Change of mindset

As I may or may not have started to show in my recent posts, I am starting to think clearly (and positively) after a period of feeling sorry for myself. I’m not usually a pessimistic person but I have been a bit overwhelmed lately, and it was starting to show in my mood and in my attitude towards money and the future. I’m not sure how clear that has been in this blog, where I’ve at least tried to be upbeat.

I was reading over at Need to be Debt Free about how JW’s family are reacting badly to his strict budget mentality, and  think I can relate. While I applaud JW, and agree with most comments he has received that he should not delay his debt reduction plans, I can understand that if the family is apportioning NO funds for fun, and they still have $13000 or so debt to get rid of, they may feel as if the joy has gone out of life a little. I don’t think they need to spend up (especially since I have since read that they have developed a plumbing problem that will wipe out their emergency fund!) but everybody needs a little bit of mad money, even if its $5-10 bucks a week. You can’t think about every dollar eg `oh, if we hadn’t rented those $3 movies and bought that popcorn, we would be $10 less in debt now’.

Believe me I know. I’ve made that mistake before and though I never thought it affected me, it did. I got very one-dimensional, only able to focus on debt reduction because that was all I had in my life. In fact, that was all there was room for. Like JW, I am often able to forgo the luxuries by focusing on the end result, but his kids don’t have that focus to show them day-to-day where the benefit lies. They can only see that there’s no money to go play baseball and there won’t be in the foreseeable future.

I know it’s complicated and that overspending is what got that family, just like us, into trouble. But there’s a difference between overspending and reducing your debt a little slower.

Personally, I have recognised myself sliding into a personal finance hole of sorts, trolling the web for new ideas to save money and constantly looking at my budget to find ways to reel it in. I was finding myself sucked into that one-dimensional hole again, on the web every minute and not in the lounge with my husband just spending time together. But the reality is that I’ve done the hard yards now, having set a budget and organised the autopayments. Now I need to set all that on autopilot, at least a little, and make sure we can still survive and have a life while we get rid of our debt. 

Also, since I am not going to be earning a full income for another 18 months, I have decided that maybe we need to put home ownership down as a longer-term goal. Once I really looked at and analysed the finances of buying, it became clear it would probably be too much of a strain on us to do this anytime soon. There are just too many new expenses with home ownership (eg rates, insurance) that mean we would have NOTHING to spare each week. We’d own a home but have NO life and no back-up if things went wrong.

Since we are living rent-free now, we are now going to:
Save $300 a week for home ownership

Pay $130 a week of the car loan (to halve its pay-off time)

Pay $100 a week of our family debt (the person we owe it to doesn’t care if it’s a lump sum or weekly payment).

This way, we can see progress in each area, and have a little left for fun. Even though this method doesn’t quite fit with my preferred (debt snowball) way of doing things, it will still mean we can see progress in each sphere over the coming year.

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