Coming clean--I suck a $$$ management
I opened up my credit card bill this morning and nearly cried. No, the balance isn't THAT high. It's the fact that, against what I've always believed and practiced, I've been carrying a balance for a few months, and the new charges have already outstripped all that I've tucked away to help chip away at that balance.
I've tried to think from a dozen different angles--maybe we're spending on the wrong things or money is secretly leaking out of our wallets or we're spending unconsciously on small money drains.
But I have to admit the truth. We're spending too much and it's because we have an unrealistic view of what we have.
Mr. Knitty used to give me a set amount of money for groceries and household expenses, while he paid the bills. Contrary to its Draconian feel, I endorsed this plan because it was very easy for me to see the amount of money I had left in my envelope for the pay period.
The problem with this strategy was that the money ran out quickly. And when it did, I would use my credit card for necessities like food and formula. Not too bad. But then I felt guilty at overspending my budget, and so I'd go out and buy something else just to rebel. Quite bad. And then there were all the purchases that "didn't count". Like home improvement things--I couldn't be expected to KNOW that I'd need a new fan in the bedroom, and it's not like that money would be there in a few days anyway, so we might as well put it on the card. And while we're at it, go out for dinner to make up for the annoyance of having to install a new fan. Roughly, I was spending as much or more each month on the credit card as I was in my budget.
After a while, I decided to take over the finances. Mr. Knitty was working longer hours and I said it would be one less thing for him to worry about. I did really good at first. And then an old demon came up to haunt me.
See, I used to use my credit card for stuff, and then once the balance started to creep up on me, I'd vow not to use it and start paying for things only with cash or check. Which was great, except that then when the bill came, all the cash needed for paying that bill was already gone. Which began the familiar cycle of credit cards familiar to most of us. Suddenly, you "needed" to use the card to buy necessities because there wasn't any cash left to pay for them.
I hadn't much liked the cash system because the money always ran out before the things I wanted to buy ran out. And instead of figuring I might be spending too much money, I fell into the trap of believing that this was just one of those annoying evils of cash--that it was inconvenient, you never had the right amount, and who wants to be carrying around that much cash anyway? I decided to use a debit card instead, which seemed to carry the positives of cash but also seemed so much more convenient--I could access all my money at any time.
Except that I'd access all of my money and then some--I've overdrawn my account more than once now. It's usually when we get down to that last $50 or so, and I figure that $15 purchase will be okay, and then the next morning that purchase clears, as do three others that I had forgotten about that took a few days to clear.
I really hate how credit cards and debit cards have that "nasty surprise" aspect to them. You THINK you know what you spent on them. You remember that you had the car fixed, and you bought that wedding gift. But you don't remember all those little $30 purchases that add up so fast. Which is how a bill that I estimate will be about $500 ends up well over $1000.
Part of the problem is that I have the belief that certain "un fun" purchases should not be able to cut into my "fun" money. That $1200 car repair bill means I need to get my nails done MORE, to relax. Besides, $15 won't do much toward that car bill anyway, so I should just enjoy the manicure.
But there's another problem that I don't know how to deal with. I keep trying to set aside some money for the unexpected. I had about $300 at one point, which was great. That month I had a $1200 car repair, $400 worth of medical bills, and more. I never seem to be able to get ahead because "unexpected" is always far bigger than what I have set aside. I can handle an emergency run for diapers or a tank of gas. But $1200 is most of our monthly income. How can I be expected to pay for that? Easy. Put it on the credit card, comfort myself that I'll at least get bonus points, and by the time the bill comes, I'll have figured out what to do.
Never happens.
I keep thinking that maybe there is something BIG that we missed. Like our house was way too expensive or maybe we should have only one car. But the BIG thing I've been overlooking this whole time is we simply spend too much. The reason I didn't like the cash system was because it gave me an honest portrayal of how much I had. And I didn't like that honest portrayal. After grocery shopping, I didn'thave $40 to go out to eat. Instead of taking that as a clue that we didn't have the money to go out to eat, we declared it a "credit card" expense, rather than a "real" expense.
