One of the main reasons I started The Money Drain is because I used to be REALLY bad with money. I’m talkin a 525 FICO score with a couple thousand dollars in debt driving a 1978 Ford Bronco and spending $80/week on gas and no retirement here people.
I made a lot of mistakes in my financial past that have lead me to the stability I have in the financial present and the goals I’ve set for myself in my financial future. I learned from my mistakes, and we all have to make mistakes in order to move forward. There’s usually an event that just sorta *pops* and makes things click for us to make that financial turn-around, and that’s what happened for me.
I started by actually tracking my finances in Microsoft Money, which just so happens to still be my financial tracker of choice. I continued by reducing expenses where I could, starting with getting rid of the $80/month Schwans Food Delivery I had and ending up with changing my cable and cellphone plans to cheaper variations or promotional rates. I did a plethora of things that I will touch on in another post later on.
As I progressed in pulling myself out of my financial stupor, I also realized how judgmental I had become about how other people waste their money. It’s kinda like how (and I do this as well now) when you start eating healthier you start to take notice of how awful other people eat.
I’m not afraid to admit it, I’m a judgmental a**.
But watching other people making mistakes has only helped keep me focused on my own goals, which is entirely a good thing. I learn what NOT to do so that I can keep making progress on what I want for myself. That’s another motivation behind my creation of The Money Drain, allowing people to learn from each other on our fails and successes.
People are creatures of habit, and I’ve been saying that if you want sh** to change then you have to change sh**, whether it’s money or health. It really sucks having to change things, but when you develop new and better habits, it truly makes things a lot easier in the long run.
An example of something I see all too frequently, and I’m sure you can acknowledge this scenario: A couple are regularly behind on their rent, but are always ordering chinese take-out or have purchased a new decoration-only sword to hang up in their apartment. The mentality here is wanting to buy the newest gadget without fully budgeting out what their expenses are for that month. Once the money is all gone and they realize they still have bills to pay, things start to dwindle down.
Some wires got crossed in this method of thinking, because really and truly the first thing we need to worry about is making sure we have a place to live, so mortgage/rent first. After that some sort of transportation to get to our jobs and then the utilities we need to function comfortably such as electricity.
After the necessities are in place, do we focus on what we want next? No. Next we start paying off our debts and credit cards. Because they will only get bigger if we don’t make them go away.
Once debt is gone, we would focus on our retirement and savings, but I know some people will then focus on seeing what is left over for the next iphone or digital camera. Still, at least the essentials and debts are paid.
The down-low is, you need to reprogram your brain to prioritize in an order of importance, whatever that may be for you, before you start spending money frivolously on stuff that ultimately doesn’t matter in the long run. Once the habits are formed, things will fall into place mindlessly and before you know it you’re living below your means and in the black rather than staying in the red all the time.