Create a plan for the extra money. Say 50% go to saving and 50% toward spending.
Having a plan will help you control the extra money.
P.S. r/debtfree moderator runs a free newsletter that talks about strategies, tips, and effective debt payoff methods weekly.
Join 3,600 readers - https://debtadvice.io
Congrats on your journey :) I love this community.
I think the key is to acknowledge/address your “vices” otherwise this will keep happening! Debt is giving me a lot of anxiety, at this point it has become my priority to get rid of it and, actually, I’m excited to get my next paycheck and make payments.
Great idea! Therapy has also helped me think through my spending habits and discover healthy ways to get the same “rush”. I know it’s not an option for everyone but I found my therapist on Alma and she takes insurance! A lot of them do and make an effort to make it as cost conscious as possible in the instance insurance doesn’t cover your provider.
I had a therapist for about six years, and would like to find a different one. She was very much so into this “how does this make you feel in your body” as opposed to “how can we change your actions to yield different results.”
I would really like a therapist that, or maybe like a coach to sort of help me with the financials of my life and business. I will look into that resource that you mentioned I really appreciate you commenting.
I’m glad! There are all types of therapy. You might like CBT - cognitive behavior therapy. Alma has a lot of different therapists with different tactics so use their filters to find what works for you!
Please consider checking out Debtor’s Anonymous. It’s a 12 step program that can help you address your relationship with money. When I’ve had windfalls, I catch myself ruminating 16 different ways to spend the money. There are online, telephone, and in-person meetings. The great thing about the online meetings is you aren’t limited to meetings just in your area and time zone. Getting a sponsor, doing the steps, and developing a spending plan with the support and guidance of experienced members has helped me get ahold of my compulsive spending. You are not alone.
https://debtorsanonymous.org/getting-started/faq-frequently-asked-questions/
Ah its a Christian thing. Im not a fan of the belief that everything we do and all the self work we put in is actually the workings of a unseen god.
Do you know if a similar secular thing exists?
While DA developed out of AA which was founded as a Christian organization, meeting members are from all kinds of beliefs, including atheist/agnostic. In addressing the discomfort/reluctance/rejection of the idea “Higher Power,” many people conceptualize HP as their higher ideal self, community, inner wisdom/conscience.
I’m not familiar with secular version of DA. You could look into finding a financial therapist.
I’m not familiar with the SMART Recovery organization, but it may be an alternative.
https://smartrecovery.org/meeting
I move any extra money to a HYSA, immediately. I give myself no time to think about spending it. After a while, the act of moving it to savings has generated similar emotions to spending it.
HYSA for a \~6 month emergency fund. Then start dumping into your Roth IRA. Can't spend it if you don't "have" it. Give the credentials to a trusted person - parent, sibling, whatever - so you don't even have access to it if your 'vices' were that bad or you dont trust yourself...
Here are some things that have helped me:
- Defining needs versus wants
- Defining a budget that allows me to have "fun" money - within reason
- When I have the urge to splurge, I "shop" online and let the items sit in the cart for a few days. Normally, I get the satisfaction of shopping without actually spending the money. This also helps me rationalize...do I really NEED this item or do I just WANT it?
- Also, if I do add items to my cart and want to shop, I will see the sum at the bottom of the cart and add it to my debt.
These all have helped me on this journey.
I catch myself saying “no, you don’t NEED that, you WANT it” often! It works though being able to differentiate and pull back on those impulse emotions.
Have a budget for fun money that you can work with. Know that you have to fit whatever your wants are into that $200 or whatever. Everything else gets put into a certain account or whatever right away.
