My daughter and I just traveled to visit family, go to a wedding and spend some time with loved ones; Dad stayed home and worked. I had a budget and stayed within the boundaries, but I’ve been thinking about the purchases I made while I was there. And, especially while we are working to get out of debt, I’m having all this…buyer’s remorse. No, shopping guilt. Or a combo of the two. I can’t seem to put words on it, but I hate this feeling.
You know that feeling, don’t you?
I knew we were going to spend some money. But this feeling is not going away. It wasn’t a splurge, I double checked my purchase question filter and talked to my husband before doing anything big, but I’m having a hard time justifying spending a little money while we are making small sacrifices that are adding up to big steps in our debt-free journey.
In doing the research, I discovered that it’s both. Better termed, cognitive dissonance. Which, in regular words is simply. “Look, I planned on doing this in my mind. But I had to make a choice to do something against that previous decision. And, I’m really not okay with that. But I had to. But I shouldn’t have.” And so on. I think you know what I’m talking about.
It’s shopper’s guilt because I feel like I shouldn’t be spending any extra money on anything while we are getting out of debt. Period. And it’s buyer’s remorse because travel adds up fast. Big ticket items cause that remorse. But both are necessary sometimes.
Retailers know we have this cognitive dissonance, too. (Side note: don’t you just feel smarter using this term in a sentence? Me too.) In fact, the Wall Street Journal had an article years ago about this very topic and what retailers are doing to combat this feeling. Consider this from 2009:
“It used to be about keeping up with the Joneses, and now it’s about outsaving the Joneses,” says Alexis Maybank, the co-founder of Gilt Groupe, which organizes online, by-invitation-only 36-hour sales of high-end merchandise from labels such as Burberry and Matthew Williamson. “We need to encourage people to get excited about fashion.” (The double entendre in her company’s name dates from an era—2007—when the guilt that went with shopping was far less disruptive.)
And the retailers know we are not spending as much time in the stores as we used to, so they are happy to come to you. Online. Open just for you. Anytime of the day. No matter if you’re dressed for the day or not. Any whim- can be yours. Just a click away. Guess what? They’ll even deliver it right to your door.
There’s also another phenomenon with Americans who buy, experience the guilt and return things promptly. It’s called shopping bulimia. How’s that for a disgusting visual image? The Today Show explains it: “Shopping bulimia is when people are overwhelmed by the desire to buy something in order to feel better, but once the initial happy buzz of buying wears off, they realize they can’t afford their spree, so they quickly return their purchases.”
That buzz is real. How do you fight this? Determine these three criteria before making a purchase:
1. Ask yourself several questions, like: Is this what I need? Will this help our family? If I go home and think about, will I want it enough to come back tomorrow to buy?
Clearly, your questions will be different from mine, but set your questions now before you ever walk in the store or look online.
2. Look long-term. Will this be an item that you can use next week? Next month? Next year? Set a timeline for how long you will need the item to justify the purchase.
3. Let yourself live a little. It’s okay to have something you enjoy. Just because. And, it it brings you a little happiness, even better. Just make sure that this is a little something, instead of shopping to fill a hole in your heart or soul.
I’m going to be working on this issue. I plan to report back on what I’m learning. The real question is: How do you deal with this?
Look, the word budget is not a fun one. It sounds almost…miserable. Sure, you think you are pretty smart with your money. You try to stay away from the splurges and plan for the big expenses, right? I get it. I was exactly right where you are. It’s only been a few months that we have been on Dave Ramsey’s Financial Peace University and I can see how I was “nickel and dime-ing” us down a financial drain. Yikes. All the little mistakes I was making with our money was creating big problems. I don’t want you to go through that. Avoid these 11, no there’s 12, no, Avoid these 13 Mistakes and you will be making tremendous strides in your financial future.
