I don't normally talk about "the money" on this site, but I have a big problem that may impact the projects that I document on the blog, so I think you deserve the dirty details. It's also that time of year for resolutions, so without further ado:
The problem: I'm a waster. A money waster. A big-time, celebrities-going-bankrupt-after-appearing-on-CRIBS money waster. A couple weeks ago, I casually clicked on the 'Spend Analyzer' feature on my Discover card website, and immediately yelled "HARK THE HERALD ANGELS SING, that's a lot of monies!!!" It was the Monday before Christmas, you see. Then I downloaded all the year's transactions from my other credit cards and bank accounts I use for purchases, and was HORRIFIED! Completely disgusted, I added all of our checking and credit card accounts to the free online budgeting tool Mint to see how we did as a couple. IT WAS SHOCKING! I spent over one third of my after-tax income on frivolous retail purchases. And thanks to me, we also spent over one third of our combined take-home pay on just these categories:
General Shopping - clothing stores, speciality stores, places like Target, Kohls, TJ Maxx.
Home Furnishings and Minor Improvements - Menards, Home Depot, Pottery Barn, Overstock.com, Etsy, eBay, and any purchases I tagged as 'home' items.
Eating out - together, we spent about 2k on eating out last year, or $166 a month. We also spent $4500 at grocery stores, which means we're drinking too much booze because two people don't need to spend almost $400 a month on groceries. (Groceries are not included in the '1/3 of our income' figure, either!)
Cash (ATM Transactions) - $1700!! Where did all that money go?
The bad news: We have added next to nothing from our paychecks to our savings accounts for the entire year. This is probably because our nice big tax return (which included a $7500 homebuyer tax credit) gave us a sense of security and a fat savings account. We could've paid cash for a new car with the money we spent on 'things.' What a sickening feeling.
The good news: We both contribute alot to our 401k (I've put in 12% for years) and have CDs/money market accounts that don't ever get touched. We do have savings in place already. We are not in debt, every credit card and bill is paid in full every month, so we're not necessarily living beyond our means and definitely aren't paying any interest. In fact, we earned TONS of rewards on our credit cards. We have a pretty house, and I have lots of nice outfits.....hey, I gotta make myself feel better somehow!
Why it happened: It's totally my fault. I was excited about the house, and went all 'Shopaholic Takes Wisconsin' decorating it. I also let the blog be an excuse to buy many things that I shouldn't have. Combine these things with my hardwired-since-birth need to buy clothes constantly, and you've got a serious spending problem. We also love to drink $10 bottles of wine every week, watch premium cable channels, and go out to dinner. Oh yeah, and we bought a $3,000 mattress, so that didn't help the bottom line, either.
The resolution(s): To give myself a monthly budget of 'fun money' that I can use for whatever I want....and when it's gone, it's gone. To HOLY-COW-STOP-BUYING-CLOTHES because I have an entire room devoted to my clothes and only 1/3 of them will fit in there...I'm like a Midwestern, un-glamorous Mariah Carey. To stop overspending to get that 'perfect look' seen on other blogs. To be more like thrifty goddess Kasey* and stick to a budget that helps me put dollars into savings, not into more Etsy pillows and Pottery Barn rugs. To challenge myself to do things more cheaply. To save for a new vehicle because mine is almost 6 years old and won't last forever. To use Mint to closely track our spending throughout the year to avoid this suprise at the end of 2010.
So tell me....how many of you are shocked when you tally up your spending at the end of the year?? Please tell me I'm not alone!
* ps Kasey, I hope you can still respect me now that I've proven to be a 'money loser!'
Building a Chicken Run: Part One
3 hours ago