The financial diet

My last post dived into my battle with depression and changes I’ve made from it, including my diet.

While my healthy diet to lose weight was always my plan, my diet actually started as a financial diet. I’ve been wanting to buy a house and a new car for the last few years, but never really put the effort into preparing for it. This was partly due to my depression but it was also because of all the ‘wants’ I wanted. I was living well above my means when it came to luxuries. I was always buying high end stuff, eating fast food daily (if not multiple times a day), spending tons of money on online ordering, subscriptions, and using my credit cards to the fullest extent. Quite frankly I was bleeding money, I’m not going to go into how much I make but I make enough that I should have already accomplished my goals a year or two ago. Although I was spending a lot of money, I was also rebuilding my credit during this time hence the credit cards and because of it my credit went up from the low 300’s to mid 600’s in the last three years. But I still had a spending problem, I’ve lost count of the stuff I bought and sold a few months later just to put a little extra money towards my credit cards. I was in a vicious cycle.

This is where one of the items in my motto comes from. Take back my life! Take back my life, my life was being controller by my wants, it was being controlled by advertising, it was being controlled by tasty goodies from horrible fast food places, even being controlled by my generosity to my friends. Everyone is being pulled in different directions because of the above and many more reasons. Taking back my life to means me taking back control from all those outside forces that influence you, reining everything in and re-evaluating every outside force.

I tried every which way to make a decent budget for myself. Spreedsheets, Mint, Quicken, Microsoft Money (oh how I miss you) and other online/offline applications. It wasn’t till August that when I decided to put real effort into it, that I found one that actually works for me. Pocket Smith. This app is great! I like the data visualization of your spending and the long term forecasts for all your spending. The only downside is it is not free but it has more then payed for itself since I have been using it. After putting all my accounts in and letting it collect transactions for a month, I left it alone. I had already built a simple plan that I needed to put into action before I get to the data in pocket smith.

  • Setup a bill only account
  • Have enough money in that account to pay all bills in full on the first
  • Split my direct deposit between my main account and bill account
  • Start cooking my meals for work and home to eliminate 99% of fast food bill
  • I had a second account already on hand, I’m not sure why I thought I needed two checking accounts a long time ago, but I never closed it but also rarely used it. First order of business was figuring out my real bill spend numbers. I got that figured out and added 20% to the top of it, this was the total bill spend that I needed for my bills with enough to cover some that may fluctuate monthly. I then manged to acquire enough money in the bill pay account so I could pay all my bills on the first. As soon as the first rolled around I changed my direct deposit (I’m payed biweekly) and placed half of the total of all my bills + 20% each pay check. I do not touch this account at all unless it’s to transfer the extra money that builds up over time, I never let this account drop below my bill spend + 20%. I do make minor adjustments bill spend amount as some bills are payed off and adjust my direct deposits to compensate.

    So now all my main utilities and other bills/loans are going to my bill pay account. my other account was being used for what was left. Groceries, online subscriptions, gas, entertainment, other automatic payments, fast food, some of the automatic transactions I completely forgot I had. Which is where Pocket Smith comes in, now that I had a month worth of transactions. I logged in and started categorizing anything that didn’t categorize automatically. What I found made me hang my head in shame. I had subscriptions to online movie services that I only watched on a blue moon, my fast food bill was approaching 900 a month, dozens of movie rentals, free spending on friends and other micro transactions that added up to a lot more then I initially thought. One by one I started evaluating each transaction and making pros and cons about what each one offered me. I cut off all the movie services except for Netflix and my Amazon Prime account, started cooking my own meals and bring lunch to work, set myself an entertainment budget, cut off a lot of business services that I payed for (github premium, some domain name services, etc). I got rid of an extra line on my cell phone and insurance on my devices, cut my TV service since I rarely watched it, cut out smoking and a dozen of other micro transactions and services. The end result was staggering, so much so that I was able to get one of my credit card payed off in two months and the other one will be payed off in March.

    During August to the end of December I focused on nothing by my fiances and cooking my meals, even though I didn’t consider this a real diet I still lost official 24lbs just from cooking myself meals. Now that my financial diet is well into affect, I can focus on my health. Do I still have spending issues? Some, it’s a constant battle and a long term change just like getting healthy you are always going to get knocked down, but what defines us is how fast we get back up. I still watch my finances like a hawk and I can honestly say now that I’m over the initial change hurdles it’s becoming an obsession.

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