At a standstill with what to spend on

iVillage Member
Registered: 05-09-2002
At a standstill with what to spend on
8
Fri, 01-06-2006 - 12:08pm

Ususally at the end of two weeks, I am with nothing and scraping change for gas and food. I make about what I need to to pay bills but nothing else and they slip behind when I need to use money for an unexpected expense and it takes months to catch back up. I have no savings, no retirement aside from very little in an old 401 k. I am 29, single.

I am very thankful that I received my first bonus ever this year at work. I was able to pay for new tires that my car really needed (thank gooddness), pay for my dogs vet bill and actually have a cushion in the checking account. I hope it lasts. My spending habits are good now - I eat simply, I live simply and I have no new debt and no credit cards. I am just paying for old mistakes.

I am at a standstill though. From years of panic of not ever having money. I am used to planning where I drive to save gas, not buying fancy products, wearing the same clothes from years ago. Now the bills are actually paid this month and I still have $500 in checking. That NEVER happens. But now I am at a loss - I feel like I cannot part with any of it. I should go to my friends baby shower but it will be a plane ticket. I should open a savings. I should pay off the rest of my Express credit card ($40) from years ago! It used to be up to $950 but its in credit couseling with about 4 others. Hopefully all being paid down well and credit going up. I should snowflake. I usually think "I have no extra" but I have wanted to. I feel a relief that I have never felt like this. Boyfriend has noticed I seem happy, more relaxed, easy going. But I think I am desperate to keep this feeling and therefore I cannot part with it and that is stressing me. I know $500 doesn't sound like a lot, but it is so much to me right now. Am I crazy for now having a different kind of stress?

iVillage Member
Registered: 03-07-2005
Fri, 01-06-2006 - 12:17pm

Boyfriend has noticed I seem happy, more relaxed, easy going. But I think I am desperate to keep this feeling and therefore I cannot part with it and that is stressing me. I know $500 doesn't sound like a lot, but it is so much to me right now. Am I crazy for now having a different kind of stress?

$500 is alot--it's the difference in having "a little extra in case" and not having anything. I'm sorta in the same boat. We have some extra $$ this month that I should march down to the bank and open a savings account to start our EF. I think I will. Although I think there is something wrong w/ my car :(, wouldn't ya just know it? If you feel better having the $$ then save the $$. You will probably need it at some point. Keep your budget as is if it's working for you and save your $500 and maybe add to it as much as possible. Problem solved ;)!! Oh, skip the airline ticket, send your regards and save your $$. Friends understand.

iVillage Member
Registered: 06-23-2005
Fri, 01-06-2006 - 12:25pm
Congratulations on getting by with that much less! You mentioned opening a savings account, which I think is a great idea. You would not really be "letting go" of the money, but it might be less accessible to you. Think of it as putting it in a safe place for a rainy day. Believe me- we have built our savings up to just under $1,000 and I love, love, love knowing that money is there for emergencies. It gives me the greatest satisfaction. Even when checking might get low, I don't panic b/c I know I have a backup. (Paying off the $40 credit card might not be a bad thing either, but I don't anything about paying old debts that may be in collections.)
Avatar for endomagazine
iVillage Member
Registered: 11-09-2004
Fri, 01-06-2006 - 12:37pm

Hello,

It's nice to have a cushion, isn't it? Before my husband was laid off in September, we always had a cushion of $400 in the checking account that didn't get spent. I eventually transferred it to a savings account. I set up overdraft protection on my checking account, which is free with my credit union bank. If I happen to overdraft, (which is rare, but did happen once), I'm not charged a fee. Instead, the extra money needed to pay the balance is taken from my savings. I've only had this happen once in the last few years, but it was nice to avoid that $30 overdraft fee!

I would suggest setting it aside in a savings account as an emergency fund. If your car breaks, your computer dies, or your roof needs to be replaced (*all three happened to me in Oct last year) you'll have that extra little bit available for those *oh my bleeping goodness* unexpected bills.

I can transfer funds online instantly, or by phone, if I need the money in my checking account, but having it in savings means I don't spend it without consciously making that transfer request. It's a small added psychological barrier that keeps me from spending it on something silly.

