Small changes make big differences

I was driving recently when Alter Bridge’s “Ghost of Days Gone By” came on the radio. I adore this song. The more I hear it, the more I like it. It’s such a great song that I forget it’s really by Creed minus Scott Stapp. In other words, Creed sucks but when the singer is replaced and the band is given a new name, it magically makes all the difference and it becomes something awesome. Which got me thinking.

Finances kind of work the same way. You can plod along, doing what you normally do, and no matter what it’s just not working. Your budget fails every month. Your debt repayment plan gets derailed. You’re constantly behind on bills. You’re slashing expenses but other expenses keep rising. You start to fall into a self-loathing, self-pitying stream of self-beratement until you collapse on the floor in a messy drunk heap (or was that just me?). Then, one day,  you make a small change and instantly everything clicks.

I’ve actually experienced this type of change twice. The first was finally getting on a budget. Finally getting all my expenses written down and figuring out where my money was going each month made managing my money a whole lot easier. I was no longer frustrated by questions like “how am I going to afford this” and “good Lord, is this bill really due again” and “where the f*ck is all my damn money?” I had an idea of where my money was going, how I was going to afford everything and even attempt to plan for things in advance. One thing that I did during this time was withdraw $500 every payday (my bank’s daily withdrawal limit) and fit all my two-weeks expenses (minus bills) in that pot of money. Unfortunately, after weekend #1, there was only enough money for gas and the next week’s groceries left and I would have to use my debit card to fill in the gaps. It was frustrating for two reasons 1) I hate balancing my checkbook which I would have to do each time I used the debit card and 2) I couldn’t understand why I was running out of money. After all, my expenses were budgeting and planned. Right?

Turns out, not so much. I never bothered to do an itemized calculation of what I was spending each month on things like toiletries, household expenses, clothes, pet expenses…all of those little expenses that would just seem to crop up unexpectedly even though I knew that I needed to pay for them. The other mistake? Was letting my bank’s limit dictate how much money I had in my budget. I realized that I needed more (sometimes, way more) than $500 every two weeks especially when gas was teetering on $4/gallon. Once I realized this, I was astonished with my own stupidity that I hadn’t thought about this before. That was when I called our first family budget meeting (this meeting involved only my husband and I as our daughter is 4 1/2 and the dogs lost their ability to have input after they ate my underwear). I printed out Dave Ramsey’s budget forms and together we went line by line, discussing and deciding how much we do spend, should be spending and should be saving. We arrived a total amount for each category that we need to budget monthly. And instead of taking out the $500 and making it work, I write a check and one of us cashes the check, giving us exact amount of money that we need for those 2 weeks. If there’s money left over, it rolls over into the next pay period/month (like rollover minutes but with money instead. Brilliant, right?).

The second small change has made the most significant impact on my budgeting. I now only have to balance my checkbook once a week, or sometimes only on payday, and now there’s always have enough cash for expenses each pay period rather than a cash/debit combination. It has been such a relief to start making my bank work within my constraints rather than the other way around. It was such a small change that I can’t believe I didn’t think to make it sooner.

Kind of like Creed didn’t think to replace Scott Stapp sooner. That guy is a douche.

What small changes have you made that have had a significant impact?