Well, shucky darn, now you’ve done it. You’ve really messed up this time. You knew that managing your finances well was important, and yet you still threw your hands up in the air like a tight-butted rodeo cowboy and yelled YOLO. When the dust settled, your bank account was sadder than a kid who’d gotten a lump of coal for Christmas.
That, my friends, is what’s been running through my own head these past two weeks. You heard right; I messed up, big time.
My first reaction was to tuck tail and hide in shame under my desk (and hence the lack of blog posts). After all, I’m a financial blogger, right? Shouldn’t I have my money shit together and speak to thee like some wizard from on high while stroking my beard thoughtfully? (fun fact: if I don’t wax my mustache off every month, I will look like a dude guy.)
Nay. I’m still human. My unevenly-distributed freckles will attest to that.
I suspect you’ve been here a time or two, dear reader. And while I would have continued to run around panicking like a chicken with my head cut off before, I’m a grown-ass adult now. I’ve got a plan for getting back on track. Here’s what I’m gonna do.
Here’s how we got in this mess.
Since we just moved across the country to our new apartment, there was a ton of shit we knew we needed to buy. But of course it got out of control.
It started innocently enough. We needed a couch since we sawed our old one in half. (True story; it didn’t fit out of the door anymore. Why, I have no idea. Probably because of aliens.) So, when I snagged a sweet couch on OfferUp for just $100, I was ecstatic.
But from there, it took off like a monster. Bookcases (we couldn’t bring those either). Headboards. A new pantry cupboard. Dog beds. Dressers. A new vacuum cleaner. Something-something-computery-something to replace something that’d broken in Zach’s computer during the move.
I knew we’d have to buy some things when we got here. But somewhere along the way, I started to get a whiff of that stanky smell in the air when you know you’ve been overspending. That’s when the spending hangover started.
Step One: Take Stock of the Mess
I’m normally really good about keeping on top of my budget. But since I’d been so busy unpacking (partially due to an unfinished apartment that I was co-opted into remodelling), I’d let it slide.
By the time I finally sat down to balance the budget and enter in all of my purchases, I was cringing in fear. It was just like when I was a little kid visiting the dentist office all over again (only this time without the promise of laughing gas). I knew something bad was about to happen.
I knew I needed to take this step, though. You can’t fix something if you don’t know what’s broke or how broke it is.
When I tallied up the wreckage, I’d spent over $2,000 in Amazon purchases. $2,000! I’ll say it again: $2,000! WTF?! I really had gone off the rails.
Besides almost breaking the FedEx delivery man (true fact; he told us he’d been to our new apartment several times and was wearing a back brace from all the deliveries), that was $2,000 less that we could put towards our debt. $2,000 that could have gone to our house down payment fund. $2,000 worth of beer.
Hell, $2,000 worth of tacos.
Maybe you haven’t made a mistake that bad. Or maybe you have. Either way, the only way to move past this point is to figure out how far off track you’ve gotten, so you know how far back you have to go.
Step Two: Set Up a Parley With Your Significant Other
Continuing the ship analogy, it’s important to get any other people you’re living with on board with the situation. Chances are they contributed to the mess too and are just as responsible for it as you are (*cough* ZACH *cough*).
Now’s a good time to revisit your financial goals. Remind them: yeah, we still want to buy a house someday. We still want to get our asses outta debt like two hotcakes. This current spending pattern won’t support that, and so we need to make a decision.
Should we stop spending so much, or should we still keep buying the shit we want?
Here’s where me and Zach decided to cut back our spending. I sat him down and laid all the cards on the table.
“We’ve still got plenty of money in our GTFOCO Fund,” I told him. “We can still buy the other things we want, like a small patio set and some kick-ass plants. I had my eye on some big-ass blue hydrangeas.”
“But, we were planning on using that money to also pay off the loan we took out for your coding bootcamp. As it stands now, we don’t have enough money left to do that because we have all the combined willpower of a cooked potato with bacon.”
“So, now we have a choice to make: we can either buy all the fancy shit we want and drain our GTFOCO Fund, or we can stop spending and apply whatever’s left to the debt.”
Even though we both really wanted to spend more on the big-ass blue hydrangeas and the patio set, we decided to hit the brakes instead on our spending.
Step Three: Steer That Ship Back On Course
Yar, mateys. It be time. Ye know yer ship has sailed off course and be headed towards a kraken. Now ye’ve gotta make a plan to get Betty back ta port safely. After all, me heartie, there be ale to drink there.
I’ll stop now (giggles).
Now that everyone’s in agreement on what to do, it’s time to get this puppy back on the right track. You’ll have to decide that that looks like depending on where you want to be and where you’re at now.
Maybe you already had a plan set up before (save X% of money towards retirement, budget $X per month, etc…) and all you need to do is get back to that place after dealing with your debt and/or depleted savings accounts.
For us, we decided to stop spending and implement a weird plan to pay off that nagging coding bootcamp debt. Here’s the master plan we hatched:
- Apply the rest of the GTFOCO Fund to the debt (remaining balance: ~$2,500)
- Take $1,000 out of our Oh Shit Fund and pay towards debt (remaining balance: ~$1,500)
- Reassess each month if we have excess cash to pay off debt or if we want to take more money out of the Oh Shit Fund.
The reason we did it like this is because we wanted to pay down the balance of the loan fast so we wouldn’t accrue as much interest. The whole reason we took out the loan in the first place was to get a $400 pay-in-full discount off tuition. We’d already paid $80 in interest — far more than we’d planned since we thought we would be paying the loan off soon. Pretty soon, our interest payment would outstrip the savings from paying in full.
Is it convoluted and weird? Yes. But is it also what me and Zach decided, as a married couple, to do together to manage our finances in the best way we saw fit? Yes. And if you don’t like it you can do suck on a popsicle until you get a brain freeze. (Feel free to use that line for anyone else who wants to criticize your own reasoned approach to managing your money.)
Step Four: Make a Plan to Rock It Next Time
Ah, now it’s time for my favorite phase — the analysis. Now’s when we’ll look at this shitshow as a learning opportunity on how to do better next time.
Take a few minutes to figure out what went wrong and how you can prepare better next time you’re in this spot.
For us, it centered on a few things:
- Being in a new situation where we gave ourselves permission to spend a lot
- Being really excited about spending and fancying up our new place
- Not having a defined pot o’ cash for that spending in our budget
- Having a wishy-washy plan about using our GTFOCO Fund to pay off our debt
Even though it sucks now, we did learn a lot from this shitty experience.
For example, we want to buy a house in the future. You can bet your sweet patoot that this’ll be another tempting excuse to spend lots of money on fancying up a new place.
Nope. Not gonna happen. When it comes time to buy a house, we’ll be prepared. We’re going to set aside a separate fund for furniture, upgrades, paint, and the like. None of this “oh-we’ll-buy-a-few-things-and-pay-off-debt-with-the-leftovers” shenanigans.
No spending hangover for you, future house!
How do you handle spending hangovers? What do you do to get back on track? Leave a comment below!
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