I have saved every spare penny I had for the last 3 months. At the beginning of September, I had enough to catch a plane out of my hometown. I am sad to say that it is no longer an option, and there are 8 days left in month. So now I am askingmyself, “Where did it all go?”
I thought I got all the splurging out of my system during my vacation in August. It seems that I brought back a case of “spend-money-on-frivolous-things-osis”. In an attempt pinpoint my initial symptom, I did a transaction search on both of my bank accounts to see when and where this all began.
I have two checking accounts because I have separate purposes for each: one is for bills and recurring purchases I have to make (food, water, personal items), while the other is my very own discretionary fund. I just cannot afford to be without shelter, heat, hot water, food and a vehicle. So I made one of the checking accounts the “bills only” account. The pay from my full-time gig is set-up for direct deposit, and the bills are set to be paid automatically.This way I don’t have to worry about mailing payments or making payments in person. Every time I receive a direct deposit, bills are paid. If money is leftover, it still there to be a cushion for emergencies. My second checking account is what I use to have fun, so to speak. Those nights out on the town are supposed to be purely funded by the remaining net pay from my part-time gig (also direct deposited). I use the funds from the part-time gig to cover my cost of commuting 5 days of week to two jobs, student loan payments, and vacation savings. My fun money is whatever that’s left and I use it however I choose.
But I have been choosing to do whatever too much! With my first account I noticed that I went over budget on some stuff I purchased for me to live a daily basis (food, cleaning supplies, etc.). And I also realized I never set a budget for the gathering I had at my house at the beginning of the month. As result, I overspent by $120! Typically, I overspend by $30 or so. How could I have done this? Well, whatever is in my bills only account stays there, and becomes part of my cash cushion, which was roughly $100. Since I spent $120 more than usual, now I have to repay the bill account the $120 I failed to budget for. Also, the automatic payments for my car did not start. So, there was a hefty slush fund in my bill account at the tips of my fingers. My second account contained transactions that were typical: student loan payments and a bar charge here, a restaurant there. But I never paid my bill account for the $120 I spent, and continued to spend normally. I spent my money twice, which means I will have to use my savings to cover any upcoming bills. I am determined not to let this happen again.
To be financially secure, you have to have a plan. But the key to sticking to the plan, is working the plan. Now is the time to re-work my plan. My first step is giving that financial institution that holds my car loan a mouth full!! I contacted them twice about this, once in August, and again during Labor Day weekend. I am starting to become paranoid and think they are out to ruin my credit rating!! What bank does not want your money? To fix this problem, I will use the multiple account option with the direct deposit offered at my first gig to allocate the funds directly to the bank. Second step, stick to my guns by paying out cash as I said I would:“Make retirement contributions, savings deposits, and bill payments automatic (in this order).”If I made that $120 payment to myself from my discretionary account, I would have something to show for all the cash I saved from the months before. The final step, I have set a limit on my cash cushion and vowed physically remove any excess. Apparently, it grew without my knowledge. Once I get this situation under control, then I focus on recouping my lost savings and saving more on average each month.
I honestly understand what it means to “always pay yourselffirst”….now. But I am allowed to make mistakes in life; I just cannot afford to make the same mistakes repeatedly… I managed to not shop online for two weeks
cold turkey. I can do better than this!!!!
"Putting My Money Where My Mouth Is" is a journal about real life experiences and concerns of Jéneen R. Perkins. The purpose of the blog is to exhibit the real life challenges and answer the tough questions posed by the concepts of business, entrepreneurship and money.