Since my husband's layoff, our cushion has been much smaller, however I look forward to the day when our checking account balance doesn't dip below $400 again. =)

Sincerely,
Lindsey Schocke

Got Dot? Why Not? It Pays!
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Sincerely,
Lindsey Schocke

Geeks on Tap: Mission Accomplished

iVillage Member
Registered: 05-09-2002
Fri, 01-06-2006 - 1:53pm
Thanks everyone for the replies. I think I'm just afraid I'll fall off the wagon of being on the right path financially. I think "wow, here's my chance" to not be behind all the time. My parents have been in debt forever and I haven't seen the other side of it ever. We'll see. Hopefully its a jumpstart to success. I'm moving out of my own apartment to share one with a girl I met and save $500 a month that way too. This will be next month. I don't want to live with someone, but I don't want to be in debt and that one wins out. And maybe I will opt out of the shower afterall. The ticket is $143 but even that makes me cringe. :)
iVillage Member
Registered: 08-24-2004
Fri, 01-06-2006 - 4:03pm

As far as the shower, you can put a little more money in the gift if you don't go. An acquaintence of mine said what she really appreciated was savings bonds, and money for the child's education fund. It might be a nice (and unique) gift to send like a 50.00 bill and an application for a Coverdell Education savings account. It's cheaper than the airline fare, and it's not a gift that she might not need. Or, you could save all the money and see her later, once the baby's arrived. At the shower, she might not have a lot of time to spend with you, so you could maximize your visit by doing it later.

I vote for putting the money in an emergency fund. Maybe even at a separate bank so you can get to it, but it's not too close to the general funds.

iVillage Member
Registered: 03-27-2003
Fri, 01-06-2006 - 9:36pm

Congratulations!!!! And I *completely* understand the feeling you're having. It's so normal to have that feeling of strangeness and out-of-placeness when you've changed your status quo.

I vote with the others for an emergency fund. A $500 cushion will feel so good, and keep you from debting in case of emergencies. I would also consider leaving $100 of it in your checking account, but not touching it. This is a nice cushion to have in case of an accidental overdraft (happens to all of us from time to time when we miscalculate).

In the future, when you have a decision like this to make over "excess" funds, you might consider splitting the funds. Some people split it in thirds--one third to savings, one third to debt, and one third to spend on fun stuff (or gifts, or whatever). We generally split it in at least three (uneven) parts--10% to charity, 10% to either savings or debt, and 80% to whatever our current short-term goal is (whether it's a vacation, new floors, or whatever). It helps to have things prioritized, so you don't just blow it because it's there. We like to have a list of various items we want money for, and then we write numbers (1, 2, 3, etc.) beside each goal according to how important it is to us. That way, when we have extra money, we know which thing or things to apply that money to. When we have a large goal mixed in with several small goals, we might put a percentage of the extra money toward the large goal, and then knock out two or more small goals with the remainder.

Congratulations and good luck! You're doing great. It might help too to read something like Dave Ramsey or Mary Hunt or Suze Orman to get a greater sense of direction for your finances.

Blessings,

Heather

iVillage Member
Registered: 01-06-2006
Fri, 01-06-2006 - 10:02pm
I would agree with everyone else and keep the $500 for now as an just in case fund. Linking to checking for overdraft protection is a great idea as well. You say your job pays just about enough to pay the bills. What about overtime, is that ever an option. I worked my butt off last year working about 60 hrs a week avg. with highest week 85 hrs and lowest weeks 40 hours worked +8hrs holiday pay, so even when we were off for a holiday I was working extra hours the days we did work. It was tough at times but I made an extra $15K last year and was finally able to start an automatic savings plan so we had a cushion when money was tight. We still have debt and not much to show for all the hard work, but fee like we are making headway. I have $50 a month taken from my checking put into ingdirect.com account two times a month. This generally gets depleted every quarter when auto insurance is due, but I no longer have to skip electric and phone bills to pay car insurance and no longer get behind on those bills due to not having extra to plan ahead for insurance.

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iVillage Member
Registered: 05-09-2002
Mon, 01-09-2006 - 9:35am
Thanks again for all the great suggestions. I had a bit of a breakdown this week - "do I pay $3.99 for a direct movie? I could invest/save that". Since I never had enough before, I would just spend it if I had it. So now I was just really overwhelemed with decisions about little things I don't normally think about. I still am, but feeling better. I already have a budget per day, so I just need to keep with it. I used $150 of the cushion to to set up a savings account linked to my checking so I feel better that I can get it if needed and $50 per check is automatically going in there. I called every creditor and although I still owe alot, its $1000 less than I though for loans and credit cards. I snowflaked $20 for the first time!! And I wrote a plan in my journal. When I move to the less expensive place, $100 goes for misc., $400 to savings and $200 to pay down even more debt. I hope it is something that works. My car loan is still at $15k (yikes!) but I thought it was at $18k so at least that is better. THANK YOU, THANK YOU. You guys are my sanity. I will read those books.