1. Not having a budget.
I know, I know. The budget. It sounds constricting. It sounds like the super child locks that are so effective you can’t seem to get back in the door. Or cupboard. Or life. But the thing I’ve found is, the budget doesn’t constrict you, it actually lets you breathe financially. Here’s what I mean. I know before I leave that house that I’m only spending money on the things I’ve decided beforehand. No nonsense. It takes all the decision making frustration away. So, when I walk by the end of the aisle with a killer discount, I simply have to ask myself, “Is this what our family NEEDS, TODAY?” (When words are capitalized, they’re even more powerful in my mind. Like the booming voice you hear as the Super Hero stands triumphant with his cape billowing in the breeze. Promise.) Also, the sense of control you feel at the store is really incredible. You have buying power, rather than having the sales power you. Seriously. Set your budget and feel the freedom.
2. Not writing down what I’m spending.
Now this was originally listed as 1-A because it is part of number one, but is so important that it is listed separately. It’s a biggie. We had our budget set up, but we didn’t always write down what we were spending as we put the change back in the envelope. (And yes, we are using Dave Ramsey’s Cash Envelope system. Whoa. That is eye-opening!) Sometimes we would just put the receipt back in the envelope. Other times we were too busy and there were 5 people behind us at the grocery store- so we just thought, “We’ll get to it at home.” Whoops. If you don’t hold yourself accountable right then, you’ll miss it. And a $20 purchase doesn’t seem like that big of deal on the numbers, but if you do that once and your sweetheart does that another time…you can see where this is headed. Commit to writing everything down and watch how much more cash you have at the end of the month.
3. Spending money for something small. Right now.
I used to think, “Hmmm, this extra little something will really make today special.” Now, looking back I can see that it was me trying to enjoy something pretty, sparkly and just plain new and using the celebration/moment/memory as an excuse. That is ridiculous. You can add a couple of little things, but what makes life special is what YOU do. You make the moments. A thing is just a thing. (How’s that for profound?) If you want to make a moment special, put YOU into the moment. Write someone a note, take time to really listen, give of yourself to a family member.
4. Buying something today. Hello, Impulse!
Can you see a list of excuses here? I didn’t realize how I could easily rationalize a purchase- just because. I would think, “We’ve done really well this week, hon. Let’s go get that ________ (new movie, toy, TV sound system…even once I said tablecloth. Really, a tablecloth? Believe me, I know how lame that sounds,) and using that item as a reward. Take the time to think ahead and you will see how your money will really last.
A lot of times, it’s not your fault. The stores are set up to entice, to tease you to buy one more thing, add one more refreshment, surprise your sweetheart with this or that for your happiness. Fight the impulses and watch your own power increase!
5. Giving too much.
This one may sound a little crazy. I love giving gifts. I love surprising friends with a little something. A gift-giver I will probably always be. But not at the expense of paying for a small gift on a credit card at a love 12% (and up) interest. Now, I think “Is there another way I could show my love/appreciation/respect-for-that-trick-you-do-with-your-nostril in another way?” Usually, there is a great alternative that doesn’t cost much. And it’s much more personal. Bonus!
This has been another major behavior change for me, but I’m learning. I can see how by doing all of these little things, our family is turning the tide on the financial wave. It is getting exciting, too!
6. Not thinking long term.
A down payment for a home, a healthy retirement plan, an investment portfolio…these were all just hopes for us. We knew we wanted them for our future but hadn’t taken any action to get them done. Do you know someone who lives like that? They have a killer dream but are doing absolutely nothing to get there! What is that? We are taking the steps necessary to make our long term plan look just as good, if not better than the short term. That’s inspiring! I can’t believe the amount of stress that is eliminated when we open our perspective and get our plan in order. You can do it, too. I know you can.
7. Thinking only of myself.
This one is especially tricky for military wives. Deployment time, anyone? Wow. It has been months since your sweetheart has been home and several weeks since you’ve been able to speak, he/she won’t mind if you buy this amazing ____ (In my case it was somewhere along the lines on: KitchenAid Mixer, Quilting supplies, specialized car seat, make up set, powerful electronic gadget that I’m not even sure how to use yet…) You know, practical things.