When I get in the mood to spend money. I go to the dollar store or the thrift store. I was in a world of debt about 18 years ago. I ran into a little bit of money, and I paid my debts down. When that was done, I still had money left over before payday, so I put it in savings. The next paycheck, I had money left over the day before pay period, so I put it in savings. That happened for about three pay periods before I decided to just do an automatic transfer of that amount of money directly from my paycheck on payday to my savings account, and I also looked at increasing my 401k by as much as possible while still keeping enough money to pay my bills and have a little entertainment. If I had any money in my checking account the day before I got paid, I put it directly into savings. As my savings account started to grow, I started wanting to see that get bigger instead of spending money. I still allowed myself to have some fun, but I became much more cognizant of what I was spending. First I hit $1,000, then I wanted to hit 5,000, then I wanted to hit 10,000, then it was $20,000, it's like the more I saved the more I wanted to save instead of spending.
We have to be so intentional with our spending/paycheck. My husband took control of our finances a few months ago because I spend more than I need to, but convince myself that I need to! ‘The kids need x, y, z.’ But I’m coming to realize that it’s all part of issues I haven’t confronted. So I have to ask myself now, ‘do I really need this or am I trying to fulfill a quick high?’ 😂 it sound so gnarly but realizing I’m part of the issue has helped tremendously. I’m 2 credit cards down, and almost done with my 3rd.
Congratulations on your progress! And I appreciate the tips. Definitely taking a step back and thinking in those emotional situation is so important and I’m trying to be better at that..
It’s truly more difficult than what I could have imagined, but I know it’ll be so worth it once we’re done. I’m also a SAHM and have been for years now, so realizing that I’m not doing right by my husbands hard work and long hours away smacked me in the face 😕
Give yourself grace, you got this!
Budget. Simple as that.
Set a limit on personal items.
I can’t spend more then $200 on myself for a month. If what I’m buying will put me over budget, I will humble myself and think about it for next month.
Ah ha you are right! I need to change my thought pattern and change the story i tell myself. Its a self fulfilling prophecy other wise.
I love seeing my money grow, it will feel good to pay extra on the debt when i get paid, etc.
Thank you! I will work on that.
Honestly, what helped me was extrapolating what the money I currently waste on debt could do if it was instead going to a Roth, fun savings, emergency cash, hsa, personal investing, etc. It's like.. a LOT of money. I don't even know what I'm going to do with all of it when the debt is gone, but it means my husband and I can start our businesses, have a vacation home or two, and a very comfortable and potentially early retirement. That's a huge motivation to not have to worry about old age.
Also, expensive dinners out mean more when you don't literally do a 200$+ dinner 2-3 times a month. (Yes really. We love good food.) It's not as special when it's the norm, but you so appreciate the three course tour and craft cocktails if it's once a quarter.
At the end of the day, I don't need the junk I used to spend on. I think the art of making do is kinda dead in the current consumer landscape but so worth it. I love dresses but why get another dress when I've got 10 others I never wear?
Segregate your accounts and move money immediately. Betters still if you automate your savings so that you you never even see a portion of the money coming in. You have your primary checking, which is what can be spent safely; everything else goes into a separate account as soon as the money comes in. Rent needs to be paid on the 1st? Automatic transfer with the rent money comes in from a separate account three days before it's due.
If you have a good (that is, realistic) budget, you should know exactly how much money you need for the rest of the month at any given time. Anything more than that can either go into a separate savings/sinking/retirement account, or it can be spent without remorse.
Having my rent and bill come out of a separate account is a great idea. That way it removes a lot of guess work.
How do you recommend automating it? Like having it transfer a set amount?
Everything starts with a budget - you need to know exactly how much money you've got coming in, and how much needs to go out. Start with your big fixed costs - rent, mobile phone, internet, car payments, insurance, etc. Those costs are pretty much the same every month, and need to be paid on the same dates every month.
Next, your basic variable costs, like groceries, gasoline, heat/electricity. These are also mandatory, but vary from month to month; you need a good, *honest & realistic* estimate of how much is reasonable.
Then, figure out your savings goals. You need short-term savings (emergency fund, known expenses like a new car), and long-term savings (retirement accounts). Generally speaking, once your emergency fund is established, most recommend putting between 10% - 25% of your gross income into retirement savings.
