December 1st is the six month mark of moving to Wisconsin, living with Matt, and being engaged. It’s been a tough six months but I’m slowly finding my groove and I’m trying to make the best of it.
December 1st also marks five months of having a dual income for one household. I’m not very proud of what we have to show for it. I have a small dent in my credit card (good, not great), we have a few wedding things paid for (not enough to justify our small savings), and I’ve spent way too much on spoiling myself. Between trips to visit family and friends nearly every weekend for 6 months, clothes to cheer my bored self up, and the unexpected expenses of life, my savings rarely increases.
We have a lot of big and expensive events coming up to pay for, specifically a wedding and a few career goals. I have been thinking about how to cover all of this, plus make a bigger dent in our student loan debt. I started KPR, and that certainly has potential to help but it’s not enough. I took a long, hard look at my budget and realized that cutting back on some of the frivilous things is worth it to pay for these bigger, much more important events.
So I’m starting fresh with a spending diet for 13 months. I thought about starting January 1st as a New Years Resolution but why put it off when I could start a month early and save that much more money.
So December 1st is the day. (Technically though, I’m going to start it on November 27 because that’s my payday and it makes things a little neater and more of a fresh start but the 1st sounds better.)
- I save $150 per paycheck – used for presents, wedding stuff, and larger purchases that Matt or I need
- I pay $125 towards my credit card each paycheck
- Matt and I both allow ourselves $125 to spend however we want per paycheck
- Every other penny is accounted for with bills and food and gas
I took this spending diet on myself, so I am not forcing Matt to join me. He is in charge of how he wants to spend his money and that’s ok with me. This challenge is for myself, but he is welcome to join me if he’d like.
Here’s how it’s going down:
The $150/paycheck that I save, I will do better to keep it that way. I am way too flexible on what I use that money for and that needs to stop. This might sound vague but I will consider each withdraw before I make it. Honestly though, I’m much better with out of sight, out of mind so I am tempted to keep it hidden in a harder to access place. However, we will have to use that money for some things so I want to make sure it’s a smart location. I have 7 days to figure it out. Either way, even if I kept most of it in tact, I would save $3,500 in 13 months.
The $125/paycheck that I pay my credit card with will stay the same. As important as it is to save for the future, it is important to tackle debt. Staying at this rate will get my credit card to a balance of $0 in less than 13 months. Convenient timing, eh. Then our snowball effect can continue 🙂
The $125/paycheck that works as my allowance will be changing. I certainly do not need to be spending $250/month on random stuff I want but don’t really need. That’s $3,250/year! That’s more than my credit card balance! Although I will not be cutting this category out all together so I won’t save quite that much, my goal is to save $1500 of my allowance to go towards savings and my career goals. I will save $60/paycheck and spend wisely with the rest. I don’t believe in putting my life on hold because of money but I do believe there are smarter ways to spend it to get the most out of it. And to me, my career goals are worth any sacrifices I will have to make.
That means by next December I will have $5000 in savings and will be completely out of credit card debt.
This does not account for raises, tax returns, additional income with KPR, or those exciting months when I get 3 paychecks instead of two (April & October). That money will be spent as we see fit, however I’m guessing I will want to split it into thirds (credit card, debt, and a fun treat for my hard work). This also does not factor in that Matt saves much more than I do each paycheck since he saves more and I put more towards debt until one of his debts is next in the snowball.
I am very excited for this challenge. I’ve waited for so long to have more money than just making ends meet and I’ve wasted six months of it so far. I am in total control of my finances so I have no excuse to not make progress. And trust me, I will document all of it.