Spending Patience on Saving

It has been several years on our financial journey since we really took initiative and strove for a better financial situation. Let me make this very clear, this journey has not been easy nor has it been a straight path. I think it is safe to say our original goal is still in place and acts like our mission statement: Get out and stay of debt, built a savings for the future and have liquid cash for a comfortable day-to-day living.

For those who may be unfamiliar with the journey I'm referring to, let me provide a brief recap. Beginning around 2016/2017, Marzz and I found ourselves struggling each and every week to pay our bills, buy groceries and gas and then have money to put towards the next week to do it all again. We were using credit cards to stay afloat and often hocking things on eBay to keep our heads above water. The positives were that we were both working consistently and had a place to live and a car, but if just felt like the walls were closing in on us and at any minute they could squish us.

I wish I could pin point the specific moment or reason that kicked us into gear, but all I know is that I knew we could not sustain this and racking up credit card debt was not the answer. My first step was to get a base line and figure out where the hell our money was going each week. This started with me creating an Excel spreadsheet, first on Google Docs and later on Microsoft OneDrive; this was we could access this sheet anywhere, any time.

The Excel sheet, or as I call it, our finance chart, is a basic concept and essentially a digital check book with one difference and this difference is what I believe was the key to making this work for us; that difference was the ability to see into the future! (gasp)

The sheet simply show each week and the formula was money in, money out with the ability to itemize each item so we could see what was spent and what came in. Once the debt and income were done, the Excel formula then calculated what next week would look like and the next week and the next as far as I could build out the document. We started with a weekly spending allowance of $100.00 USD and I entered that for all weeks, current and future. This acted like a place holder and allowed us to see into the future. The idea was, our debts like credit card bills, rent, utilities and car payment were not going to change dates, and although some would change rates over time, I thought if we kept them constant for our chart, that could only help us. So I entered all of our known debts for the weeks they would land on. On that note, a week for our chart begins on our payday. Once that was put in, I entered my paycheck for each week which at the time was pretty consistent, I had set hours and rarely worked any overtime when we started this chart.

Once all of the data was entered, that is when the simultaneous horror and magic happened. Seeing all of your spending staring back at you is sobering. For starters, we knew we had some bad spending habits but we had no idea the impacts they had on us in the big picture. Scrolling down the chart, into the future, I could see we were in the red many weeks and I could also see that it was inevitable that we needed to use our credit cards to continue on this way; which was just not going to work, especially since we had some cards approaching their limits.

Our first step was to identify those bad spending habits such as eating out, buying coffee or snacks at work or buying non-essential items on Amazon. We gave ourselves short-term goals like going the work week without spending and we were pretty good at that so after a couple weeks, we expanded to the full calendar week. There were a few slip ups during all of this, but overall we did much better for a few months and I could see the results on our chart. Now as I scrolled into the future there was much less red (negative numbers). I would say we continued this for about 6-8 months and that got us on track, and now I could scroll through for months and not see any red. This meant it was now time to start cutting down our debt.

If you research online or ask around, you will probably hear 2 or 3 methods that people do to eliminate their credit card debt. One is attacking the highest interest cards first. Another is attacking the lowest overall balance first and lastly you could spread it around and pay a little more on all of them at once. We chose the second method because much like when you're trying to lose weight, you want to see the results because that works as fuel for motivation and helps keep you going. So even though the first option is a good one in terms of not paying "extra" in interest and attacking more of the principal balance, option two allowed us to see the fruits of our labor and actually pay off a card sooner.

I should note, Marzz was not completely on board with this finance chart thing from the beginning, it took a bit of convincing and some hard learned lessons for her to finally come around and ask for me to create a chart for her. I don't say this to call her out, but I understand this is not always something people want or are equipped to do. It can give you anxiety, stress, or just plain be confusing for you and all of those things are OK to feel; but I write this in hopes it can help you if you experience those things. Marzz of course did come around a few months later.

That's another thing, we keep our finances separate. Her money earned is her money and same for mine. We obviously have shared expenses which we just transfer each other the funds via Apple Pay or Chase.

So we each started to pay more on our lowest overall balance credit card. It began small, for example, lets say our minimum monthly payment was $25.00, we might pay $35.00 or $40.00 total. We continued to do similar payments until the card was completely paid off and then we moved on to the next lowest overall total balance card.

