Thursday, December 27, 2007

Spending Relapse

As I alluded to earlier, the budget has slipped in December. Big time. I'm embarrassed to admit it, too embarrassed even to look up how bad the numbers are. All I know is this: in December, all we paid to our credit cards debt was the minimum payments. On top of that, we had covered our December minimum payment towards the Discover card with our November payments, so we didn't even put anything towards that debt. Our grand total towards the credit cards in December was $198. Somewhere, the credit card companies are cackling with glee.

As I predicted in November, the month of December was really tough. I was really quite busy and didn't pay attention to our finances hardly at all - just enough to pay the bills. No budgeting, no coupons, lots of buying. Most of the shopping was for Christmas gifts and related items, but those budgets there were still *ahem* broken. And we went out to eat quite a few times throughout the month. I am such a bad example! Maybe I'm a what not to do?

The good news is that we didn't use our credit cards. At all. Christmas, while expensive, was all cash.

All these add up to a disastrous December for debt payoff. I think the kicker is that when I allocate money towards a certain budget category (like Christmas gifts), but I don't spend it right away, I throw it toward the debt. So some of the credit card payments in November should have been made in December. I don't know if I prefer it this way or if I would rather have a sub-accounting system to allocate my money towards its final destination. I know that when we get a savings account, I will need sub-accounts to keep track of it all.

I need some ideas- when you have money to use a certain way, but not immediately, where do you put it? How do you keep from using it for something else?


Lazy Man and Money said...

I thought you were finding great deals on the Christmas gifts.

Perhaps you can pay yourself first by transferring a set amount of money to an ING Direct account or something like that. That could make it more difficult to access.

JvW said...

I did find great deals, but then I went a little overboard. I like the idea of transferring the money to another account, maybe that will work.

Sharon said...

Thanks for blogging me! I am new to blogging, although I've been lurking the financial blogs for months! Finally decided to become accountable for my finances in the blogosphere. Congrats again on an all cash Christmas!!

NJ said...

I sort of take the money out of the checking account by writing "Hold for XXX" in the check register and deducting it. Then when I need it, I write "bring back XXX" and add back just what I need and then subtract it out on the next line. I keep track of it in the back of the checkbook with a small sticky note (especially if it's a small amount) until it's all been allocated.

Debt fretter said...

Geez, you mean you managed to meet your repayments at Christmas time AND pay for Christmas without adding to your credit card bill?
In my book, there's no way you should see that as failure. I know you probably aimed to get further ahead this month but actually, you still did really well.
You won't be one of the sad sacks in January trying to figure out how to get back into financial shape.
Don't be so hard on yourself!

wealthy_1 said...

Stop being so hard on yourself. You should be doing the happy dance because you paid cash for Christmas presents. Think of Christmas in the past and how you probably had a credit card hangover in January.

Remember this is a marathon, not a sprint. There are little bumps in the road. So you stumbled over this one. You're going to avoid many more than you stumble over!

Continued success!

JvW said...

Sharon - thank you and welcome to the blogosphere!

nj - that sounds like a great system; however, I don't use a checking register. Maybe I should try to emulate it electronically...

debt fretter - thank you for your kind words - you make me feel much much better!

wealthy_1 - as always, words of wisdom. I need to remember that this is a marathon. Thank you!