While we're on the topic of tidying up, it's important to remember that decluttering your physical spaces is an enormous accomplishment, but more than likely, your post-clutter self has recognized other areas of your life that need decluttering as well. It's weird that decluttering works like that: Clean up one thing only to realize that another is cluttered, too.
My decluttering adventure led me to recognize other areas in my life that were cluttered--not necessarily physically, but emotionally as well. I bravely faced the fact that I had a highly cluttered financial life (among other things). I set out to apply my decluttering knowledge to my financial life, and I'm thrilled to report that six months later, I'm rocking a new regime that's serving my present and future selves quite well. Not that it was easy.
After decluttering my house, I recognized that there's a lot of money I want to spend on home improvements. The hubs and I want to update our leaky master-bathroom, and I want an updated, shiny, white kitchen with a cement-tile backsplash. These things have been on our family wish list, but alas, daycare payments, replacing cars that had bit the dust, and life costs prevented the dream from becoming reality. Poo! (I used a stronger expletive.) What the heck?
I didn't have to look very hard to discover what the heck. I'd been running up a couple of credit cards to keep up with my bad spending habits, and each pay period was playing catch up from the pay period before. Whammo--suddenly (again!) I was on defense instead of offense with no bathroom renovation in sight.
Here's what I did once I decided to declutter my financial life:
1) I gave myself a good ole' fashioned mental lashing along the lines of DUH! NO KIDDING! WHY DO YOU GO TO WHOLE FOODS SO MUCH?
2) Then I got real and I got busy. I was determined to declutter this financial mess and declutter it fast. But you know what stinks? Debt is not something that can be tackled fast. It's rather slow. But that didn't stop me. I was all, "Let's do this. NOW!"
Here are the steps I took which allowed me to pay off a hefty sum of consumer debt in six months.
My Friends Clint, Craig And His Brother Ebay
I grabbed everything of value that I wasn't using or needing anymore and spent two days photographing and listing items on Craigslist and Ebay. I sold about 10 pieces from Anthropologie, 3 pairs of shoes, and 3 pairs of jeans. Although prepping items, packaging them, creating listings, and running to the post office ain't no carnival, I did it anyway and made over $500 on my old stuff. Each time I'd complain, I'd be like, "Shut it, sister. Remember what this feels like next time you want to swipe the credit card!"
I also recouped $130 from someone who owed me money from a prepaid job that she skipped out on. That, plus some money Clint owed me (he may owe you, too), helped knock out more of the debt.
Another thing I did was cut a deal with my hairdresser for services-in-trade. Although I couldn't apply that to debt, hair is now an expenditure for which I won't have to shell out cash for a while.
Yay, me! Momentum!
Gettin' Honest and answerin' questions
Once I'd gone nuts selling my stuff (and this took 3 weeks from beginning to end), and recouping money owed to me, I realized that I needed a mental reboot in order for my new fiscal fitness plan to take hold. I needed more than a band-aid; I needed a full-on overhaul.
And this is where the mental decluttering comes in.
questions to help you address your money (or any) problem
- What am I doing to keep this mess going?
- How am I contributing daily to this problem?
- What small steps can I take today to make this situation better?
- What habits are contributing to keeping this mess going?
- How can I ensure this doesn't happen anymore? (What long-term plans can I enact to prevent myself from relapsing?)
When you're addressing these questions honestly and completely, remember to avoid the victim mentality. Focus entirely on your contribution to the problem. Tackle your bad habits. This will allow you to find solutions that you can control.
It wasn't hard to identify my bad habits that contributed to my debt. First, I'm a terrible planner; second, I feel that I deserve things because I work hard for my money; and third, I like to ignore unpleasantries. My terrible planning meant that I'd spent too much on meals (cough-cough-Whole-Foods) or would pay more buying toilet paper at Trader Joe's rather than Cosco. My "I deserve it" attitude meant that if I wanted something, I'd buy it on the credit card if I didn't have ready cash. Third, I have a talent for ignoring things when they're inconvenient. "Yeah, that trip is coming up and I need to save for it, but what the heck, I'm going to want a great outfit, too--so I'll buy the outfit!"
I'd been in the same spending pattern for far too long. Absurd. I'd spend freely, get into debt, pay off the debt, and then start all over again. Come on, sister!!
Gettin' honest meant facing this reality and recognizing that it's going to be hard to undo bad spending habits. But, if you don't start, then you don't start. So, I started and made some new friends.
My New Friends Dave Ramsey & Mr. Money Mustache
I'd already read gobs of books on personal finance. Frankly, a lot of them were over my head (except this one). Instead, I began listening to financial podcasts and reading money blogs. Two podcasts helped me get on track more than others. They were Optimal Finance Daily and Budgets and Cents. (This episode was especially powerful.) By immersing myself in the world of financial fitness, I was able to replace bad habits with good ones and adopt a mentality of saving over spending. By listening every day, I forced financial fitness to the front of my brainspace with almost cult-like devotion.
what i learned from financial blogs and podcasts
First, the biggest truth of all truths relating to money:
- Spend less than you earn.
In order to do that, you have to:
- figure out your expenses and where your money's going by examining your bank statements and tracking your spending. (This is how I learned about my Whole Foods problem.)
Once you know where your money's going, you can
- figure out what to cut out, what to cut back on, and how to save on things you can't eliminate.
then you can
- make the changes you have to make no matter how unpleasant, inconvenient, or unfun they are. Every uncomfortable moment and every denied purchase is a reminder that you screwed up and you're doing something about it. Take your mental lashings and then high-five yourself for taking action.
But it's less sucky when
- some time passes, and you can see your progress, and you can celebrate your bank statements instead of dread them.
But you can't sit back and gloat because
- it's too easy to fall back into the spending pattern and find yourself in trouble all over again. That's why it's helpful to schedule new habits into your weekly routine.
new habits that are helping me stay on track
- Whenever I'm in the car or walking the dog, I listen to financial podcasts. They fill my head with useful knowledge, help motivate my financial fitness, and teach me how to budget.
- I check my online bank statements every day. This way, I'm conscious of what I have and what I can spend. If any surprise transactions happen (like the check you wrote to Girl Scouts four months ago was finally deposited), you're not caught unaware.
- I set up automatic deposits into my savings.
- Whenever I get paid, I look ahead to see what costs exist in the following two weeks. For instance, this week I had to plan for the kids' school pictures, my daughter's birthday dinner, my son's camp fee, and a prescription. I also plan for monthly bills that are coming due in the weeks ahead. I subtract these expenses from my bi-weekly budget and see what's left over. Then I know how much discretionary spending is available. I take as much of that money as I can and slam it into longer-term savings needs like birthdays, Christmas, and vacations.
- I'm forcing more family conversations about financial health. This helps my husband and I align our goals, work together, and adjust our priorities.
- I removed all credit cards from my wallet. I know some experts recommend you cut them up, but I don't feel comfortable doing that yet. I pay with a debit card or cash now.
I still need to work on meal planning and grocery spending, and continue to avoid the mall where I'll easily be lured to Anthropologie and Nordstrom, my favorite places to shop. But, seeing measurable progress helps me stay motivated and proud of myself.
It's so funny to see how decluttering my house led to me recognizing the need to declutter my finances. You'd be surprised to see what your decluttering uncovers. Really! It's wild!
Do you have bad spending habits like I have? Did decluttering your home reveal other issues in need of decluttering? I'd love to hear about them! Please share in the comments section below.
If you'd like to schedule your own decluttering session or inquire about my services, contact me and let's chat!
Keepin' it real,