{ spending hiatus - month 3: week 4 - the brain edition }

Scientists have identified the region of the brain responsible for all your bad money moves.... ;-)
"A specific site within the prefrontal cortex, the ventromedial prefrontal cortex (VMPFC) is, in fact, among the suspects in the colossal global economic implosion that has recently rocked the globe," according to a new article in Scientific American.

This spending hiatus adventure has helped ME {re-program} my brain with regards to spending. Before, I would see something cute (and often on sale) and think, I like those jeans, they need to come home with ME... Now, I 1) try to stay out of the stores that pose a risk and 2) try to talk to myself about why I think I want those jeans and ultimately out of wanting them. Do I think they will make my butt look good? {yes} ...but so will getting off my ass and going for a run. {note to self: go run now} Do I not have 10 other pairs of similar looking jeans? {yes} 3) Isn't that money better spent on going to MEXICO than on overpriced denim made in China? {yes}

What tricks to do you tell you mind to keep you from spending money?

So, the spending hiatus went well this week... I WILL avoid Anthropologie, Target & The Container Store this weekend, mostly because I don't want to have to confess to all of you! ;-)

With regards to reprogramming our brains...I really feel that mine is now re-programmed to look at money differently...instead of landing a big order that I wasn't expecting and blowing through the money... Now, that money instead is labeled for a very specific purpose (towards either a very specific debt payment or a very specific savings account - travel fund, kids college fund, etc.) This has helped us reach our financial freedom goals more quickly.

I've gotten some emails from some of you participating in the spending hiatus because you or your spouse had gotten laid off...so it was out of necessity for the interim period but now that everyone is re-employed, now what? First, I'd urge all of you to be prepared should that happen again (with a 6-12 month emergency fund). Second, I'd encourage you to look at any non-mortgage debt you are carrying. Now that the income is coming back in, but you've been living below your means, could that extra income go towards paying off your debt more quickly? Third, look long-term...What do you need to be saving for in the future? We really want to be able to pay for 2/3 of our kids education (the other 2/3 will be their responsibility, as it was ours). What that means is we need to be putting a minimum of $4-5,000 a year away into the college fund. We know that our annual travel plans need a fund of $xxxx. Let's keep socking money away into that. And let's max out our IRA's each year. This is an interesting article I came across about "forced frugality" and how easy it is to forget the "lessons" learned once circumstances improve.

I know that some of you are frustrated with your personal finances and your personal debts. I hear you. I do. We bust our butts to make our businesses successful so that we can not only feel at ease and comfortable but so we don't reached a stressed out point. Will & I are both FINALLY on the same page financially and it feels good. Instead of arguing about where the money is going, we celebrate how it is staying and where WE are going! But it takes time and hard work.

Money is a complicated subject matter and it helps to really think about what money means to you...does it = happiness? Here's a great article on the subject.

This year our specific financial goals were to pay off both of our newer vehicles (one down, one to go), pay off my grad school loans (almost done) and to beef up our savings funds (IRA's, kids college funds, travel fund). So far this year, thanks in large part to the spending hiatus, not-traveling -which did involve not being able to go to some weddings & family events far away ;-( and increased revenue from LobotoME, and selling our pop-up camper) we've paid off over $16,000 in non-mortgage debt and have a 6-month emergency fund. By the end of the year we will have paid off the remaining $16,000 on the other vehicle, have a 12-month emergency fund, maxed out IRA's, kids college fund deposits and a great travel fund established. Then, we'll start tackling the mortgage. Seriously. If I can do it, so can you.

“Many a man thinks he is buying pleasure, when he is really selling himself to it.”
~Benjamin Franklin


Anonymous said...

Wow - you have done so well! doesn't it feel great. It is all about self-control.

I just told my husband - let's live off just your salary. any extra I bring in through my business, will go towards paying down on my van (new vehicle as well).

We have more money in savings then we ever did before. It feels so good. I highly recommend it.

PS~Erin said...

Oh, this is good stuff. We were lucky during our layoff bc of pretty much living below our means since we've been married, in effort to first get out of debt and then stay out of debt. It definitely helped and we were able to stay afloat during our layoff. We are working to build a cushion for when/if it were to happen again.

Okay, so after the 6 months of little to no extra spending, I really thought I was "cured" of wanting stuff, but it's not so. The urge to want to spend is so great right now. So far, so good, but it's going to take some serious self-control.

You are so very right abt staying out of stores that tempt. I so didn't know I needed a particular dress I just saw at Nordstrom, but since seeing it, guess how bad I think I need it now? I think being conscious of it is a huge part of it though.

Kotori said...

What a great post with soo many great tips and ideas! I'm on the spending hiatus too (but like you said, it's much easier since hubby is laid off work). The real challenge is fighting the urge to spend $2 here or $3 here - it just adds up so quickly.

You are completely right about staying out of stores. Now that I avoid Target - that cuts out a big chunk of our normal budget!

paula said...

so well said. Although I did buy new sandals this week. We do try to live debt free though, besides the mortgage of course. We should have the car paid off by the end of August too, yeah! It does feel good.