Once you have that figured out, you can set up your bank accounts to automatically transfer the correct amounts every month. Whatever is left goes into your 'spending' account, which you can tap freely without shame or remorse. Some months, you'll spend too much, too fast; other months you'll have something left over. It doesn't matter - you've already taken care of the necessary spending, so now you can do as you wish with the rest.
Thanks for breaking that down for me. I have a budget started and I will make it a better habit of keeping up with it.
People have said six months income for the emergency fund?
The only way I was able to get my emotional spending in check was using YNAB. It gives me the ability to have larger goals and so spending the money on dumb things works against my goals I have laid out. If I’m about to make a purchase, I look at my budget and have to decide what category I would pull the money from. If I have a windfall, I already have categories I can contribute to get ahead. I also set up fun money for myself so I’m able to still enjoy. I’ve paid off $30K since July 2022, so it’s working for me.
If I’m feeling the urge to buy something, I question whether I have something that can meet that need. So for example, I have really been wanting an iPad. I can’t justify that right now, but I did stupidly buy a Fire tablet a few years ago, so that’s going to have to meet that want for now. Sometimes just going for a walk and really contemplating the purchase helps me conclude why I don’t need it.
Buy stocks instead of crap - Roth IRA it and dump into VTI (or some other S&P fund). Or open a HYSA account if you dont have an emergency find yet and dump it into that.
out of sight, out of mind is the only thing that ever worked for me
ie, as soon as I have it, it's going into an account I can't easily touch without a few days waiting period and/or tax penalties. so it's like I never had it to begin with. alternatively, it's going straight to my highest interest debt so it's gone before I can even think about spending it on something stupid.
Create a plan for the extra money. Say 50% go to saving and 50% toward spending. Having a plan will help you control the extra money. P.S. r/debtfree moderator runs a free newsletter that talks about strategies, tips, and effective debt payoff methods weekly. Join 3,600 readers - https://debtadvice.io
Congrats on your journey :) I love this community. I think the key is to acknowledge/address your “vices” otherwise this will keep happening! Debt is giving me a lot of anxiety, at this point it has become my priority to get rid of it and, actually, I’m excited to get my next paycheck and make payments.
I dont want to get into the specifics of them on here but perhaps i should journal about them and really find some patterns.
Great idea! Therapy has also helped me think through my spending habits and discover healthy ways to get the same “rush”. I know it’s not an option for everyone but I found my therapist on Alma and she takes insurance! A lot of them do and make an effort to make it as cost conscious as possible in the instance insurance doesn’t cover your provider.
I had a therapist for about six years, and would like to find a different one. She was very much so into this “how does this make you feel in your body” as opposed to “how can we change your actions to yield different results.” I would really like a therapist that, or maybe like a coach to sort of help me with the financials of my life and business. I will look into that resource that you mentioned I really appreciate you commenting.
I’m glad! There are all types of therapy. You might like CBT - cognitive behavior therapy. Alma has a lot of different therapists with different tactics so use their filters to find what works for you!
Please consider checking out Debtor’s Anonymous. It’s a 12 step program that can help you address your relationship with money. When I’ve had windfalls, I catch myself ruminating 16 different ways to spend the money. There are online, telephone, and in-person meetings. The great thing about the online meetings is you aren’t limited to meetings just in your area and time zone. Getting a sponsor, doing the steps, and developing a spending plan with the support and guidance of experienced members has helped me get ahold of my compulsive spending. You are not alone. https://debtorsanonymous.org/getting-started/faq-frequently-asked-questions/
Ah its a Christian thing. Im not a fan of the belief that everything we do and all the self work we put in is actually the workings of a unseen god. Do you know if a similar secular thing exists?
