The January experiment

It’s taken me longer than I meant to get another post up on the blog– but trust me when I say, this has been one of the busiest months of my life and I expect it to only get worse until the summer.

I conducted a little experiment on my January spending.

I added up all my spending, EXCLUDING necessities like bills, rent and groceries….and then I compared it to the same period last year (i.e. January 2010).

I think the results are pretty shocking:

Last month: $367.83

January 2010: $979.37

I spent MORE than two and a half times as much money in January last year than I did this year.

And I even went on a trip last month and had to spend extra cash on meals, drinks and transport. There was no such excuse last year. I just spent a lot of money. I don’t have the receipts left but it looks like I might have bought a blazer (usually a good purchase!), but I also spent like a drunken sailor on snacks, drinks and meals out (not great at all…).

Another thing I noticed was that there was a huge decrease in the number of transactions on my bank account (way less withdrawals and debits). The best part is that less transactions means more ‘no spend days’!

Maybe I will have to repeat this little experiment again!

 

 

Self-control is better than intelligence, talent and social class put together

Dancing=discipline (Flickr photo by kelsey_lovefusionphoto)

A big part of any frugal lifestyle is self-control. Using a disciplined approach to spending and saving.

The first rule of my financial plan is simply being conscientious about every dollar that I spend (…which is why I’m so choked I had to pay for an expensive cab ride today to get to an interview for a story that completely fell through!).

Self-control can include a lot of things: discipline, patience, perseverance and conscientiousness. I have been striving to develop my own discipline this year. So I was particularly interested to see the results of a New Zealand study on self-control published in the Globe and Mail Tuesday.

From the article by Carly Weeks:

“Children who have the least amount of self-control have been found to be three times more likely to develop multiple health problems, struggle financially or be convicted of a crime.”

These results seem intuitive on a lot of levels. I would say that my MOST successful friends are the ones that are work horses: people who approach their finances, fitness, studies and career with a methodical and disciplined approach.

But discipline is like a muscle– you have to work at it. I know mine is still pretty weak (hence the chocolate bar I ate tonight instead of a proper dinner).

Ordinarily, I don’t like to blame my parents for my own foibles– I am an adult and I believe in taking responsibility for myself. But I definitely wish my parents had encouraged me to be more disciplined when I was growing up.

She’s a tough broad, but I think Tiger Mom was totally onto something!

Growing up, I watched my parents spend freely without much of a budget. They are now facing a retirement without much financial security. I am constantly concerned about their welfare and I hope that I will be successful enough to be able to keep them comfortable.

Still, I am grateful that I had my moment of financial enlightenment early enough that it isn’t too late. My brother is nearing forty and not taking any responsibility for himself and I worry about having to take care of him too.

Getting out of debt will be hard and may take a long time, but I have a lot of years ahead to build my wealth.

For now, DISCIPLINE is my watchword for 2011.

My secret debt

By Halbot K. Browne (Image scan by Philip V. Allingham)

For a long time now I’ve been keeping my debt a secret.

I suspect that this is very common amongst people whose spending habits are out of control. They rack up a lot of debt and they feel ashamed.

To a large extent, I am still very much in the closet of “debt shame”. In my real life, almost none of my close friends and family know the extent of my debt problem.

My parents know that I have student debt. But aside from the $10,000 line of credit from the bank that my dad co-signed for– they do not know the total amount that I have borrowed in student loans.

Which brings me to the other important person in my life: my boyfriend. He has NO IDEA how much money I will owe once I graduate this spring.

The other day we were talking on the phone and the subject of student loans came up. I was expressing some anxiety about the spring when I will graduate and the loans that I have amassed will begin to enter their repayment phase.

BF made a guess at how much my loans totalled…and it fell waaaaaaaay short. He guessed that I had borrowed an average of $7000 per year for four years (enough to cover the last two years of undergrad and two years of my master’s).

He made a guess that my debt is approximately $28 000.

But of course, the REAL total is one and half times that number: approximately $42 000.

And that DOESN’T include the bank line of credit OR the credit card debt OR the personal loan.

I didn’t bother to correct his lowball estimation. Nor did I confirm that his guess was accurate. I think I just changed the subject. He’s no idiot, he knows that I have not been totally transparent about my financial circumstances. But he still doesn’t know the whole truth and that does cause me to worry.

If we stay together I know that I will have to tell him the whole truth. Especially if we move in together (which could happen next Fall). But for the time being, since the problem is entirely my own– my own poor spending habits that will have to be repaid by my own hard work– I don’t feel compelled to tell him the whole story…yet.

Ultimately the worst person to hide your debt from is yourself. And I am not hiding from it anymore.

Remember ‘Street Cents’? Finding good sources of financial news and analysis

Where do you get your financial news?

This week I spent a lot of time thinking about different sources of Canadian financial news. I should probably admit up front that my own history as a consumer of financial news is SKETCHY to say the least.

As a kid, I remember occasionally tuning in to, Street Cents a teen-oriented consumer affairs program on CBC. It was a great program which aimed to educate and entertain kids on topics like consumer products, saving money, youth entrepreneurship etc.

Of course, I didn’t tune in because it was good” for me. I tuned in because I enjoyed segments like ‘fit for the pit’ and ‘what’s your beef?’ because they were interesting and ENTERTAINING.

WHERE is that kind of programming today? Street Cents was cancelled in 2006 amid declining viewership and nothing resembling it has stepped in to fill that void.

But between Street Cents and young adulthood, I don’t remember having much financial consciousness. This is something that I regret and looking back, I really wish my parents had emphasized the importance of financial literacy and disciplined spending.

As I got older (late teens and early 20s) and became interested in politics, I found myself regularly reading the political and financial news magazine The Economist. And I still read it– The Economist is indisputably a tremendous source of international financial/political news and analysis.

But while The Economist nails macro level issues in economics and politics– it doesn’t directly address issues around banking, investing and personal finance.

This past week I had a chance to compare some different Canadian business and financial news sources including:

Welcome to Miss Miser!

This is where I plan to post updates on my journey to get out of serious debt. I am going to use this blog as a place to share my experience as I learn some personal finance lessons and hopefully, tackle down my debt.

I think the reason most people get into serious financial trouble is because they ignore their own situation. I know that I have been. And now in my mid-twenties, I am finally coming around to the realization that you must establish an ACCURATE financial picture before you can know what the next steps are.

This will be the first time that I publicly disclose the full extent of my financial hole. Probably like a lot of people in this situation,  I have a lot of feelings of shame and anxiety about my debt.  But I also like the idea of accountability that sharing my situation with others will provide. This where the anonymity of blogging comes in handy.

To any readers out there: so long as my wallet is open for the world to see, I’ll be blogging under the name Miss Miser.

The Start Line

• Student loans: $42 239.94
• Bank line of credit: $10 866.66
• Personal loan: $4000
• Credit card debt: $790.65

TOTAL DEBT: $57 897.25 CDN

Wow. That’s a lot of money. I hadn’t actually added the credit card balance to the other debt before. It’s shocking. And maybe just the kick in the ass I need!

Periodically, I will provide you with updated balances. I haven’t decided how often yet. This blog, like my financial acumen, is a true work in progress.