Another one that catches me is Amazon. I love to buy books. I catch myself still finding a book online and getting ready to “Buy with One-Click,” then stopping myself and thinking, “Whoa, girl! Whoa…” (Have I always talked to myself like I’m a horse?) I can always talk myself into making said purchase with a couple of comments like, “At this discount price- I’d be crazy NOT to get it!” Now that just makes my husband laugh. Good thing he’s got a sense of humor about it, too. Can I get an AMEN?
I know you know exactly what I’m talking about here, too. I was using shopping as a mechanism for coping with the loneliness. I don’t want to do that again. Facing the loneliness head on is much braver. Honest. And completely empowering. Let’s think long term. Let’s think of the family. Let’s think of the best choice overall.
8. Trusting credit cards.
I don’t know how I just believed that the credit card was my safety net. Do you? They are marketed as the only way to get this, or this, or live large. Really, it is genius. I don’t need to get more sky miles, rebates and cash back when I’m paying an additional 12% interest. How did I miss this phenomena? When my husband was away on deployment, I thought that having a credit card was the only way that I could take care of my little girl while he was away. It was the fear guiding decisions, not wisdom. Just realizing that has been powerful.
Do you know what I trust now? Our savings. Our cash. Our plan and power to choose how to spend the money.
9. Misaligning my priorities.
This one goes along with the others. I could easily put a quick trip to somewhere on the same level as paying off that debt. I never had an established list of priorities on which payments or bills to pay first. So many people just pay the bills as they come, rather than have a strategy. Fighting off debt is like chess. You’ve got to have a strategy of exactly what you are going to do to conquer your opponent. (And between us, I am not a chess queen. Cheese queen? Perhaps, but not a chess queen.) Here’s an example. I had one small student loan of $1500, thank you Sallie Mae, and the monthly payment was $49. Do you know how many months I was paying on that teeny loan by paying exactly what the company was asking of me? What foolishness! And I did it for months, because I didn’t have my priority set to pay off the loan, but just keep making payments. No more, Señorita!
10. Thinking it was easier on all of us just to go out to dinner. Just tonight.
Oh, this one is one that still has me struggling. On those days when we have had a lot of activities, suddenly it’s 5pm and I have no idea what I’m going to feed our family. (Please tell me I’m not the only one who has experienced this sort of panic.) I don’t know how many times I’ve looked at my husband and said, “Let’s just go out. It will be so much easier.” Going out to eat seems like a quick fix, but think about it: how long does it take to get to a restaurant? Your kid will be starving by that time, is that really how you want to start a night out? Plus, you may have to wait to be seated, and order, then wait for the food to be prepared. It can take the entire evening. You are not just losing the money, you are losing an evening of real family time.
Is a restaurant meal worth that?
11. “Oh, it’s a quick run into the grocery store. I don’t need a list, I’ll just pick up a few things.”
Wow. I don’t know how many times I’ve run into the store for milk or bread and come out with…well, let’s just say, much more than milk and bread. Again, this means a real change in behavior is in order. I’ve got to have a list and keep it running to know exactly what we are missing, when we’ll be running to the store and pick up a few things.
Those places are like labyrinths designed to make us walk to the very back of the store to pick up the milk. They want us in the store as long as possible so we are enticed with all the goodies and savings, specials and deals available. Have your list. Stay focused. Save your cash for the good stuff.
12. No plan for holidays, birthdays, small celebrations and surprises.
Growing up I used to to hear about women who were doing their holiday shopping all through the year. I used to think, “They are crazy! How can they think that about gifts for the following YEAR?” I may never be a savvy shopper like that, but this is the first year of my life that we have a savings account set up just for Christmas/the entire holiday season. *Fist pump!* Do you know how refreshing that feels? We put just a little away each month and will not have to spend nearly “Half a paycheck” or more to celebrate the holiday season. I plan to report on how this has helped the holiday season run smoothly for our family.
13. Not thinking at all.
This one beautifully sums up all the rest. I have just learned to think more. Think about where the money is going, not just what is going on in my life and hope that the money lasts for us. Just training my brain to consider each purchase has helped me see the power we have in our small, daily purchases and choices. Budgeting really isn’t about restriction, as much as it is about thinking ahead. Thinking as you make a purchase. THINKING. We can get so caught up in our daily actions, that we are missing what we are buying. Take time to think. Realize what you are buying. Think it through.
