Dollars and Cents

Having lots of time to burn Saturday, I found myself pouring over my planner. In it, I list every transaction I've made using my debit card, all the bills I've paid, any cash I take out of the ATM, and precise information about my gas consumption (down to calculating my mpg after each fill up).

It may seem a bit obsessive, but when I started noting money information in my planner, I had just started a job with no set hours. I used my planner as a backup for verifying my checks each pay period. Since then, I've increased what I log, figuring knowing more can only help, not hurt.

On Saturday, I set out to track my spending by opening up my planner and crunching the numbers. Though I have had all this information, going back as far as this time last year, I have never used it to figure out what I was doing with my money. So, I decided to bite the bullet that night. I copied all the numbers, separated by month, broke everything down into categories, and added it all up. It wasn't pretty.

The quick and dirty synopsis is, I'm broke. I only calculated January through March of this year, but I found I'm running about $3000 - $3500 in the red. Yes, the three zeroes are correct. I am that much in the hole.

The impetus for this experiment was noticing my checking account looking a little small. It seemed to me that it shouldn't be so low so soon into the year. My hunch was correct.

Getting into the details of the numbers, I found my average income is only $100 more than the average total for my bills. And this number doesn't take into account the money I spend on gas each month, which wipes out that minuscule cushion.

The more worrying numbers are the amounts I've spent on food (eating out too much), the random money I've taken out of the ATM (used how?), and the amount I've spent on Play. Play, as a category, includes money on gifts, books, CD's, and other unnecessary nonfood purchases. All told, these three categories alone set me back on average $1000 a month.

The point of this post is to say to myself, and the online world, that I have to fundamentally change how I spend money. Otherwise things are going to get bad, fast.

Moving in with my SO will help, but that step alone is not going to solve my problem. It will, at best, only slow the bleeding.

No, I have to make changes, big changes. I've never lived on a budget. I've only cared about money in as much as making sure my bills are paid each month. Now I have to look at every penny I spend. Now, I have to treat money with the respect it deserves and the fear I have of loosing lots of it.

I posted some time ago about how Ella left me a large sum of money from her death. I am so thankful that money was out of my reach these past few months. I locked it up in an account, that I cannot access until the end of this year, back in December. If I had had access to it, some much more money would be gone.

So I'm starting to work on a budget. As my life currently stands, there is no way for me to be making money. I will be constantly in the red for at least the next few months. My goal, though, is to minimize the damage. I have a list of things I need to do by June to start making the situation less painful.

1) I'm going to quit my gym. Though I need to loose weight to qualify for lower costing health insurance, that is fifty dollars every month I will save. I can buy a set of weights, I already have two workout DVDs I haven't used, and I live in a nice area where I see plenty of people running every day. I will now be joining them.

2) I'm going to close my storage unit. The rental fee is $60 a month. All the stuff in it I want to sell or give away anyway. So now is the time to get off my butt and do it.

3) Eating out is going to be brought down severely. The one meal I may have with friends on the weekend is not the biggest of burdens. In fact, this weekend I spent only $20 on food, compared to the $35 I spent during a working dinner last week. But eating out with my SO is going to end.

4) Still on the food front, I'm setting myself a limit on how much I can buy in groceries each month. Most of the time, I would buy what I wanted and not think about how much it cost. Now, I have to set my meal plans for the month and buy accordingly, no more.

5) I'm limiting myself to $100 out of the ATM per month. This will cover incidentals (co-pays, meter parking, when I really really want a soda).

That's where I will start, but I'm sure that's not where it will end. Besides moving in, the second biggest expense I need to rid myself of is COBRA. $450 every month is an incredible burden, though the idea of getting sick without it is scary. I have to redouble my efforts to loosing weight, for my health and my wallet.

I'm going to keep the financial log going, analyzing my spending each month and readjusting it as needed. I hate to think what would have happened if I had not sat down and came to this realization.

My Saturday analysis was a shock and awe campaign that has left me bewilder and amazed. I thought I was doing well financially. I thought I had learn from the burden my mother faced with credit cards and bankruptcy. That experience, apparently, was not enough.

But Saturday also opened my eyes to what I need to change. I know what I have to do. I'm going to do it.