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My Money Diet

With my car gone (still sad) all of my finances are now out of whack. I was in good shape with the way my paycheck was budgeted, but it didn’t take sudden drastic changes into account.

Post Grads today are making entry level salaries, if any salary at all, and paying back some of the highest loan debts in history. None of this is news, though. It’s a well known fact by now. We got it bad and we know it.

My point in bringing this up, though, is to talk about how quickly everything can turn around. Just when we think we finally have things figured out, we have calculated the budgets, we have tried to save the right amounts; something huge goes wrong.

When I got the news from my mechanic I went into full blown Freak Out Mode. My anxiety levels were off the charts, I couldn’t sleep, and I had to fix it. In less than a week I had turned in my plates, sold my car to a junk yard, went to 2 different car dealerships to research a lease, made a spreadsheet with the information I gathered about said leases, opened a new savings account specifically for the car, and landed 3 babysitting jobs to start earning money to put in the account.

In the words of a friend, “Wow, your freak outs are crazy productive.”

Why yes, yes they are. It was during this week that I started planning my Money Diet.

  1. Organize all your debt information in one place. I have Student Loans as well as credit card debt from fixing my car throughout college. I needed to know exactly where I stood in order to start making it better.

My spreadsheet has the following columns for my loans. You may need less (or more even) but it’s a good place to start:

Loan – Private/Govt – Original Amount Lent – Principle Amount – Outstanding – Interest Rate(s) – Monthly Min. Payment – Actual Monthly Payment

And my credit card sheet has these:

Card – Limit – Amount Outstanding – Interest Rate – Monthly Min. – Monthly Payment

Being able to see all my interest rates laid out in front of me showed me a good place I can start in cutting costs. I can look into consolidating loans at a lower rate and transferring the outstanding balance on my high interest cards to one that has a lower rate.

2. Evaluate your savings plans. When I started this freak out I had one checking and one savings account. Then I realized how ineffective that is for actually saving up. I realized I needed a different account for each financial goal I had. Putting everything into 1 lump account doesn’t help much when saving for 3+ different things. So I opened a new savings account for my new car. My bank also offers a Savings Plan so I can set my goal amount and the date I want to achieve it. It helps a lot for tracking my progress.

3. Only spend on the essentials. Gas, food, toilet paper, rent. And by food I don’t mean ordering in or going out. I planned out my meals for the next 8 days and bought only the things I needed to make them. I spent 20% less than usual at the grocery store because of it.

4. Don’t count pennies like an anorexic counts calories. Being smart about your money, and saving it, shouldn’t consume your life. You do still need to be happy, and have some fun. Just try not to spend a lot while doing it.

I’ve learned a lot since I started on this new financial adventure. Believe it or not I’m actually excited about my savings plans and want to expand into real investments soon. I’ve realized that the more aware I am of what is happening to my money, the more control I have over it. And hopefully all this will prevent another Freak Out, even if it was productive.

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About Shikole

I just moved to Austin, TX after living in the DC metro area for 6 years. I love wine, writing, exploring and fun. When all of those things can happen simultaneously, I'm a happy camper.

Discussion

2 thoughts on “My Money Diet

  1. Congratulations on coming up with a good plan! When my husband and I got married, I made a few similar spreadsheets. We live by the “envelope system” (spending cash out of Grocery, Entertainment, and our own personal envelopes), and contribute to house savings and general savings each month. The extra is our “nest egg” that we dip into when an unexpected expense like a car repair comes up. It’s worked well for us this year, and we’ve been amazed at how quickly our savings has accumulated–I hope you find the same success!

    Posted by Katie H. | May 20, 2012, 7:51 pm
  2. This is great advice Shikole! I don’t have separate savings accounts, but that is a great idea and I’m going to look it to it!

    Posted by Jenny | May 22, 2012, 9:47 am

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