Of course this is all easier said than done, and this is nothing novel or new advice. I refer back to my previous statement that by creating our finance chart AND allowing us to see the potential "pay off" was encouraging for us. Again, I'm sure most of us have tried to lose weight at some point in our lives. Imagine if you could look at a calendar and see which weeks you would lose "x" amount of weight all the way to your end weight goal? That would be pretty amazing and offer a great deal of encouragement and peace of mind; which is exactly what our chart did for us.

I paid off my first card in February of 2019, followed by my next two cards in October 2019. Then quickly two more cards in February of 2020 and my fifth in June 2020. My last credit card was paid off in September 2020 and to boot I also paid off my car early in October of 2020 as well. Marzz has done a fantastic job also and she too as paid off all of her credit cards.

I'm very happy and proud of the work we did to accomplish all of this seemingly impossible task. I share this with all of you in hopes that it can inspire some of you, provide some hope and possibly give you an answer to your financial troubles.

I just want to touch on one more thing pertaining to the finance chart; something that I have written about before, but I feel it is important enough to bring up again. In addition to seeing into the future for how much money I might have at a given point in time, it helps for planning trips. If I know I'm traveling a certain week, I just add the total amount that I think I will spend for that trip. Once it's placed into the chart, the formula's calculate instantly and I will know whether or not I will have enough, perhaps I'm OK that week of travel, but the following week I'm in the negative. Depending on how far out this planned trip is, this will either give me time to save up more in between now and then in hopes I can change that negative into a positive. Or it could mean that I cannot afford that trip at that given time or price point. Either way, it is such a great planning tool and I've used it from the get go. People will often comment and ask us how we're able to afford to travel when we're claiming to be saving money?

My answer is always the same: we're doing both!

In my opinion, saving money does not mean you're not allowed to spend any money. I know most will grant things that you need to live (rent, groceries, car, gas etc) but I also think entertainment and leisure activities fall under necessary needs as well. So for me, spending money going out to a fun dinner, or going to the movies or traveling all fall under entertainment and I think help provide a sense of balance for us mentally. So that's my justification, and by adding it to the chart, if the chart says we can do it, then it's a done deal! It really is as simple as that for us and we do constantly think about travel so it is not uncommon for me to place a trip in our chart and then either move or delete later just because we're in a constant state of flux with our schedules, planning with other peoples schedules as well as new needs or wants come up with will affect our budgets.

Looking back, I wish I had done this much sooner but it is what it is and I cannot change the past, but we continue to take control of our future and maintain our credit card free lives! I review this chart often, sometimes daily (maybe too often). We try and make it a point to touch base each week and we both go over and update our charts with things like our paychecks and just update what was spent for the last week. By doing this, it ensures we stay on track and continue our success.

Our next goal is to pay off Marzz's car, continue to pay down my student loan debts, although this is going to be more of a long-term goal since some of the balances are quite high, and because we're in a lot more control of our finances, we're not as concerned about these balances.

I know this blog was a bit of a regurgitation of previous blogs about our finances, but I think the reason why I want to continue bringing it up is that I do talk with so many people on a regular basis who seem to struggle with their finances and I hope that perhaps this can help those people get out of the rut they're in. I don't consider myself a financial expert, this blog is just my opinion and should not be taken as legal advise. However, I am hopeful it can be a useful tool for someone out there struggling with their finances. I also wanted to share the timeline so that you understand that this was not quick nor easy and it took use a while. I've noticed it's easy for people, especially in our instant gratification world we live in, for people to only see the end result. People look at someone's job or income or maybe their muscles or whatever it is and they want what that person has, and there's a weird assumption that you can just have that and skip all of hard work and time and effort that the person you're admiring did. I'm hear to remind you that you cannot skip the hardships, no one is going to do this for you. You and you alone are in control of your life, in this case your financial choices. Be smart about your choices and know there can be heavy consequences for poor choices. I know I made many and literally paid the price for a long time. Fast forward now, and all of those past woes are behind me, hopefully forever, so although my effort is different now, it still exists and I still need to stay dillegent everyday to maintain what I've created. You can do the same, you can become debt free!