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?

Parting Is Such Sweet Sorrow

Yesterday, I wrote and mailed a check for $980.67. I've been saving for 6 weeks to be able to write this check. It is the last check that I will have to write to a creditor (my car not withstanding) and I am relieved.

I'm temporarily broke but relieved just the same.

Here's a toast to financial freedom!

May I continue to keep my discipline and put my money to great use.

Money Fail

I need to balance my check book. That should tell you everything you need to know right now.

Settlements

I received a settlement offer from the last credit card company I owe money to. They are willing to take 40% off what they claim is my final balance. It's not that I don't have the money; it's that I don't want to give it to them.

There was a time when I was sending them $220 a month and it still wasn't enough to clear my balance. They've never been willing to negotiate with me in the past so (and I'm not saying that this is the right thing to do but) I stopped paying. I will find a way to get them their money if only so that I can get this yoke from around my neck.

And I promise you and myself too, I will never abuse another credit card. In the end it's not worth it. Because when I write them this check I will be sending them one-half of my vacation fund. *shaking my head* So not worth it.

ING Yourself Today

I got a letter from the Social Security office the other day. And basically what it said was that they will run out of money a good TWENTY YEARS before I retire! Now, if I hadn't already turned my crazy spending habits around, this would have definitely been enough motivation.

Now, to be completely honest, this is seemingly a very modest estimate. I told it how old I am, what I make now, that I won't retire until I'm 70 (!), and that I want to live on less than what I'm making right now. And they still managed to come up with almost TWO MILLION DOLLARS!

I'm going to be honest with you. I hate the stock market. I don't like the idea of risking my money to the whims of a failed key stroke (looking at you Stock Guy who "accidentally" keyed Billion instead of Million). But with inflation, I'll never be able to put this kind of money ($3580.61 per month) away unless I get in there soon.

So, my advice to you: ING yourself. Do it today. The sooner you start saving, the better off you'll be. And the less likely it is that you'll have to rely on your children to support you financially.

Budget Says What?

Today, I got the best quote via Twitter,

"Budgeting is telling every dollar where to go! Give every dollar a job and make them perform".

If, like me, you decided to never be broke again, then this message speaks to you. I suck at budgets. Not because I can't do it because I totally can. It's just because I'm too lazy to sit down and actually hash one out. If I managed to hash one out, I'd be able to stick to it; I'm nothing if not a rule follower.

So, here's a promise to myself. I will sit down and create a budget before November 1, 2010.

Once I have the budget I'll be even more capable of handling my money (and the overflow!).

Wish me luck!