I do something that I think a lot of us tend to do. I tend to focus on the negatives rather than the positives. It doesn’t matter what it is. More often than not, I will discuss why something about me or a situation or a meal is bad rather than discussing what was done. I do this most often with anything about me personally (intelligence, appearance, parenting skills, etc) but I also do it a lot with my finances.
For so long, I had no money. I was drowning in debt and all of my paychecks went to pay someone else. Stuck in dark black hole, I never thought it possible to claw my way to the top and eventually climb out. Even now that I have no credit card debt and am much more financially secure than I was 5 years ago, I still feel like I’m doing something wrong. I still look at my financial picture and see something bleak. It’s like having body dysmorphic disorder only with my finances instead.
I wish I could stop thinking that my financial picture is dismal. Because I know it’s not. It’s just that for so long, everything I did was wrong, it’s hard to flip the mental script. So I’ve decided to try something. I’ve mentioned before that I was in a sorority. When we were voting on girls during rush, we used a “pro, con, con, pro” system. Essentially, we had to start and end on with a positive adjective with the negatives sandwiched in between. I’m not sure where this logic came from, but it’s nice to start and end a conversation on a positive note. It would also force us to realize that no matter what, there’s always something good or nice to say about another person.
I figured I could try this system with my finances. I’d list a pro, con, con, pro with a little bit of explanation for each.
Pro: I am two months away from being nonmortgage debt free! After approximately 5 years of paying down debt, I’m almost done. Honda, you can kiss my ass! If I never see a credit card statement again, I’m fine with that. Financing anything? No, thank you! I just keep singing George Michael’s “Freedom” in my head. Or maybe I’m more like Pinocchio now that my debt strings have been cut. Whatever it is, it feels terrific!
Con: I’m not saving enough for retirement, my daughter’s college or general savings. As I am in my mid-30s, I am significantly behind in my retirement savings and have a lot of ground to make up if I ever want to retire. For college savings, there is some money but not enough to even cover one semester of books in 13 years when she starts college, never mind tuition. And the husband and I seriously need to ramp up our general savings for things like new cars when ours eventually stop working, travel, home repair or new home purchase, emergency pet expenses or any other major expense. These deficiencies could plunge us back into debt.
Con: My husband’s student loans. Since he, like so many others, had to pay for college and graduate school by himself, his loans are quite high (in the $40K range). The goal is to pay these off before our daughter starts college. It’s possible, maybe, with a lot of hard work and dedication. But I’m exhausted from the last five years. And I have a great deal of resentment towards this particular payment because I know the circumstances behind its existence. It’s difficult keeping up the dedication towards paying off a debt that is not technically mine. I
Pro: I am a good financial role model for my child. By gaining the knowledge through my get out of debt experience, I developed a much stronger grip on personal finance. I have better, healthier habits. I understand fundamentals like how to create a budget, live within my means, set up savings goals and use my money practically instead of frivolously. I have a rudimentary understanding of complicated subjects like investing and insurance. I understand how to use credit intelligently. Most importantly, money is not a secret or taboo subject; I talk to her openly about our finances. And by doing this, I’ve broken the debt cycle in my family.
Having written it out like that, I feel better and more confident about my finances. I know where my weaknesses are just as I now know my strengths. I think now I understand why my sorority made us vote like that.
What does your pro, con, con, pro look like?
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[…] The pros and cons of my finances by Daily Money Shot […]
It is a great idea to look at what you are doing and point out what you are doing right.
Congrats on being two months away that is really exciting news! It is a a great feeling.
I feel the same way about being behind in retirement savings. I feel like I am still playing catch up even after we paid off our debt.
Niki recently posted…Joining the 30k Challenge
First, you are debt free – you’re already saving more than many in interest and fees. Congrats on that! Second, you say you haven’t saved enough – you have some form of savings plan in place. That’s still more than near half of all Americans although they realize it is needed since 2009. Congrats on that!
Now, you seem to be beating yourself up on that you didn’t meet your own savings goals. Have you tried using the 3:3:4 budget ratio? Here’s an explanation as I see it. It’s a fancy name for a simple division of resources. Stick to it and you will have not only enough to live off of, but also a little bit saved up and something to splurge on.
The first aspect of this money management system is that there are prerequisite facts already taken care of. This means the utilities are paid, the food is bought and the rent is sent out. The ratio deals with the money left over after paying for the absolute necessary items.
The breakdown of the ratio goes like this: 30 percent of the available money goes to the bank; 30 percent of the spending money goes to an investment or savings; the remaining 40 percent goes to something fun for you, your family or the house. You must allow the 40 percent for fun to counter-balance the other 60 percent being put aside for later and/or emergencies. If there is no reward for doing a task, the task becomes a burden and the meaning is lost.
Bill Swan recently posted…On Financial Responsibility and Monetary Priorities
It’s amazing what writing out the pros and cons can do. It gives perspective and really helps to minimize the situational chaos we make for ourselves. I think you’re doing fantastically. The biggest thing is that you aren’t continuing to stay ignorant about your finances, your being a great example for your daughter and you aren’t taking on more debt. That’s a HUGE accomplishment.
Keep up the good work! 🙂
Carrie – Careful Cents recently posted…2011 Year in Review: Ups, Downs and Everything in Between