I just finished a wonderful book Your Money or Your Life by Vicky Robin and Joe Dominguez and was amazed by the interesting viewpoints on money and spending habits presented there. It isn't your basic "work really hard and sell all your belongings to get out of debt" book. Nor was is a book about "the latte factor." More a restructuring of your views on how much your habits are actually costing you in terms of both money and time. It actually stresses the importance of thinking through how your habits might actually be forcing you to work more. It encourages people to spend less on material goods and have more free time.
One of the steps in this book is making a list of every penny that leaves your hands. Since I signed up for mint.com (an excellent money tracker, by the way!), I had access to most of my payments over the past several months. Of course, this doesn't exclude me from making a cash flow list, but it did open my eyes to a few things. First of all, I had several "subscriptions" that I not only do not need, but do not want. I spent the first hour and a half of my day calling and cancelling several things. My eye shadow club from BE? I have a stockpile of great looking colors from them already! My dropshots profile? Haven't used it in 2 years. Monthly credit check? A year ago I signed all my bills up on auto pay and I keep very close tabs on my accounts with mint.com. My subscription to the local paper? I only read it on Sunday, and all it does is make me want to buy more products from the sale ads. All together? I just dropped almost $40 a month. I just gained almost $480 a year. Wow. A few low cost items can really add up. But, not just in money. I would have to work about a week just to earn enough to pay off the yearly total. So, I just freed up a week of my life's work.
I figured while I was at it, I might as well check on my credit cards and why most of my balances don't appear to be dropping. My balance has been more or less the same since I graduated from college over 10 years ago! And it's a pretty darn big balance at that. Frugal has not always been my goal. I learned that the card I am most loyal to has now given me a 28.9% interest rate! I'd pay it off in about 36 years according to my statement. Incredible! Appalling! I also researched other card websites and learned that one of my cards (that had a very low balance) was offering me a great promo rate less than 5.9% interest for 18 months. Transfer done. This could save me several thousand dollars and releases a lot of stress! Sheesh!
Don't get me wrong, I don't think that this alone is going to rescue me from debt. The next step is to find a plan to pay this down and get it set up on auto pay so I don't even have to think about it. And, of course, not to add anything else to my debt. Almost every year we have a crisis. This year was a few thousand dollars in vet bills for our elderly dog. Last year, it was the death of my beloved Saturn and the gain of a new CRV. Sometimes it's a burst water line, and sometimes it is the loss of income. But, every year, we are unprepared. And that had to change.
Living simply doesn't mean living unprepared. To me, it means having the means to pay for what comes our way. Not being stressed about the unknown. But, at the same time, not living with more that we need.
Current financial difficulties taken care of today. Next on my list? Preparing for our sell-it-all garage sale.
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