Tuesday, January 18, 2011

Spend Less and Save More, Month 1 Progress.

One of my goals for the year is to cut my spending so we can (a) pay down debt, (b) put more into savings, and (c) have money to put toward other goals, like home improvement and vacations. I'm only 18 days into it, but already I am feeling on top of this one.

It might be considered a sad testament to your lack of money management skills when avoiding Target fun trips for 18 whole days is an achievement. But I'm going to let myself off the hook for my past inability to pay my way out of a paper bag and take the progress as it comes.

I've hit one milestone already, which was to add to the amount we have in savings. We try to pad that account to a certain dollar amount before transferring some off the top to pay down debt. Through our bank accounts we have Keep the Change, which automatically rounds up the dollar amounts we spend each day on debit, and takes the difference between what we spent and the next dollar up and transfers it directly from checking into savings. It's simple and mindless, but it's moving money over into savings almost every day.

Granted, spending less money during the month means less debits, which means smaller monthly transfer amounts. But that's ok, because in addition to using the Keep the Change program, we also have auto transfers twice per month from checking to savings, which means more money moving into savings without me having to think about it at all.

That's key for me: not having to think about it at all. The easiest way for me to save is to pretend the money was never there in the first place, and other than emergencies and paying down debt, we largely ignore our savings account. I know a lot of financial experts would roll their eyes at that mentality, but the bare facts are that we don't have a lot of disposable income, and if I know it's there I won't hesitate to spend it without even thinking. By letting the bank do all the work to transfer the money for me into an account I pretty much ignore, I can pretend the money isn't there and I don't feel tempted to spend money on silly things when it would be better to save.

The other big part of this goal, for me at least, is not spending as much money. I've successfully avoided pitfalls like Target (can I confess how much it KILLS me not to check the Target clearance right now, knowing full well it's packed with good deals?!?!) and packed my lunch almost every day this month. Our grocery bill is going up a bit for sure, but on the flip side I am eating healthier foods and feeling better. Even when we do go out to eat, like we did tonight right before hitting to grocery store to stock our empty shelves and fridge, I am trying to choose a healthy salad over a bread bowl full of brocolli & cheddar soup. It's not easy, but it IS possible, and it will be worth it in the end.

"They" say it takes 3 weeks to create a new habit. If it's true, we're well on our way!


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