I’ve made great progress with my personal finances over the past year. I am paying off debt. I established an emergency fund. I even opened a Roth IRA. But I’m not out of the woods yet — I still do stupid things from time-to-time.
Spending for the sake of spending
For example, I just returned from a trip to the bank. I deposited a couple of checks which caused my balance to increase to what, for me, is an enormous sum. (Next week I’ll share my dilemma over what to do with this money.)
Rather than come directly home, I had to stop at the comic book store. This isn’t necessarily bad. I’ve been training myself to buy only comics I genuinely want, not to buy for the sake of buying. Today there wasn’t anything that I had to have. I should have left empty-handed. I didn’t. Instead I found a couple of books that looked mildly interesting. I spent $50.
This is stupid. I know perfectly well that the several new collections I want are due out later this month. I should have saved for them. But because I was feeling flush, I craved the rush of a new purchase. So I spent $50.
Last summer I wrote about paying bills as they arrive. This money hack has works well for me. By paying bills when they arrive, I don’t feel pinched. The money goes to necessities first, so I know anything left over is mine to do with as I please.
This works like a charm. Mostly.
The one bill I haven’t been paying as it arrives is the home equity line of credit. Instead, I wait as long as possible so that I can accumulate cash to throw at it. The problem is that sometimes I forget to mail it. Last month, for example, the bill was due on the 18th. On the 19th, I was sorting my financial papers for something else, and noticed my home equity bill had not yet been paid.
Fortunately, I was able to make a bank transfer that day, which meant the money cleared in time to avoid late fees. (I have some unknown number of days beyond the due date in which to pay.)
Again: this is dumb. I could easily have missed the payment completely, resulting in late fees or (worse) an increased interest rate.
Easy come, easy go
I have a lot of books. I’m sometimes reading five or six books at once. To mark my place, I usually grab whatever piece of paper is at hand. Sometimes, apparently, I mark my place with $140 checks.
In February, I was gathering a stack of books to return to the library. One book slipped and crashed to the floor. As it did, its pages ruffled briefly and a check fell out. It was a check I’d received in the mail the day before. If I weren’t so clumsy, I would be $140 poorer. (And four years from now, some library patron would have opened the book to discover $140!)
Everyone makes mistakes. The recovery process — moving from a life of debt and compulsive spending to a life of responsible money management — takes time. It doesn’t happen overnight.
When I used to make these sorts of mistakes all the time, I’d let them get me down. Doing something dumb like spending $50 on comics that I didn’t really want would have been enough to send me into a tailspin. I’d feel bad, which would cause me to spend, which would make me feel bad, which would cause me to spend. And so on.
These over-reactions are rare now. I accept the fact that I’m going to do stupid things. I trust that I’m on the right path, that my financial situation is improving. Little errors aren’t enough to draw me off-course anymore. I have my goals, and I’m sticking to them.