Budgeting Your Money: Avoid Spending Into a Stressful Financial Life
- Train Wreck Tuesday
- Our Train Wreck series features stories of financial woe submitted anonymously by our readers. Submit your own story, and if selected, you'll win a Mint t-shirt!
I’ve always loved to shop, and I think a lot of women and men can identify with the lure of shiny new things. Unfortuantely, I was never one with strong personal budget management skills. While in college and shortly after, I was with a man who made less money then myself.
He’s generally conservative with money; I’m not. I spend frivolously on parties, weekends, nights out, dinner, lunch, new shoes . . . anything. And I write off credit card debt to “Well, my income will just keep going up, so I can afford it!”
So here I sit. I’ve bought a condo and while the market was hot, I took out $28,000 in equity to ‘remodel’ — and, well, I’ve remodeled the bathroom and done some minor fix ups, and I paid down (but not off) my credit card debt.
And I keep spending.
The market has gone flat and my condo is worth about $15,000 less than I owe to my mortgage and equity loan — maybe $11,000 if I’m lucky. I can hardly afford to make my mortgage and association payments. And so I use credit to keep bringing more shiny, new things home.
Things I don’t need have accumulated into another $14,000 in credit card debt. And a $17,000 car loan. And I’m in graduate school, so I have to pay tuition too.
I’m single now and the two of us could hardly afford our lifestyle. Now I’m saddled with debt but hesitant to change my lifestyle drastically to make it better. I like my life. But I don’t sleep many nights because of the stress.
I am a train wreck and I need to find a way out. I struggle, struggle, struggle to pay bills and am now paying off one credit card with another — a sure sign of disaster.
The thing is, I’m making enough money to afford my lifestyle — if only I hadn’t already spent that money before I was making it. Hopefully with Mint’s financial management software, I’ll be able to change and get to a point where I can live a much less stressful life.
Train Wreck Tuesdays are a weekly post of horrible financial mistakes. They are posted anonymously. Submit your story; if you’re selected, you get a free personal finance book. The best comment gets the same prize! Check out past Train Wreck stories here.
Here’s an idea for the writter of this train wreck. Why not turn your shopping hobby into a selling hobby? Take out all those shiny new things you bought and start selling them on ebay. That’s what I’m doing. I used to buy tons of stuff I didn’t need. So I decided to clear out everything and learn to live a non-materialistic life. I know it sounds hard but once you clear out then you will feel so much more relaxed and at peace. Teach yourself not to go buy stuff. What’s the one place that you spend the most money at? Do not go their for at least a month and see how it works. Do whatever it takes. If your friends ask you if you want to go tell them you would rather go for coffee. At the end of the month count all the money you have saved. Do it another month and so on. Add more stores to your “do not go” list. Save all the money you make on ebay too. Do give yourself rewards at least twice a month. Write a list of the things you would like to have. If you stick to your goal of not spending out of control for two weeks then go buy one thing you really want on your list. Good luck!
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[...] Tuesday Train Wreck - Spending Into a Stressful Financial Life [...]
Misti stole my comment. =)
Start selling the clutter. You don’t need it, and you can use the proceeds to drop the debt. I have an excellent read for you: “Bitter is the New Black” by Jen Lancaster. She also has a website: http://www.jennsylvania.com. Get the book from the Library!
@Dyphan: Yup. All these submissions are real submissions from readers.
@Misti & verena: Selling the clutter is definitely a great way to try and change the current consumer lifestyle. Although it can be an incredibly challenging process for many people to switch from a consuming mentality to sound financial lifestyle mentality.
“Bitter is the New Black” sounds like an interesting book. Premise sounds good, and the quote of “the bitch had it coming” made me giggle. Will check the book out when possible, thanks!
This is an all too familiar story for a lot of women who are single parents.
My story anyway. For years I used mr. Plastic as a second income source. It all comes due. Bite the bullet earlier than I did. Sell the stuff and stop spending. It’s better to do it earlier than later.
Unfortunately this is probably a common story. Debt is the enemy of freedom and credit card debt is the worst of all.
You say you want less financial pain but you also don’t want to change your lifestyle drastically.
You can’t have it both ways. You have to change your spending habits right now. The more you economize, the faster you will get out of debt.
You need to think of your debt as a monster that has to be slayed. Every time you redirect your money from luxury spending to debt repayment, you take a step towards killing the debt monster. Think about the stuff you don’t use anymore. How much of it could you sell in order to have more money for debt repayment?