I have a spending problem. My penchant for pretty, soft, high-quality, and beautifully scented things has gotten me into a lot of trouble since turning 18 and having a regular job.
With relief I can say that in my several years of being an active credit card holder, I’ve been organized enough to not have made a single late credit card or student loan payment. Punctuality with bills, however, doesn’t compensate for the dire problem of being mired in debt.
Only about a year ago did I find out I could completely evade having to pay interest by paying off my entire credit card balance each month. I even thought I needed to carry a balance from month to month in order to have a good credit score. (Assumptions are dangerous.)
As for student loan debt, in my latter two years of university, I was finishing my bachelor’s degree in Canada and thus ineligible for student financial aid, so my entire education was paid for by federal Stafford Loans, comprised of both subsidized and unsubsidized loans. Rather than paying any of it off, I decided to wait until I was out of college, meaning the unsubsidized portion of it was accruing interest since the day it was disbursed. Whoops.
The horror of graduating with $53,000 made me do a pivot, resulting in my acquired interest in personal finance and saving money.
Nonetheless, I keep finding myself overspending—not on lavish vacations or anything major, but $10–$100 beauty products, clothing, furniture, and so forth. Small luxury goods. And yet, I have a ridiculous amount of that stuff already, far more than I can handle.
I’ve been patting myself on the back for having gotten so strategic (for the first time in my several years of adulthood) about minimizing costs by combining promotions and only buying things that are deeply discounted, and I’ve been paying more than double my student loan debt payment monthly dues plus completely paying off my credit card balances every month (I have around five rewards cards I use regularly). I’ve also paid off over $20,000 of student loan debt in 20 months with around a $30,000 salary.
Still, far too much of my income is going toward discretionary expenses and it’s needlessly hampering my journey toward debt payoff.
So I’m going to have to take some drastic measures and cut out every expense except for the ones I truly need (while keeping the mandatory expenses as low as possible as well).
Here are some of the little pleasures I’m putting a hold on:
- Gum, soda, ice cream, and other “self-entertainment foods”
- Going to the movies
- Eating out
- Music streaming services
- Gym membership
- Beauty and personal care products that I don’t need (such as Birchbox)
- Professional haircuts (a $10 pair of hair cutting scissors and a willing helper does the trick)
I’m also going to try to limit my food expenses to $100 a month. Maybe that’s too drastic, but I think I can manage.
The only exception to all of this is mini-vacations. I go to visit my family a few states away once a year, and do some outdoorsy things here in Washington when it’s warmer out. However, I’m going to try to limit the total costs (including airfare) to $400. Nothing extravagant.
In order to maximize my available cash, I created a table in Google Sheets listing all of my available money sources—I have a lot of gift cards, cash back site accounts, rewards points accounts, etc., with around $10–$30. I didn’t think they amounted to much, but to my shock they added up to over $300! A lot of those amounts have an expiration date that was drawing near due to having largely forgotten about them, so I’m glad I took the time to assemble it.
I also created a second table listing my expenses, so I’m more aware of how I’m spending my money and whether I’m overspending in any category. If I’m getting close to my monthly food cap of $100 and my annual vacation/weekend trip, etc., limit of $400, I’ll cut back.
Recognizing and formally committing to your goal are the first steps in achieving it. Vaguely thinking “I’ll try not to spend much” without keeping tabs of exactly how much is leaving your pockets is a recipe for disaster. I feel confident I can take the next step and actually stick to a plan.
I’m excited to get to the race to the bottom of my debt and finally be ready to start building up a reserve of savings and investing, even if it means putting up with foregoing some pretty things and small luxuries. The end-payoff will surely be far more satisfying.