{ keep spending + stay in debt }

Holy questions people...I think I have gotten more emails asking personal finance questions than I do about my products since my guest post on Man vs Debt (that may be called bad marketing on my part because I am the organization guru not personal finance!)... ;0 And believe you me, when I say I am no financial guru. I don't think I ever even looked at our bank accounts until about 18 months ago. I was clueless. But not anymore. My husband and I have big plans and that means saving a ton of money, paying off our house in the next 5 years and having a great travel fund so we can travel internationally for 4-6 weeks each year.

Anyway, the question I get most frequently seems to be that you TRY not to spend and do good for a few weeks and then fall off the bandwagon big time...I got one email last week from a mom of one who has over $80,000 in debt - school loans, credit cards, vehicle loans, etc...and still shops for cute designer clothes for her son each week. They struggle to make rent, she isn't working right now and they have no savings or emergency fund. This isn't a good scenario. The bottom line is, you can't get out of debt if you keep spending money. I would encourage her to think about her son's future - does she want him to have to take care of her when she is older, does she want him to wind up with thousands of dollars of school loan debt because she can't help him go to school? And if they want to buy a home someday, they need to pay off the debt and set up a savings account for a down payment (home loans don't come so easy anymore). What advice do you have for her on ways to NOT fall off the spending hiatus wagon?

Some things that have worked for me in helping ME not fall off the spending hiatus completely (note: there have been a few slip ups here and there) have been to avoid my personal triggers (Target & Anthropologie in particular). Don't GO shopping. If you put something in an online shopping cart leave it there for a day (unless of course it is a LobotoME notepad!) and see if you still feel that same urge a day later. Find something else to do instead of shopping. Shopping should not be a hobby. And if you do feel the urge, go to the thrift store with $10 in your pocket and that's it. See what treasure you can find (things that I've found recently at the thrift store - new winter boots for Sam ($2), a food dehydrator ($3), a vaporizer for Henry's room ($3), a great piano ($150) - Samme's Christmas present, Christmas craft stuff ($1), vintage Parents Magazine children's books ($.10), Brand new ice-skates for Samme ($5) - another Christmas present, etc.

Many of you have asked if I am going to keep at it with the spending hiatus....after 9 months I can enthusiastically say NO! ;) But I do believe my spending habits are forever altered. I don't anticipate going on a shopping binge anytime soon (although there are a few things on my wish list - this, this and this in particular).

Here are some tips for developing a saving & spending plan for 2010:
- Set specific, realistic goals
- Take control of your finances - know how much is coming in and how much is going out.
- Create a monthly spending plan for you & your family (make sure to include room for unexpected expenses and for some fun!)
- Pay down debt (especially credit card debt).

ps - Here's a great spending hiatus/budgeting article via Amy and another one on the Choosing Voluntary Simplicity blog on knowing WHY you buy. Here is also a great post about 3 little white lies we tell ourselves when spending money.

“The chief cause of failure and unhappiness is trading what you want most for what you want now.” -Zig Zigler

Great print pictured above available here.


Carbzilla said...

I feel like personal finance is like dieting - no one really wants to hear the truth that you need to change what you're currently doing to get results. We got a financial advisor, and it was the best investment we could have ever made. I gave up "shopping" as an activity a long time ago (fortunately I ran out of time to do it, with a full-time job and all). I'd much rather go on vacation than have things (though I do love my Vitamix - bought refurbished with free shipping!). I'm very disappointed with MINT.com. I was all excited to graph our spending but it couldn't find our accts and then the access questions just freaked me out. I guess if I have time, I'll just have to plot spending out myself from our statements.

paula said...

such a great post. the key for me is to stay out of shops.

oh, and seaside is cold. well 50's during the day, but gorgeous none the less.

Where The Wilds Things Are said...

Thanks for your insight and the links. I have been thinking a lot about our budget and how I can save more and spend less.

LobotoME said...

Hi Carbzilla! Where did you get your refurbished vitamix?? ;)

Anonymous said...

yep. yep and yep.

Tara Hogan, INK+WIT said...

hi love, merry christmas and happy new year! we need tocatch up : )

amy and ann said...

great fresh fun post and I feel your crazy pain with overscheduling trips and everything in between!!! Email me your address I have a little something for you...for the new year!

:) amy

Rachel said...

I love personal finance posts! I have an obsession with keeping track of our finances and we manage to do pretty well. If you look at it as a game, then taking charge of your finances can be almost as fun as shopping, and way more rewarding.