Jay wrote with a question that I think most of us have had to face at one time or another: What do you do when you feel like you’re slipping into bad financial habits? Here’s his story:

I have no real debt besides some student loans on which the monthly payments and interest are negligible and well under control.  My credit card gets paid in full every month.  I’m building an emergency fund. I recently got a decently paying full-time job.  I live as frugally as I’m comfortable with — I pack my lunches for work, eat home except for twice a month (or when I’m out of town on business), and keep entertainment expenses reasonable.  I manage to put away 30% of my take home pay into a high-yield online savings account and dump as much as possible in to the emergency fund every now and then.  So why do I need advice?

I want to start a small side-business, and need to make just a couple of high-cost equipment purchases (about $700 worth).  At the same time, my long-term girlfriend and I have just separated, so my living expenses are about to increase:  

  • I’m going to need to buy some furniture.
  • The cost of groceries is going to increase.
  • Vet bills will no longer be split.
  • And so on.

What’s the best way to not fall back into the non-frugal rut, to still maintain a strong outlook on personal finance?  Should I hold off on equipment for the side-business until I get a stronger handle on what’s going to happen financially?  Is it better to live farther away from my job and pay less rent, but have a longer commute (and therefore pay more for gas)?  I’ve been making good financial decisions, but even as I look at apartments online, I find myself thinking, “Well that’s a bit more than I wanted to spend, but I could do it.”

This feels like the first step to losing control.  How would you approach something like this?

This situation gets at the core of personal finance — money is more about mind than it is about math. Jay understands the math, and he’s had the mental discipline for some time, but he can sense his strength beginning to crumble. What can he do to maintain his resolve?

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