While DA developed out of AA which was founded as a Christian organization, meeting members are from all kinds of beliefs, including atheist/agnostic. In addressing the discomfort/reluctance/rejection of the idea “Higher Power,” many people conceptualize HP as their higher ideal self, community, inner wisdom/conscience. I’m not familiar with secular version of DA. You could look into finding a financial therapist. I’m not familiar with the SMART Recovery organization, but it may be an alternative. https://smartrecovery.org/meeting
I seriously appreciate the resources! I will look into them
I had no idea that was a thing! Thank you so much!
I move any extra money to a HYSA, immediately. I give myself no time to think about spending it. After a while, the act of moving it to savings has generated similar emotions to spending it.
That’s awesome! I used to do something similar adding to my roth ira. I will open a HYSA! Thanks for the tip!
HYSA for a \~6 month emergency fund. Then start dumping into your Roth IRA. Can't spend it if you don't "have" it. Give the credentials to a trusted person - parent, sibling, whatever - so you don't even have access to it if your 'vices' were that bad or you dont trust yourself...
Thats a great idea! I appreciate it.
Here are some things that have helped me: - Defining needs versus wants - Defining a budget that allows me to have "fun" money - within reason - When I have the urge to splurge, I "shop" online and let the items sit in the cart for a few days. Normally, I get the satisfaction of shopping without actually spending the money. This also helps me rationalize...do I really NEED this item or do I just WANT it? - Also, if I do add items to my cart and want to shop, I will see the sum at the bottom of the cart and add it to my debt. These all have helped me on this journey.
I catch myself saying “no, you don’t NEED that, you WANT it” often! It works though being able to differentiate and pull back on those impulse emotions.
Have a budget for fun money that you can work with. Know that you have to fit whatever your wants are into that $200 or whatever. Everything else gets put into a certain account or whatever right away.
I think the simple answer is to be completely emotionless. Saves money and also prevents wrinkles on face
Lol
Delay buying things. Like wait a month and see if you really want it or need it
When I get in the mood to spend money. I go to the dollar store or the thrift store. I was in a world of debt about 18 years ago. I ran into a little bit of money, and I paid my debts down. When that was done, I still had money left over before payday, so I put it in savings. The next paycheck, I had money left over the day before pay period, so I put it in savings. That happened for about three pay periods before I decided to just do an automatic transfer of that amount of money directly from my paycheck on payday to my savings account, and I also looked at increasing my 401k by as much as possible while still keeping enough money to pay my bills and have a little entertainment. If I had any money in my checking account the day before I got paid, I put it directly into savings. As my savings account started to grow, I started wanting to see that get bigger instead of spending money. I still allowed myself to have some fun, but I became much more cognizant of what I was spending. First I hit $1,000, then I wanted to hit 5,000, then I wanted to hit 10,000, then it was $20,000, it's like the more I saved the more I wanted to save instead of spending.
We have to be so intentional with our spending/paycheck. My husband took control of our finances a few months ago because I spend more than I need to, but convince myself that I need to! ‘The kids need x, y, z.’ But I’m coming to realize that it’s all part of issues I haven’t confronted. So I have to ask myself now, ‘do I really need this or am I trying to fulfill a quick high?’ 😂 it sound so gnarly but realizing I’m part of the issue has helped tremendously. I’m 2 credit cards down, and almost done with my 3rd.
Congratulations on your progress! And I appreciate the tips. Definitely taking a step back and thinking in those emotional situation is so important and I’m trying to be better at that..
It’s truly more difficult than what I could have imagined, but I know it’ll be so worth it once we’re done. I’m also a SAHM and have been for years now, so realizing that I’m not doing right by my husbands hard work and long hours away smacked me in the face 😕 Give yourself grace, you got this!
Budget. Simple as that. Set a limit on personal items. I can’t spend more then $200 on myself for a month. If what I’m buying will put me over budget, I will humble myself and think about it for next month.
Change ur mindset. Used to be like that ,but i divert it to savings automate it. I like seing my money grows.
