My new years resolution was to live within my means.
IT SOUNDS SO LAME. Even just writing it feels lame.
Why such a sensible, boring resolution you might ask? Well, last year my new years resolution was to say YES and try more new things. I had an amazing, whirlwind of a year, but what it meant was that I also had a very expensive year.
I travelled to America, went to Future Music Festival in Sydney, Melbourne Cup in Melbourne… Couple that with relocating cities and three months of unemployment and you have Jes with a nice wee collection of debt.
So when I was reflecting over New Years, I decided that this year should be a year of me being a little bit sensible, and getting my finances in order. I hate being in debt, and knew that my 2014 was unsustainable. Time to be a little bit grown up for a while.
Don’t get me wrong, I’m not living like a nun or anything! But I think it’s important to, every now and then, take stock and make sure things are under control. In today’s society there are so many temptations and so many expectations that it’s easy to let spending get out of control. These days us young professionals are living all ‘YOLO’ and getting larger mortgages than we can afford, ticking up thousands of dollars worth of credit card debt, taking out personal loans to go on holidays…
Reading up on the topic I found this article, which shared some pretty scary statistics. More than three quarters of renters between 18 and 24 spend more than they earn each month, with over 20% spending more than $100 over their monthly income. Many of us won’t ever pay off our credit card debt, taking it to our graves… That’s not a good sign for the financial health of our generation.
So, I thought I’d try and be a bit proactive and kick the debt before it gets really out of control.
We all know New Year’s resolutions are notoriously hard to keep, so I took some tangible steps to ensure I kept to it:
– I made my boyfriend make me a budget.
No, seriously. My boyfriend’s background is in finance, and he is really anal, so I enlisted his help (use the resources you have available, baby!). I’ve made elaborate spreadsheets before then never looked at them again, so I was determined to make one that I was going to be able to actually stick to. He helped me allocate out all my expenses, and (here’s the key) allocate realistic spending money. You can’t just go cold turkey and cut out all play money, that’s a sure fire way of setting yourself up to fail. I like shopping, I like eating out, so it was important that I felt like I could still do these things, within reason.
– I made sure I could easily track my progress.
I am such a competitive freak sometimes, and I am most competitive against myself. So giving myself an easy way to track my progress was going to be the key to keeping this resolution. My bank has amazing internet banking software that let’s you set up your budget and code all of your transactions against it, then automatically plots in on a cute looking graph to show where you have gone over and come under. Do you know how satisfying it is to look at the end of the week and see that you’ve come in under on your food or shopping budget?! Really satisfying, btw, really satisfying.
(And if I come in under my budget it means I get to treat myself with an extra coffee or meal out, a new item of clothing, or putting more towards my debt repayments. I am very motivated by treats.. Haha)
Because it’s now April (HOW is it almost half way through the year already?!) I can happily report that I am still sticking to my resolution and my budget, give or take (hey, no one can be perfect all the time), and am on track to having my debt paid off in a couple of months. And while still managing to have fun along the way. Success!
Have you stuck to your new year’s resolutions? Are you financially healthy? I’d love to hear your trials and tribulations! 🙂