Continuing on with my fashionable and financially healthful series of articles I’ve been collecting for you. I read this case study if you will, of an all too common financial scenario. A woman has to overcome a major financial upheaval in her life, in this case a divorce. Even though she dumped the husband, she still hasn’t dumped all of her bad spending habits. Overspending is a lot like overeating, its a very hard habit to break. I found her relationship to money and her emotional attachment to spending very familiar and I think a lot of other people might too. Take a look at this woman’s story from my new favorite frugal site a Daily Worth, “The Money Fix 3: Shannon’s Story”. Shannon also discusses how she, with a little help, is learning to correct her behaviors with a few simple tips that I think will be very easy to implement within our own budgets.
Hi Daily Worth Readers!
I’m a divorced single mom, and while living on half of my former income I’ve depleted my savings and spent my way into a hole—one handbag and deluxe mani-pedi at a time.
I had been playing the shell game with my money to pay bills for months, but when I received a large, unexpected tax bill in December and realized I had no way to pay it except tapping my credit line, I knew I had to make a fundamental shift in how I was handling my finances.
First, I need to get a grip on my spending—but my ultimate goal for the Money Fix is to save $5,000 in an emergency fund by Christmas. Jean and I started by reviewing my current budget and lifestyle to identify opportunities for improvement.
The first (and most critical) step for me was to keep track of all “miscellaneous” expenditures. Although I knew intuitively that this was a pivotal action step that would reap great rewards, I shuddered at the level of detail and time required to do it. Deep down I still wonder, is 15 minutes every single day worth the trouble if it’s only $200 a week I’m accounting for?
The second step was to “visit” my growing emergency fund daily and think about how having that safety net made me feel—so I could reflect on that feeling when faced with a spending dilemma. At first I felt somewhat silly jotting down “empowered”, “secure” and “confident”, but it’s been a very positive exercise, and I’m even running out of adjectives to describe my happy feelings about my little nest egg.
The third step was to apply more discipline to my spending: Is this a “want” or a “need’? This has really helped me learn prioritization and delayed gratification. When my brother visited from out of town last week, I prioritized my “allowance” on activities that added the most value to our visit. We went out one night for dinner and dancing, but cooked at home the rest of the week.
The fourth step is a tough one for me: Documenting how buying “stuff” makes me feel, and seeking activities that give me a similar feeling (exercise, talking to a friend, etc.). This is difficult for me. I’m not very happy to see a trend of buying things to impress or please other people. I have a lot more work to do in this area.
My final step is to cut costs and increase income. I’ve had great success selling some unused household items and have added $115 to my emergency fund with the proceeds so far. I’ve signed up for Netflix to replace cable. And I’m going to try to save gas by proposing additional work from home days to my boss.
So far, I’m extremely happy with my progress and Jean’s coaching. I have $1100 saved so far, and I am eagerly looking forward to the road ahead.
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