even if it means having less right now.

Even though it sounds like an incongruity, it is something that I have heard often from the pulpit. Proverbs 22:7 alone speaks volumes, even if you don’t particularly believe the teachings of Christ (or his church) on money. It’s a simple truth; we can either be lenders or borrowers, and there is no question which is the position of both happiness and success. Today, borrowing is equated to credit, and lending is equated to investments, but the truth still rings clearly.

When I can cook a $6 meal that will last me five nights, that is just awesome. That amounts to about $6-7 per night I am saving by not ordering take-out, and the food tastes good! When it is only halfway through my pay period, my bills are paid, and I still have money in my account, it makes me feel good! Knowing that by doing this, I will pay off my credit in a little over a year, saving me thousands of dollars in interest, I am happy. When I know that by the end of next year, creditors will no longer own me, I am happy. When I find a way to cut my cell phone bill in half, saving me an extra $20 or so per month, that makes me happy. When I turn $300 in overdraft fees into $300 towards credit card balances, that makes me very happy. After being enslaved by my own wallet for so long, every small success makes me feel like I am finally beating my creditors in the game of personal finance.

There is a reason nobody sees debt victims going around hi-fiving each other. When you are buried under a mountain of debt, you feel depressed and feel like hiding it from the world. You look longingly at things like the lottery, or high risk investments, because it feels like something big is the only thing that can fix the situation. The truth is that the little, purposeful improvements are the real fix. Even though it is not easy to change a lifestyle, the joy it gives you (and knowing the joy to be found when it’s over), makes the whole process worth it! And what is life, if we cannot have joy and pass it along to others?

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