I need to get on top of this. Next post will be my ideas of how.
I've tried to think from a dozen different angles--maybe we're spending on the wrong things or money is secretly leaking out of our wallets or we're spending unconsciously on small money drains.
But I have to admit the truth. We're spending too much and it's because we have an unrealistic view of what we have.
Mr. Knitty used to give me a set amount of money for groceries and household expenses, while he paid the bills. Contrary to its Draconian feel, I endorsed this plan because it was very easy for me to see the amount of money I had left in my envelope for the pay period.
The problem with this strategy was that the money ran out quickly. And when it did, I would use my credit card for necessities like food and formula. Not too bad. But then I felt guilty at overspending my budget, and so I'd go out and buy something else just to rebel. Quite bad. And then there were all the purchases that "didn't count". Like home improvement things--I couldn't be expected to KNOW that I'd need a new fan in the bedroom, and it's not like that money would be there in a few days anyway, so we might as well put it on the card. And while we're at it, go out for dinner to make up for the annoyance of having to install a new fan. Roughly, I was spending as much or more each month on the credit card as I was in my budget.
After a while, I decided to take over the finances. Mr. Knitty was working longer hours and I said it would be one less thing for him to worry about. I did really good at first. And then an old demon came up to haunt me.
See, I used to use my credit card for stuff, and then once the balance started to creep up on me, I'd vow not to use it and start paying for things only with cash or check. Which was great, except that then when the bill came, all the cash needed for paying that bill was already gone. Which began the familiar cycle of credit cards familiar to most of us. Suddenly, you "needed" to use the card to buy necessities because there wasn't any cash left to pay for them.
I hadn't much liked the cash system because the money always ran out before the things I wanted to buy ran out. And instead of figuring I might be spending too much money, I fell into the trap of believing that this was just one of those annoying evils of cash--that it was inconvenient, you never had the right amount, and who wants to be carrying around that much cash anyway? I decided to use a debit card instead, which seemed to carry the positives of cash but also seemed so much more convenient--I could access all my money at any time.
Except that I'd access all of my money and then some--I've overdrawn my account more than once now. It's usually when we get down to that last $50 or so, and I figure that $15 purchase will be okay, and then the next morning that purchase clears, as do three others that I had forgotten about that took a few days to clear.
I really hate how credit cards and debit cards have that "nasty surprise" aspect to them. You THINK you know what you spent on them. You remember that you had the car fixed, and you bought that wedding gift. But you don't remember all those little $30 purchases that add up so fast. Which is how a bill that I estimate will be about $500 ends up well over $1000.
Part of the problem is that I have the belief that certain "un fun" purchases should not be able to cut into my "fun" money. That $1200 car repair bill means I need to get my nails done MORE, to relax. Besides, $15 won't do much toward that car bill anyway, so I should just enjoy the manicure.
But there's another problem that I don't know how to deal with. I keep trying to set aside some money for the unexpected. I had about $300 at one point, which was great. That month I had a $1200 car repair, $400 worth of medical bills, and more. I never seem to be able to get ahead because "unexpected" is always far bigger than what I have set aside. I can handle an emergency run for diapers or a tank of gas. But $1200 is most of our monthly income. How can I be expected to pay for that? Easy. Put it on the credit card, comfort myself that I'll at least get bonus points, and by the time the bill comes, I'll have figured out what to do.
Never happens.
I keep thinking that maybe there is something BIG that we missed. Like our house was way too expensive or maybe we should have only one car. But the BIG thing I've been overlooking this whole time is we simply spend too much. The reason I didn't like the cash system was because it gave me an honest portrayal of how much I had. And I didn't like that honest portrayal. After grocery shopping, I didn'thave $40 to go out to eat. Instead of taking that as a clue that we didn't have the money to go out to eat, we declared it a "credit card" expense, rather than a "real" expense.
I need to get on top of this. Next post will be my ideas of how.
posted by knittykat @ 11:58 AM
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