Starting Over, Again…

If you read my last post, you’ll know that things are changing pretty significantly around here. One of the biggest changes is also the one I’m worried about the most. That is the fact that I’m handling my own finances again… Yes, yes, for the last 11 yrs or so, I’ve deferred to Mrs. SSC as the CFO (Chief Financial Officer) of our household. Okay, she actually took control and I more than happily threw it to her, once she saw what a mess my finances were in. 

Back then, I had about $16k in credit card debt, $64k in student loans, and no assets minus a Ford explorer with over 100k miles on it and some random guns. I was crushing it at life! I was more than happy to let someone else deal with finances. Back then I didn’t care about finances. Clearly… Here’s what has changed since then and why going forward I’m hoping to do a LOT better. 

 

Worst PF Blogger Ever…

First of all, I have to start to practice what I’ve been preaching. While “we” have been tracking our spending for years, in truth, I tracked nothing. I’m just the face/voice of the blog since I’m more social and outgoing than Mrs. SSC. I feel like I’ve said this the whole time, but to reiterate, I did nothing but contribute cash to this whole FFLC (Fully Funded Lifestyle Change) concept. Ok, I contributed more than money, but not much more. For instance, last week I found out our 6 and 8 yo already have a $9k “car savings” account… yep… I’m so in touch with our savings, lol. This sort of stealth saving is what got us positioned so nicely to let me quit work back in 2018. 

What this didn’t do was build good spending habits these last 11 yrs. We defaulted to “allowances” early on as a way to separate discretionary funds and staple funds and a great way to avoid arguments. By using “allowances” I didn’t have to justify spending $200 at the Homebrew store, it just came from my allowance. The general rule was, “if it only benefits you, use the allowance”. However, later on it morphed into clothes, any restaurant, and loads of other things but the idea was solid.

That helped me then, but I still over spent my allowance fairly often and even this last year I think it ran chronically overspent. Oopsies! 

So broke… And sad about the Saints…

Beyond sticking to that and entrusting Mrs. SSC with all of our money, I didn’t do much else. Now I have to find a good tracking program for me, or maybe just pen and paper, and implement it.

I Still Have an Allowance?

So, should I use that allowance system and just give myself X amt of money to “frivolously waste” or rather use as “discretionary funds” each month or should I just track my spending well? 

But… so what if I track spending if I’m still spending a lot on discretionary items and not reigning in my spending? I need to figure out not just a tracking system, but also a spending-limiting system for myself too. Lol But seriously… I love spending money. I’m kinda worried about it, to be honest. 

I’ve never found a tracking or spend limiting system that worked well for me, BUT I also haven’t tried to implement one since I gave a crap about my money. Funny how that works. Maybe the allowance might work ok in the beginning, but I think I just need to figure out Jay’s new money system. And then write abook about it and title it, “I Can Money Good Now and You Can Too!” or some other half legible title.

Author photo inside the jacket to avoid liturgical repercussions. lol

 

Spending Mindset

I recently read about kakeibo, pronounced”kah-keh-boh”, that is a Japanese spending Mindset that is similar to our version of “is this a want or a need?” While using that mantra helped break our wanton spending and my constant drive to “stimulate the economy” it might not be enough for me solo. This is where I think kakeibo may help me more than our old mantra.

It starts by asking more than just, “is this a want or need” it goes beyond and dives deep into the “why” and emotions behind the purchase. For me, this strikes the nail on the head. I realized way back, that I had an Amazon problem and online shopping was another way to feel a “little rush” and get some “retail therapy” without using drugs. I’d buy things and feel that little rush but when it showed up I was like, meh, and tossed things aside. I didn’t want the thing, I wanted that rush from buying it. Not. Good… Not good at all…

How much of a buying rush will this stack of $1’s get me?!

So how does the kakeibo method differ? Well it starts with recording purchases on pen and paper, something a friend already teases me about using for grocery lists. Similar to bullet journaling, you keep a written ledger of your purchases. In fact, kakeibo translated means “household financial ledger”, and is just that. A simple written ledger of purchases coupled with questions that help you understand your relationship with money, not just track it.

 

The Kakeibo Concept

It’s a pretty simple concept, where before you make a purchase, you ask yourself these questions. See? Similar to our “want vs need” question. It seems like a lot of questions, but remembering them is easy. Especially the ones you connect with easily, which for me is #2, #5, #6, and #7. 

  1. Can I live without this item?
  2. Based on my financial situation, can I afford it?
  3. Will I actually use it?
  4. Do I have the space for it?
  5. How did I come across it in the first place? (Did I see it in a magazine? Did I come across it after wandering into a gift shop out of boredom?)
  6. What is my emotional state in general today? (Calm? Stressed? Celebratory? Feeling bad about myself?)
  7. How do I feel about buying it? (Happy? Excited? Indifferent? And how long will this feeling last?)

Whoa!! For me, these questions hit spot on and I connected with them immediately. Especially, the last 3 questions. 

5. How did I come across this item, meaning to me, is this an impulse buy or is this a researched buy? 

6. What is my emotional state today, meaning to me, when I get bored, depressed, sad, lonely, anxious, I look to spending as a way to get a boost, rush, and just plain feel better, even if for a moment. Which is not healthy, so if I monitor my mood, maybe I can cut that out. If changing my internet shopping habits showed me anything, it’s that this will be difficult. Yikes!

7. How do I feel about buying it, meaning to me, is this just a quick rush to alleviate my current mood? Do I really, really, want this (i.e. a planer, jointer, or lathe) or is this just a passing fancy that won’t last long?

To me these were the best questions from the lot. The rest I already ask myself, although question #2, can I afford this? and question #4, do I have the space for it? are front and foremost these days, lol. 

By figuring out my feelings associated with frivolous purchases, I think it will help me figure out how to develop good money habits than my current ones. It’ll be quite a journey and I know I’ll struggle and fail. I’ll definitely fail at times. But, thankfully, you’re here to keep me accountable and I’ll keep writing about it because, well that’s just what I do. 🤣

 

Then and Now

The biggest difference between Old Jay and, um, Jay, is that I have years of reading and writing about various personal finance topics like spending, spending tracking, saving (not gonna happen) and more. So the knowledge is there, and more discipline is there than existed when I last ran my own finances.

Money in, money out!! Let’s try and avoid this mindset…

My priorities are different as well. Back then, I didn’t have kids, I didn’t have savings (well, maybe $1-2k), and my goal was to be financially comfortable, meaning hit a point where I don’t worry about money and spending. Now, my priorities are not eating into my savings, checking expense costs on my investments, and figuring out an income stream to create with part of those investments. 

Maybe it won’t be as scary or as difficult as I think it could be. I also know me and know how easy it is for me to overspend, buy needless things, and not be disciplined financially. Like I said, we’ll see how it goes and you’ll have a front row seat. 

 

Summary

What things are you trying this year that you haven’t thought about in a while? Anything big like relearning how to “finance?” Maybe I should title my book, “I learned to Adult at 42, and You Can Too!”