I'm Paying Overdraft Fees... What?

October 22, 2009

That was the last time I over drafted on my account.

$225

That's what I paid in fees alone.

11,125,569,789,156,151

That's the number of tears shed over the whole ordeal.

1

That's the number of seconds it took for me to decide that I'd never go through that again.


So, here we are, how ever many months later and here I am in utter shock. I'm overdrawn.

Granted, it's only $21.08 but that's still crazy! What's crazier is that I know how it happened. It's all my fault.

Here I am spouting off how good I feel to be debt free, how light my shoulders feel, how awesome it is to wake up not owing one cent to a single soul all the while I've spent more than I possess. There was more than enough money in there but I made two fatal mistakes.

1. I didn't track a single purchase over the last two weeks
2. I splurged on non-essentials.

There is a purchase for $3.48 (I don't even know what this is). Another for $1.58 (Huh?). And the $50 "cooking class" at Williams-Sonoma that ended up being a "live-tutorial" with a "culinary expert".

What I'm feeling now is shame. For years, I've scrimped and not even saved just lived paycheck to paycheck. And the first time I have money left over, I lose my effing mind and spend more than I've got.

I thought I was ready to be debt free. But now? I'm not so sure.

New Year - Better Money

Alright, I had a minor set back in December because I splurged on Christmas presents. Not that I broke the bank or used a credit card (<-- ack!) but I did blow out my savings to splurge on the children but that's what Christmas is about when you're four years old.

So, as of yesterday evening, my savings was down to $7.03. It's kind of embarrassing to see that in writing but that's what it was and shame gets you nowhere.

Today, however, is payday. And with some serious adjustments to my pretax allocations, I was able to net more. Plus, there was a nice surprise in the form of a raise!! Prayers do work.

I made some New Year's Resolutions for my finances and they are as such:

1. Put 10% of my paycheck into savings
2. Don't touch my savings
3. Put 5% of my paycheck into an emergency fund
4. Don't touch my emergency fund
5. Change my mind about my money
6. Pay my bills first

These things don't seem hard and Number 6 has the audacity to seem obvious but the reality is that this will be a challenge for me. I spent my whole life watching my parents mismanage their money. When I was finally out on my own, I mismanaged my money. Now that I'm debt free, I'm afraid that I'm going to continue mismanaging my money.

I have a dangerous tendency to buy things that I want before I consider my needs. Or to push impending due dates for bills out of my mind because "I have time before I have to pay that". I know that I need to change this thinking. I also admit to having a serious issue with having extra money. Whenever I have extra money, I feel like I need to be "doing something" with it. Gym memberships, books, take-out and cinema are the biggest culprits. But I'm vowing to change my way of thinking. I know it will take a lot of discipline to learn to just leave it alone and let it work for me.

Finally, I'm going to start contributing to my savings. I always have contributed in the past but as soon as I got myself into trouble with spending, I'd dip right in there and take those babies back out. No more! I decided that since I can't keep my hands to myself then I would need another individual to do it for me. So I opened an account at a separate bank and am having my 10% direct deposited into a savings account there. This account has no ATM  / Debit card connected to it, there are only 4 branches and I'd have to drive 8 miles to get to the closest one. Basically, I tapped into my laziness and am making it work for me instead of against me.

The last thing I'm doing is starting an emergency fund. I think 5% is pretty reasonable considering I'm single with no children and my brother-in-law is my mechanic. There's not much that could go wrong that my emergency fund couldn't handle at 5% and if I get into serious trouble, I'd have to go to my savings. But at least there's a Plan B & Plan C in place. No more crying and flying by the seat of my pants. It feels strange to take hold of my finances this way but I'm excited to see what it will net.

I'm sure that I could save more and do more to achieve my 1.8 Million dollar goal but we all have to start somewhere. And I figure if I could spend all of 2010 putting out $300 to $600 a month to creditors then I can pay myself a measly $250, right?