Better yet, George Bernard Shaw, one of the founders of the London School of Economics said, "Progress is impossible without change, and those who cannot change their mind cannot change anything."
I knew if I was going to get out of debt, something - okay, a lot of things - had to change. I was going to have to make sacrifices, I was going to have to change the way I thought about things, and I was going to have to, for once and for all, make my finances a priority in my life. No more living like there was no tomorrow or like I didn't have a clue about things. It was time to own up to my situation and make changes!
The first, and inarguably most valuable, change I made was...wait for it...the dreaded budget. I know, I know. That word that the most terrible connotation. For a few years before I started my budget, one of my best friends had challenged me to get on a budget. Well, at the time, budget sounded like a jail sentence to me. But, once I started thinking about my finances more and even talked to a debt management coach, I realized how important of a tool a budget was and how it could help me.
Back before I started the Dave/Total Money Makeover Plan (when I only thought I was serious about debt...), I contacted the Balance Financial Fitness Program. I had to fill out paperwork prior to my phone appointment with a counselor and in that paperwork included my month expenses. I thought, "No problem - that's easy: Rent, Electricity, Water, ..., ..., ..." Well, once I actually had my call, the counselor started asking me about all kinds of things that I hadn't previously included in my budget - car repairs, taxes, vacations, etc. - things that are supposed to be a no-brainer, but for someone like me, I had totally missed the boat on!
Even though I didn't stick with the debt management plan from Balance, I took a very valuable takeaway from my contact and interactions with them - my monthly budget doesn't just include things that happening in this month. It's about planning and setting aside so that when my $333 car insurance bill comes in the mail, I'm not putting it on my credit card (yes, that happened multiple times) or having to be a tad late til my next paycheck came. FYI, late notices are never fun.
Now, my budget includes everything (well, I hope so at least - I haven't had any surprises yet, thankfully). I have categories for:
- Essentials - Rent, Groceries, Gas (car)
- Utilities - Electric, Water, Gas (natural), Cable (more on this later)
- Bills - all credit card bills, Netflix, Gym membership, any other regular monthly expense
- Cody (the dog...and yes, he usually comes before me!) - Food, Meds, Toys/Treats, Daycare/Dog walker
- Me - Personal Hygiene, Clothing, Dining out, Entertainment
- And then what I call "Special Savings" - money put aside from each paycheck for those things that only come one to a few times each year - Car taxes, Car insurance, Car service, Gifts, Vacation, Medical expenses
All of my budget categories are on a spreadsheet with fabulous color-coded tables and built in formulas (Yes, I am that nerd) and I visit it every time I get paid - often times, more frequently. I will admit it - I love to budget now. Seriously, it's a rush for me. I know that sounds crazy and you probably think I'm crazy for saying that, but there's really only 1 bad "B" word for me now, and it's not budget. Looking at my budget gives me hope and inspiration, it fuels my fire to pay off debt faster, and I have not once paid anything late (or on a credit card!) since I started getting serious about my budget.
So, I told you my budget was the biggest and best change that I've made, but there are other changes (sacrifices) that I've made in order to free up extra money in my months budget:
- No cable - I said goodbye to A&E, History Channel, HGTV, and the Food Network and now only have basic local stations, internet, and Netflix now. I desperately miss my DVR but ya know what - I haven't died from not having it yet!
- Gym membership - I work for a hospital system that allows me to have a free membership (with classes!) to our fitness center. Why would I pay for one that I don't even go to anyway?!
- Essential oils - Okay, now you're really going to think I'm hippie-crazy, but I'm totally into essential oils. I love putting them on, diffusing them, you name it. But, those little suckers can be expensive and I was in a monthly order service where I had to order a minimum of $50 (not including shipping or taxes) in essential oils each month. Sorry, Lavender - you'll be coming out of my money only when I run out of you now.
- Fun outings - I have had to learn to say "No." I'll never forget one of the first Dave Ramsey shows that I listened to via podcast: A man called in about Green Bay season tickets; you could tell he was so torn - his love for the Packers was strong, but he also had goals he was working on. Dave told him, "you (our society) needs to learn the word 'NO'." He also says something to the likes of "Children do what feels good; adults learn to say no, make a plan, and stick to it." There have been plenty of times where I've wanted to go out and do things that my friends have invited me to, but I am at the point right now where I just have to say "no." One day, I'll be able to say "yes" without even thinking about it, but that's not now - right now, I'm learning and practicing "no" when I know I can't afford things, when I have to make that sacrifice.
Changes aren't always fun, but they are 100% necessary for me to successfully get out of debt. I can know all there is to know about money, but if my behavior isn't reflective of what I've learned, I'm never going to win with money. Sacrifice. Abnegation. Purpose. Determination.
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