Avoiding these budgeting mistakes will get you so much closer to financial success. And guess what? You absolutely deserve it! I want that for you!
Tell me now, what is one budgeting mistake that you have overcome? Did I miss one? I’d love to hear your insights.
“WHY are you doing this?” “So, what do you blog about?” These are just a few of the questions I seem to be answering a lot lately. I realized that I should start from the beginning.
We were in Hawaii for five years and while there, the military gives you COLA (not like a Pepsi,) but a “Cost of Living Allowance” for living outside of the continental US. When we moved back to the states, we thought that our finances would be in great shape because even living in Hawaii we always had cash to go out to eat, visit family when we needed to, or get the latest and greatest gadget. But, my goodness! When we arrived in August 2013, the transition here was so HUGE for us. With student loans and credit cards we kept finding that we had “More month left at the end of the money.”
The holidays were beautiful, simple and we had received a bunch of the usual Christmas cards. We read the holiday letters out loud as a family and my husband mentioned that it would be really good to have “some things that we could write on a holiday letter,” next year. And that was a starting point for us. A goal. Our goal was to pay off $5,000 in our credit card debt while we trudge through life with my student loans. Because “everybody has student loans.”
In January we were really trying to figure out to have a paycheck s- t- r- e- t- c- h out to get the end of the month payments. While he was driving to and from work, my love was listening to Dave Ramsey in the car. As we were taking our daughter to swim lessons one night, he mentioned that they have a class that would probably be really beneficial for us, and we should check it out. We went into the class and while our little one was swimming, I signed us up. I was ready. No discussion was needed. We were going to finally get some direction. It was time to change!
February 21st was our first class. We had a plan, scheduled the sitter, received the materials, and were all set to go. But our daughter was so sick with a cold. Too sick to stay with the sitter, so we decided that I should go to the class, because my love had been listening to Dave Ramsey for several weeks now- he had an idea of what the class was all about, I needed to go and learn. And, all of the sudden, I was smacked with FEAR. What was I thinking? I don’t know anything about money. I can’t do this. Why am I doing this? What if I didn’t get all the info- what if I put my family in financial ruin because the concepts were over my head. I was terrified.
Now, we live WEST of Seattle, on the other side of the Puget Sound. The church location where we signed up was in our area, but nowhere I’d been before. It was way out in the country. It kept getting darker, away from city lights as I drove there, and it was only making me more nervous. And now, I was going SOLO. The tiny little chapel had a neon cross that was the only light in the area, it reminded me of those hotels in the scary movies, out in the middle of the forest and the only lights on for MILES. Anyway, I went to that first class, and texting my husband before it started about being a little nervous, and the prelude music could only be described as “techno Jesus.”
It wasn’t nearly as scary as I had thought. People were really friendly and down to earth. I took notes like a crazy girl so I wouldn’t miss anything to report to my love. I was not just impressed, I was blown away! It wasn’t about cash, that first class, as much as it was about, “YOU can do this. Yes, YOU. You have it in you. You can change your family tree.” It was like he was talking to me. He was answering my questions.
Change my family tree? I thought about that all the way home. Both of us grew up in families that had to work to make it through the month. Don’t think this is complaint, it’s NOT. We both have wonderful memories of home, and family and love, but money was always tight. We want to take the best of what we’ve learned from our families and build on it. Change our family tree? Really? The entire drive home I felt so impressed that Heavenly Father was talking right to me. This is it, Amy. This is EXACTLY what you are supposed to do. This is RIGHT.
I walked in the door at home, and told my husband, “This is it! This is what we’re going to do! This is just for us…” and on and on. He looked at me and said, “Whoa! Mama’s lit UP!” And he was right. The fire was lit inside me. I learned about Dave Ramsey’s 7 Baby Steps on Friday night, we were blessed to have our tax refund in our account Saturday morning so we put our $1000 emergency fund (Baby Step 1) in a separate savings account that morning. Whew. Step one was done.
