Going Clear....of Debt!

***NOTE: Once again, I had began writing this blog at the end of June 2020 and I forgot to post it. I'm going to post it now and keep the original writing date etc. Sorry for my inconsistency and thanks for reading! -Nathan

For the longest time I not only lived pay check to pay check but I never balanced my checking account/check book. I relied on logging into my account online or checking my balance at the ATM machine. This would inevitably lead to over drafts because there would be pending transactions that I did not take into consideration and had not posted, so it would be an unwelcome surprise the following day or week.

Fortunately as I've grown older, I have also grown wiser...at least when it comes to my finances.

I started really getting my finances in order back around 2016. I wish I could explain why I did it, but truthfully I'm not sure what made the difference as to why I decided to start it at that time and not before.

My method of keeping track of my finances came in the form of a Microsoft Excel sheet. It was just the easiest way that made since to me to keep track of it all and to create a few basic formulas to calculate the current and future balance of my checking account and tally it each week.

There are two things that I think excited me about it and kept me interested and engaged. The first one is by keeping an itemized list of every item I purchased each week along with any reoccurring expenses like utility bills or credit card bills. Seeing all of my spending staring back at me in simple text shown a horrific light on how much I was egregiously over spending each week.

The second thing that really got me excited about it was the ability to see into the future; at least on paper. Why this was so important for me was that it gave me encouragement and something to look forward to and a goal to aim for by being able to see how much money I could have as long as I stick to this budget.

With each week, I would enter my paycheck, which as a placeholder, I would enter the minimum amount after taxes, so for me that was working a straight 40-hour week with no overtime. I would enter this dollar amount in each week for what ever number of weeks I had created on my sheet. When I first created it, I believe I only created it out a year; but now I'm up to three years in advance, but more on that later.

Other place holders that I would enter into the chart in advance, were the reoccurring bills, things like rent, utilities, credit cards, car payment and insurance etc. Those items were pretty constant and so I was sure I could enter them into the chart knowing they weren't going any where. I enter those reoccurring bills on the week they fall into, so I make sure I pay them on time and also ensure I have the money in my account. What I mean is, if a bill falls on the 10th, but I get paid on the 4th and the 11th, then I need to make sure that bill gets paid with the check from the 4th. I cannot wait until the 11th to get that checks money deposited because then it will be late.

The last place holder that I put into the chart is the weekly spending for future weeks. At this point I have an idea of how much I spend each week, but in the beginning, I set an amount in order to try and conform my spending around that; and it worked! I gave myself $100 per week, which was outside of bills, but did include expenses such as groceries, gasoline and entertainment. The reason this is important to put into the chart is so that the future balance of your checking or savings account will be as close to accurate as possible.

Now that the chart is created and the formulas are all accurately tallying up my weekly spending with the weekly paycheck and that is all transferring to the next week correctly etc etc.

By doing these things, it helped Marzz and I start to pay down our credit card debts and plan for vacations and weekend trips etc. By placing the amount needed for travel expenses on whatever week those expenses need to be booked, that helps us plan and ensure we have those funds at the needed time. Again, this is all pretty basic but I'm sharing because even though it seems obvious, it certainly was not something we practiced for such a long time and now that we have, it has really changed our lives.

The first real payoff (pun intended) from using this finance chart was our trip to Walt Disney World in November of 2017 with my folks. We saved and saved and saved some more in order to pay for the flight on time, the hotel fees that were due when we booked and the remaining hotel fees due upon check-in. Then there was the Disney Dining Plan which we needed to pay for and also have a budget for other food, souvenirs and anything else that might have come up.

Since then, we use it for planning everything from a night out to dinner and a movie. A weekned trip locally, going down to Disneyland or a larger trip out of town where we may need to book a hotel, flight or other reservations.

I encourage everyone to do this or something like this in order to track your spending habits and help save for travel or other larger expenses. Even for those who do well with their finances, there may be opportunity to improve.