Saturday, August 22, 2009

Am I that frugal?

In the past year, I basically cut out shopping, I lowered my energy costs, I started using the library, I began budgeting and I managed to both save a decent amount and annihilate 2/3 of my consumer debt. Unfortunately then I began to get cocky. I figured, "hey I'm frugal now, so I can go ahead and buy that new pair of shoes. After all I know I can afford it"

This line of thinking is hard to stop especially when I get tired of wearing the same clothes every day. In this city, people bu new wardrobes every three months, and as much as I realize that this is insane, I just want new things sometimes. I want to drop $60 on dinner. I want the $200 haircut, I want, I want, I want...

and this is when I realized I'd totally lost my way. This whole time I thought I was motivated by simplifying my life, when really I was in mountains of debt, and I was terrified.

How did I realize this? I didn't accrue more debt or anything like that. All I did was sort my online banking account for the last month.

I should interrupt here by saying that, I find sites like quicken and mint to be incredibly tedious to fill out and use. They definitely offer great services, but for me, they just aren't that appealing. Because of this, I track all of my spending on an excel spreadsheet. I used to think that this was ok until this morning.

Excel is great for seeing where every penny goes and tallying your spending in different areas each month. You can also divide up in different time periods. I've started tracking my weekly spending instead of monthly, and it's amazing how much this helps from week to week. (Also it's fun seeing what I've been up to.)

Anyway, this morning all I did was sort my online banking account by type of expenditure, and my jaw was dangling somewhere around my ankles.

This whole time, I've been thinking I was frugal, but wow. Debit purchases every which way. Tons of cash taken out every week. Wow. Just wow. Some of it was necessary, but a lot of it could have been avoided simply by taking a minute and thinking about it.

Did I really need to go out with friends 5 days in a row?
Did I really need to buy 4 new pairs of shoes?
Did I really need a new dress that was way out of my price range?

Nope.

The thing that makes me sad is that none of these purchases made me happy. I had some good times, but they weren't necessary, and that money could have gone to better use towards saving for big purchases I really needed. Now it's just gone, and it hasn't benefited anyone including myself.

From now on I need to work on opening my eyes and seeing things properly.

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