It was hard to believe that anything less than total deprivation would lead to any meaningful sort of savings. As evidenced by my last blog (adorable vacation wear), I obviously did not deprive myself. I bought some great clothes, Valentines Day gifts for the significant other, and we went out to eat a few times. But I made some big and little changes: No more eating lunch out, no wine or dessert when we were out, and I questioned carefully every clothing purchase.
I discovered that saving on this level ended up with more of this effect:
It is hard to quantify this in a blog where I don't want to disclose my (a) income, or (b) savings. But imagine a healthy income--and imagine that I previously had been saving about 15% of it per month. Now I'm saving about 40%.
I looked at this money saved in one month and had a huge wave of relief wash over me. I can live the way that I wanted to live when I set out to get a doctorate. I can travel, I can shop, I can eventually own a new car and a new home, and I can do it all without going into huge amounts of debt. It is a very liberating feeling, and it all started with depriving Starbucks of a few of my hard-earned dollars each month.
The best thing about this is that I knew it all along but needed to experience it. Every financial magazine in the world tells you some version of this (in a nutshell: Quit pissing away your money on food and entertainment). But previously I've been hanging out in the Contemplation stage of change.
(For those not familiar--Prochaska & Diclemente developed a model of change in which after studying how it was that persons with addiction gave up their habits--it goes like this:)
Precontemplation(Not yet acknowledging that there is a problem behavior)
Contemplation (Acknowledging that there is a problem but not yet ready change)
Preparation (Getting ready to change)
Action (Changing behavior)
Maintenance (Maintaining the behavior change) and
Relapse (Returning to older behaviors and abandoning the new changes)
Here's hoping for NO RELAPSE!
Nice job!
ReplyDeleteI'd be interested in your system. Do you have separate accounts, automatic transfers, the envelope system, cans buried in the backyard? It seems like the more we cut back, the more we come up short at the end of the month.
ReplyDeleteMy system isn't very sophisticated, I'm afraid. I keep everything in one account until the end of the month, at which point I transfer whatever remains into savings and start "fresh" (I'm paid only 1x/monthly). Keeping each paycheck in checking works best from me in terms of monitoring overall spending. All bills come out of that account; I don't auto-deduct anything. I keep one credit card primarily for travel and I never leave a balance on it. (For the record: My consultant recommended the envelope system for better budgeting but I feel like I'm not going to need it; things seem to be going okay--I also feel like I need to have a disclaimer: Super low living expenses and having no dependents makes this an "easier" process than many of my peers)!
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