Taking Control of My Finances: A Personal Journey
A Wake-Up Call
During the 2016 holiday season, I faced a harsh reality: I wasn’t saving as much as I could be. My boyfriend and I had just moved in together, and we relied heavily on credit cards to cover our initial expenses. This financial strain led me to re-evaluate my spending habits and prioritize saving.
Learning the Hard Way
After the holidays, I got serious about saving more than just a few dollars here and there. Shortly after, my boyfriend was injured in a car accident and was out of work for two months. If we had saved our money properly, this wouldn’t have been an issue financially. However, we struggled to make ends meet for those two months. This experience taught us the importance of having personal savings.
Getting Started
To turn things around, I took the following steps:
Assessing My Spending
I began by tracking my expenses over a three-month period. I was honest with myself about my unnecessary spending habits, such as frequent Target runs, dining out, and online shopping. I identified areas where I could cut back and made adjustments, like leaving my credit cards at home unless I really needed something.
Creating a Budget
I used the 50-30-20 rule to divide my paycheck: 50% for fixed expenses, 30% for “fun money,” and 20% for savings. This rule helped me reign in my spending and prioritize my financial goals.
Opening Online Savings Accounts
I opened four online savings accounts with CapitalOne 360, each with a specific purpose: a house fund, an emergency fund, a car insurance fund, and a wedding fund. Having separate accounts made it easier to save and justified my frugal living. Plus, online savings accounts typically have better interest rates than traditional banks.
Enlisting Support
Saving money is easier with support. I shared my goals and strategies with friends and family, which helped me stay motivated. Having a supportive network also encouraged me to use my savings for fun activities, rather than frivolous spending.
Overcoming Challenges
My journey wasn’t without its obstacles. I originally aimed to save 20% of my post-tax income, but life got in the way. Despite falling short of my goal, I learned valuable lessons about taking control of my finances, appreciating what I have, and being grateful for the means to save.
The Payoff
Since December 2016, I’ve saved $5,000. While it wasn’t easy, getting my finances in order has been a huge step towards planning my future and becoming more fiscally responsible. I’ve learned to shop my own closet, use all my beauty products until they’re empty, and cook at home more often. Most importantly, I’ve learned to appreciate the value of saving and the freedom it brings.
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