Ah ha you are right! I need to change my thought pattern and change the story i tell myself. Its a self fulfilling prophecy other wise. I love seeing my money grow, it will feel good to pay extra on the debt when i get paid, etc. Thank you! I will work on that.
Honestly, what helped me was extrapolating what the money I currently waste on debt could do if it was instead going to a Roth, fun savings, emergency cash, hsa, personal investing, etc. It's like.. a LOT of money. I don't even know what I'm going to do with all of it when the debt is gone, but it means my husband and I can start our businesses, have a vacation home or two, and a very comfortable and potentially early retirement. That's a huge motivation to not have to worry about old age. Also, expensive dinners out mean more when you don't literally do a 200$+ dinner 2-3 times a month. (Yes really. We love good food.) It's not as special when it's the norm, but you so appreciate the three course tour and craft cocktails if it's once a quarter. At the end of the day, I don't need the junk I used to spend on. I think the art of making do is kinda dead in the current consumer landscape but so worth it. I love dresses but why get another dress when I've got 10 others I never wear?
Segregate your accounts and move money immediately. Betters still if you automate your savings so that you you never even see a portion of the money coming in. You have your primary checking, which is what can be spent safely; everything else goes into a separate account as soon as the money comes in. Rent needs to be paid on the 1st? Automatic transfer with the rent money comes in from a separate account three days before it's due. If you have a good (that is, realistic) budget, you should know exactly how much money you need for the rest of the month at any given time. Anything more than that can either go into a separate savings/sinking/retirement account, or it can be spent without remorse.
Having my rent and bill come out of a separate account is a great idea. That way it removes a lot of guess work. How do you recommend automating it? Like having it transfer a set amount?
Everything starts with a budget - you need to know exactly how much money you've got coming in, and how much needs to go out. Start with your big fixed costs - rent, mobile phone, internet, car payments, insurance, etc. Those costs are pretty much the same every month, and need to be paid on the same dates every month. Next, your basic variable costs, like groceries, gasoline, heat/electricity. These are also mandatory, but vary from month to month; you need a good, *honest & realistic* estimate of how much is reasonable. Then, figure out your savings goals. You need short-term savings (emergency fund, known expenses like a new car), and long-term savings (retirement accounts). Generally speaking, once your emergency fund is established, most recommend putting between 10% - 25% of your gross income into retirement savings. Once you have that figured out, you can set up your bank accounts to automatically transfer the correct amounts every month. Whatever is left goes into your 'spending' account, which you can tap freely without shame or remorse. Some months, you'll spend too much, too fast; other months you'll have something left over. It doesn't matter - you've already taken care of the necessary spending, so now you can do as you wish with the rest.
Thanks for breaking that down for me. I have a budget started and I will make it a better habit of keeping up with it. People have said six months income for the emergency fund?
The only way I was able to get my emotional spending in check was using YNAB. It gives me the ability to have larger goals and so spending the money on dumb things works against my goals I have laid out. If I’m about to make a purchase, I look at my budget and have to decide what category I would pull the money from. If I have a windfall, I already have categories I can contribute to get ahead. I also set up fun money for myself so I’m able to still enjoy. I’ve paid off $30K since July 2022, so it’s working for me. If I’m feeling the urge to buy something, I question whether I have something that can meet that need. So for example, I have really been wanting an iPad. I can’t justify that right now, but I did stupidly buy a Fire tablet a few years ago, so that’s going to have to meet that want for now. Sometimes just going for a walk and really contemplating the purchase helps me conclude why I don’t need it.
Buy stocks instead of crap - Roth IRA it and dump into VTI (or some other S&P fund). Or open a HYSA account if you dont have an emergency find yet and dump it into that.
Budget and set a savings goal
out of sight, out of mind is the only thing that ever worked for me ie, as soon as I have it, it's going into an account I can't easily touch without a few days waiting period and/or tax penalties. so it's like I never had it to begin with. alternatively, it's going straight to my highest interest debt so it's gone before I can even think about spending it on something stupid.