After a long time of digging deep into my financial dependence, and auto-pilot behavior the day had come to come up with a budget and game plan. If we continue to do the same thing over and over we will continue to get the same results.
Well, I don’t like my results.
That means that I have to change how I do things. This can be super scary, but in order to move forward and have a chance for success, we must take risks to get us where we want to be.
I have determined that I have been on auto-pilot allowing my money to rule me instead of me being the boss.
For me to be the boss, I had to take the initiative and create my own financial plan.
My goal is that every month I will be telling my money where to go. Period.
My plan started after I de-cluttered my wallet and credit cards. I cancelled every unused credit card account. Then, I had a shred party where I disposed of those soul-sucking colored pieces of plastic. Some financial gurus say you still need to keep your unused credit lines open because if you don’t it will hurt your credit score. Well, I have a secret:
I do not care. I want them gone. My credit score doesn’t define me. And, I’m giving up credit cards all together when I pay off the last of my debt. This means that my credit score is not a factor in my money or how I live my life. My credit score no longer rules me either. I rule it because I am the boss and am handling my imaginary “credit score” as if it doesn’t exist. Because from now on, I will pay upfront for everything I want or need.
I’m not scared anymore. I am angry. I am angry because the little score that pops up took me 20 years to create a ‘green colored’ number. I stressed, fretted, and had anxiety attacks to keep it there. Then, outside of my control, I got laid off from my job and within 2 measly months my credit card number is now ‘red colored’ and it is designed to make me feel bad.
So, if you want to do something drastic just like I am; you have to be ready and willing to let go of a lot of your predisposed thoughts about money.
I totally am, so that’s why I am doing this. And secretly, I know that my credit card number is going to quickly increase back to green without any of my mental chatter and obsessions about ‘keeping it at the top.’ And that’s fine. It’s just a weird game to play anyway and I’m not playing anymore.
My passion from opening my mind and looking at my finances with a new outlook made me motivated.
I grabbed a sheet of paper, a pen, and a calculator and got to work.
My bills were auto-payed out of my checking account every week, whatever their due date.
My income is consistent weekly so I get paid a certain day every week.
I ball-parked estimated what discretionary money I had each week for gas, groceries, and anything else I wanted.
Nothing into savings, and nothing left over at the end of the month.
I do not auto-draft. Ok, this is a big deal to me because I have ALWAYS auto-drafted. Now I am in control of paying my bills individually.
I pay my bills the first week of the month. Every single bill that is due that month is paid in the first week. So right then and there I am current.
I have three banking accounts:
- Bill account
- Spend account
- Savings account
Bill Account: I have figured up how much I owe each month in fixed bills. I divided them up weekly. Every pay day I put that amount into my ‘bill account.’
Spend Account: This is the amount of money I can spend on gas, groceries, and anything else I need/want. I have figured out how much I will allow myself and will deposit that amount into this account.
Savings Account: I have pre-determined how much I will save each week. I will be paying myself now. This amount will be deposited into this account each week on payday.
This way, at the first week of the next month, my ‘bill account’ will have the money need to pay my next month’s bills. I will then use that money to pay bills the first week of the month.
I have a separate debit card for my spend account. This will be the only debit card I use for purchases.
My savings account is going to grow really quickly. I will be using money here to build my emergency monies and pay off current credit card debt.
The formula is simple (and I am no math whizz that’s for sure!)
- Add your monthly fixed bills (car, house, insurance, credit card payments, etc.) and get the total. Divide by 4 (4 weeks in a month).This is the amount that you need to put into your ‘bill account’ each week.
- Determine your spend account. This is the amount you have to spend on things like gas, food, snacks, clothing, or whatever is not a fixed expense. Set a cap on it and divide by 4. This is the amount that goes in your ‘spend account’ for the week.
- Whatever is left over goes into your savings account. I am separating my money among these three account on payday which is the same day every week.
This is my new, drastic way of telling my money where to go. When I do the math and split my accounts this way, I have plenty leftover for my savings. I have savings because, well…you never know what can happen and I don’t plan on working in a career for someone else until I’m old, feeble, and dead.
There are a billion different ways to handle your finances. There are spreadsheets and programs and so many opinions.
I am not at all saying this is the BEST way to handle finances; it’s just the best way for me now.
Are you in a financial crisis? Do you hate the way your finances are ruling you? Is it time to be the boss? If so, and you are prepared for action, discover why you do the things you do, behave the way you behave, then for god sake grab a pen and paper and get to work!
I wish I had done this sooner. I really, really do. But there is no better time than today to be the person we want to be. And sometimes, that means a drastically different approach to something and an open mind.