We’ll talk more about the actual HOW of what we’re doing, but just know that since February, we have worked to pay off more the $20,000. $20,000? Did she just say twenty thousand dollars? Yup. Sure did. And you can do it, too. I know you can.
In fact, I believe in this so much that I am happy to give away 1 free membership class for one of YOU! If you are married, you and your spouse will go to the class on me. If you’re single, this is just the class for you. I want you to feel the freedom that we are just beginning to understand and appreciate. I want you to take the reigns of your financial situation and get those dollars in control. You work hard for them. Keep them under YOUR control.
To enter, do the following: 1. Become a WomanEnriched subscriber by entering your email address on the right; and 2. Leave me a comment telling me you want to win and WHY. (50 words or less. I’m not trying to get all in your business, I just want to give this to someone who will actually GO to the class.) 3. Report back to me when you’ve started the class with your insights.
The drawing will be held Friday, May 30, 2014 at [8:00]AM PST. The winner will be announced on the blog and sent an email with instructions on how to enroll.
I can’t wait to hear of your story and success as we work to gain Financial Peace!
This is getting good. Oh yes, I’m so glad you are here with me! It’s been a quick first month of blogging, and oh, the lessons I’ve learned. We’ll talk about that soon, but what I want to tell you about is going to happen now. I lost my focus for a while. And, finally it’s back! (Cue the band music, raise the curtain, enter scene.)
Let’s #Switch2Rich. But girl, What does that even mean? I tell you what it means. It means that saving money, making every single penny work for you comes from the inside! No way. Seriously. This is the lesson that I’m learning over and over again. It comes from inside. It comes from YOU. If you’re having money problems, it comes from you. But, this is a good thing, because you can fix it! You can make your money work for you! You’ll be that crazy guy in the circus cracking whip at the Tigers of Cash! Go, crazy Cash Tamer! Crack that whip!
In fact, just texting my sweet sister-in-law this weekend made me realize that yes, I can do it alone. Yes, it’s better that my husband and I can work as a team, but BEST is when we are all working together to help one another. So, let’s switch it up! We can #SWITCH2RICH! We decided to cheer each other on, help each other with ideas, and especially, sending each other messages as we avoid debt, when we DON’T buy that adorable little something and use that money elsewhere. Go, crazy cash tamers!
This weekend we emptied out all the loose change from our trip and at the bank put it in one of the coin counting machines, it was 40 bucks! That’s $40 we were just letting float around the house and car. Not we can use that money to help our family #SWITCH2RICH. But I realized, that you have some great idea to teach me. We can all help each other and make a #SWITCH2RICH.
So, here’s how this works: Every time you think of a money-saving tip that has helped you, type it in (to Twitter, no less. I’m not sure about how Facebook will connect, we are in the beta testing mode right now. Okay, just kidding, I don’t even know what beta testing is- I thought they were those beautiful little fish in the plastic cups at the pet store.) Whoa. Holy sidetrack.
When you have that money saving/investing/using tip, share it and use the hashtag #SWITCH2RICH and let’s get this conversation going! I want to know what are you secrets to save. Maybe you have a great banking tip that has helped you, share it. Maybe you are making some killer bread at home so you don’t have to go to the store to buy some (and end up getting just a couple of bakery goods in the process.) #SWITCH2RICH
And here’s the really cool part. When we reach 100 tweets with the hashtag, #SWITCH2RICH, WomanEnriched will be giving away a gift card to Amazon for $100. What? Just for a tweet? You got it, girl. Just for a tweet. I can hear my friends thinking now, “Oh, she should give that away to someone who really needs it. I’m not going to do that. I’ll let someone else win.” Hey girl, don’t start the crazy! It’s going to someone, it might as well be YOU!
Maybe you could use it for school supplies in a month or two, or start on your Christmas shopping, or maybe you need something for the kitchen. I hope you enjoy it! Can’t wait to read what your favorite money saving tips are and to share them with WomanEnriched readers, they are so cool! I am excited just thinking about this! So here we go. Let’s #SWITCH2RICH