The first step was acknowledging that I had a problem and desperately wanted to change my habits. The second step is creating a plan and taking action. I’ve almost finished ‘Debt Free Living’ by Anna Newell, you’ll see me refer to her as ‘Anna’ throughout my post. She breaks everything down step by step, literally anyone can crush their debt by following her easy instructions. Even though the instructions are “easy” sticking with them is the tough part.
This week I created a reverse budget per Anna’s instruction, using the last 3 months of bank and credit card statements to see where my money was REALLY disappearing to. This shed light on my spending habits and showed me where I needed the most improvement. I broke my reverse budget down by categories: housing, food (yikes), utilities, transportation, clothing/makeup, debts, and miscellaneous items. I’m fortunate that I don’t own a car – so no car payment, insurance or gas. I’m blessed to live a mile away from work and my job provides me with a paid Orca pass.
I added up each category by month and divided by 3 months to give me the average of what I was spending. WHAT. THE HELL. My jaw hit the floor when I saw just how much I was spending. My average for food came out to $1K a month, how is that even possible?! Granted, my boyfriend and I live together and he’ll Venmo me half for groceries – I was still charging my bank or credit card $1k a month on average for food. Of course this wasn’t all groceries, we were eating out a TON, using Doordash, and I was paying for lunch at the Microsoft cafe everyday. Something that inspired me to make a change as well – I work for the largest tech company on the globe with engineers who make 6 figure incomes and THEY bring their lunch from home. What the fuck am I doing? I can do that too, and I’m going to start.
Clothing and makeup was nearly $400 which is absolutely unnecessary. 1) I hardly wear makeup because I’m so lazy. I would much rather sleep in and race to my bus in the morning. But I get tricked by the Sephora emails, coupons, point system and I want so badly to become a Rouge member and get my $100 gift card and preferred rewards. But what is it really costing me? 2) I wear the same damn thing every day, so why am I buying more clothes? I literally grab the same pair of pants and 1 of 4 different shirts every day.
Even though I mentioned I live a mile away from work and my job provides an Orca pass, I was spending an average of $150 on Lyft every month. In November my boyfriend and I traveled to California for Dreamstate festival, so we spent $ on Lyft there. But I was still using Lyft in October and some of December. If I slept in too late and didn’t want to take a later bus into work, I would take a Lyft – and that shit ADDS up. So no more Lyft, works pays my fare to get there and are flexible if I come in/stay late.
With the truth of my reverse budget in hand, I started to honestly breakdown my ‘wants’ vs ‘needs.’ I completely eliminated transportation. Unless my boyfriend needs help with gas, there’s no reason for me to be taking Lyft or paying for transportation. I also eliminated additional clothing. In fact, I just cleared 40% of my closet donating items to Goodwill, selling popular brands and pieces on Poshmark (@jrosefrank – check it out) and sending the remaining clothing to an online consignment shop (ThredUp) for an estimate and pay out. I also have so much hair care from Monat and make up from beauty subscription boxes that I should be set for a while. I WILL spend good money on my skin care and hair dresser, but those costs occur every 3-4 months giving me plenty of time to burrow away some $$$
Food… this is the most common over spend for a lot of people. To be honest, grocery shopping didn’t happen that often – they were few and far between which left us ordering food or eating out a lot. To solve this problem, we started using Instacart to have our groceries delivered since getting to the grocery store frequently enough was hard on our schedules. Plus grocery shopping is kind of tedious and full of temptation. Yes, this does cost an annual fee but we weighed out the pros and cons and decided this would be a benefit to us. The annual fee is $99 a year with NO delivery fees, only a tip for your shopper. The time and resources saved (gas and miles to and from the store) is priceless for me. Plus you can add a previous order of staples to your cart and adjust as needed. That being said, I won’t be ordering Doordash any longer – no matter how tired, hungry and lazy I am. Eating out will be reserved for special occasions, but this may change later on down the road – the first few months will be a trial.
Obviously this is my first draft of my plan. I’m thinking of myself to be something sort of like a scientist, testing my hypothesis and making changes as needed along the way. I don’t want to be too aggressive with my approach in the beginning – I’ll make necessary changes and leave room for growth along the way. I’ve already managed to pay off one credit card and it isn’t even January 2020. I paid a large sum towards my next credit card in line and never felt so satisfied to be paying a bill. Any money remaining in my account before the next paycheck will go towards that bill too. The snowball method on steroids – and this is just the beginning.
This would be difficult if I didn’t have the support of friends and family – but I’ve received an overwhelming amount of support. Even though I was nervous, yesterday I posted my goals on Instagram (social media platform I use the most) with a short video of me explaining WHY I’m doing this spending fast – EVERYONE was so psyched for me, on board with my goals, and wanted me to share my journey. Here are the goals I shared:
In 2020, I commit to a spending free lifestyle
- Making mindful spending choices, honestly weighting wants vs. needs
- Paying off debt 10x faster
- Saving up for my 2 big vacations in 2020, instead of putting them on a credit card and “paying” them later
- Eliminating temptation by reducing screen time
- Changing my consumerist habits and learning to live with less
- Spending more time reading, writing, dancing, lifting, cooking and pursuing other creative outlets
- Spending less going out to eat and drink with friends, spending time doing free activities with them
- Earning true financial freedom
I know I won’t be perfect, but part of the journey is learning how to deal with mistakes along the way and forgiving myself when I fail. More than anything, I’m excited for the year ahead, the challenges it may bring, lessons to be learned, and the many debts to be paid.