Don't Debt Today
by Diane Conlinn, August 26, 2004
Not debting today that is (unsecured debt), isn't just a negative thing. I regard it as a positive thing, because I am giving myself the opportunity to live in a positive way, even my monetary habits have a positive twist.
The first things I've learned about staying out of debt is:
1. Recording your expenses. Finding what the real cost of living is. I had absolutely no idea before I started Debtors Anonymous. I had also no thought of recording anything in observant mode rather than evaluation mode. Observing is to write something down and just note it. Evaluation is writing it down and making judgments about it. For me to be able to get through a day without debting, I had to learn to write my numbers down in an Observant not Evaluative way.
When I got into evaluation mode, I started wanting to fudge numbers when I recorded. Or I wanted to stop recording them, figuring what I didn't write down didn't matter. It was only after I started writing numbers down in an observant way that I was able to start getting a real idea of what my expenses are. Just recently, I realized after reviewing the last three months that I am spending $500 a month on food. I had been putting aside $320 for myself. Well, that isn't going to work. Because either I am going to run out of money for food, I am going to take the money from savings, or emergency money, or something else I've allocated it for, OR I am going to debt, borrow to have enough to eat. And that is what happened. I borrowed money so I could eat. NOT a good plan. Okay this is just an example, of something recent for me. But the principle still stands.
Things cost what they cost, and we spend what we do, and only till we write our numbers down in an observing way will we find the truth out. Even if it is the unpalatable truth that we spend $500 a month for food.
2. Keeping a cushion in my spending accounts. One thing I've learned about myself, is that I can depend upon my forgetting something important, and/or I forget to write something down, or there will be a surprise this month. I have found that keeping a $200 minimum in my account works for me. In other words, when I set up my spending for the month, I spend all but the last $200. If go into that money, something is wrong. Back to step 1. Am I recording my expenses objectively, observantly?
3. Plan in the unexpected expenses. There are things that come up every so often, that the rest of the year we zone out because they only happen once , twice, or three times a year. I don't know where I expect the magical money to come from, I just sort of space these things out until they are in my immediate horizon. This goes back to Step 1, recording the expenses again. Each month looking through my numbers for the once in a while expense and dividing that by 12 and adding into my monthly spending plan.
4. Planning ahead. I plan my spending two months ahead every month now. Each payday, I spring ahead to the payday two months from now and do my planning for that month. Then I review my other upcoming information to see if I forgot anything, or one of those sneaky periodic expenses is creeping up on me.
5. Having a contingency fund. Ideally 3 to 6 months of living expenses, depending upon how lucky we think we are going to be looking for a new job, if we lose our job, or some other catastrophe kicks in such as an illness. Or the we have an accident, and have to pay the deductible on our car, etc. I found the contingency fund to be great when I found out I needed 4 new brakes, 4 new tires, and I was able to just transfer the money into my account, and pay for the expenses. I have to tell you it turned a stressful situation into a much less stressful situation.
I'll bet you think I am a really controlled person, who is able to really do things as planned. NOT. Actually, I found that the better I did #1, the easier I found out it was to figure out what I really do spend and what I spend it on. I simply quit trying to make a plan that didn't deal with reality.
This is about living right now, and not in a fantasy plane where I am not going to be anyway. The one where I am self sacrificing diligent, etc. If after I have looked over my expenses, there is something left to give my creditors, then that is great, and they get the money.
But, this is not about my old creditors. This is about future creditors (NOT again). I don't want any ever again.
Thanks for reading me today.