If you know much about me, you might rightly be wondering, "WTF?" For the record, lightning did not strike me out of the sky when I put my hand on the church doors, and the metal did not burn my hand, hee. It is true that "prayer" is a strong component of the program. Sometimes... I do get a bit um... twitchy... when I have to listen about how everything I have belongs to God and I am just a steward of God's resources. But that is another topic for another day.
I've been hearing about FPU for years, and I was curious enough about it to read the book The Total Money Makeover. At that time it was not for me. Most of it (it seemed) is geared toward couples / families, with a Christian perspective, who make around $40-60K a year, and have a lot of unsecured debt and large payments on things. For a single woman, devoutly non-Christian, who lived on cash mostly and very frugally already, it was not helpful. Well that is all still true, so the adaptation is a real bear, and I am not 100% on how to do some things. But I am trying.
A few weeks ago I was directed to this blog, where a young family paid off over $30,000 in student loan debt in less than 18 months. The wife worked part time, the husband did not have a regular job and was not getting clients, they have a house and a baby. I found it inspiring to read their story, and helpful to see the details of their failures and triumphs. I might not have thousands in car payments and credit card debt, but I do not want to be making minimum payments on my student loans for the rest of my life. I want to pay them off.
So I agreed to check out the first class for free. Anyway that's how I got started. Now after a month... well. There have been successes and failures. Not everything in this program makes sense from a math perspective. It is really more a behavior modification program than anything else.
I have modified some of my behavior. While I was always on a cash basis before (as much as possible), I used my debit card to swipe my purchases. Thus, I removed much of the emotional connection to my money and spending. Now, I physically use cash. It makes a huge difference. Huge.
Now, when payday comes, it is not just numbers on a paper that then become numbers on a website. I take a large chunk of cash out of the bank and I divvy it up into envelopes. When I want to buy something, I gotta get out the envelope and take out the cash. Then later write down what I spent on the tally and subtract. It can really be a PITA. So I don't buy stuff unless I feel like doing all that! It's a small deterrent but in the short term, that's all you need. After a few weeks (21 days to make a habit) your thought process has adjusted.
The other thing this does is make me think in advance about what I am going to buy and how much it is. Because our world makes it somewhat inconvenient to use and carry cash. I can use my debit card at restaurants and coffee shops, and I don't even have to sign a slip any more. I just hand it over. I don't have to look at the receipt, because the charge will appear on my online statement. It's so easy to spend. Companies spend millions of dollars figuring out how to make it easy and painless and convenient.
Right now, I want the inconvenience. I want the "stubling blocks." Because every time I get money or spend it, I want there to be a pause while I re-check my direction and re-orient myself. I no longer want to be $10-ing myself to death at the Walgreens across the street, or $20-ing myself here and there, and then I wonder where all my money went.
Carrie: "What happened to all my money? I know I made some..."
Miranda: “At $400 a pop, how many (pairs of shoes) do you have? Fifty?”
Carrie: “Would it be bad if I did?”
Miranda: “Well $400 times 100, there’s your down payment.”
Carrie: “Well no, that’s only $4000.”
Miranda: “No, that’s $40,000.”
While the whole marriage/church/God thing is not for me, there are so many ideas in this program that I do like, and that I find eye opening when applied to me and my life.
I love the idea that money is energy and that it is constantly moving. It is always in flux. If I buried $10,000 in cash in my yard today, in 10 years that $10,000 won't have the same buying power. Money is always growing or decreasing. It never really stays the same.
I love the idea that I am responsible for directing the flow of energy, for steering the car. That's really what I have never accepted before. I have accepted that I need to generate income, and I need to keep it and spend as little as possible... but only so I have more to spend, or to miser it away in a little room called Savings Account where it sits and bugs me because it's just sitting there. I have never thought about money as an energy flow that moves through me. I like the idea that I need to learn to focus that power, through concentration, through my Will, and direct it to where I want it to go.
I love the idea that I should never have any "lazy money" around. I have always had lazy money. Change tossed on the floor of my car, random bills in pockets, coins in the couch cushions and little bowls on the counter, money in checking, money in savings, money in a credit union, money in an IRA... I like that money never, ever, just "sits there." Even if it is waiting in reserve for something, it has a job to do, and I tell it what it's going to do and I decide when. I know that I am going to get my hair cut and colored every 3 months, and I know this costs $100. So just because I have kept aside $33 this month and $33 next month, doesn't mean that money is randomly sitting around. It has a job to do come November, and that job is to get my hair cut and colored. That money is labeled, it has a spot, it knows what to do and when. It's not random unallocated money just laying around.
I love that I am losing my guilt and fear around my money.
Long ago, back in the day, I was scared of dogs, especially big strange dogs. Then I had someone who really demonstrated to me that dogs just want to be loved. They just want to be paid attention to. They want to be told they are good doggies. They want approval. Now I love dogs, and wheenver I see one, I want to love it.
I was never afraid of money, exactly, but it was always like one of those dogs that might let me pet it, but could also snap my hand off if it felt like it, for no reason at all.
Now I know, it just needs attention. It needs me to be the Big Boss Of It. It needs me to tell it what to do, and when, and how. Like an eager puppy, it needs to be trained. Training doesn't mean spend it all, either. Being The Boss doesn't mean Go shopping. Though, I can and have shopped, when I need to, when I choose to. Just like having a house, a car, a dog, a wife, a husband, a child, a family... sometimes there are fun parts and sometimes there is work involved in those relationships.
And as the energy is trained and directed, so is the Apprentice trained and formed.
I love that I can take a cab ride to a regular appointment every two weeks, and I don't berate myself for "wasting" money and then feel spoiled and guilty because I owe money on student loans and I am supposed to be saving money. I have decided the cab ride is the best option. I know how much it is, with tip. I have assigned an amount of money - in cash - to this trip and I put it aside. When the day comes, I spend it. And if I want to take an extra cab in there for some reason, I have a category called "Blow Money" out of which I take the funds. It's not called "Miscellaneous", meaning "Unallocated" (lazy). It is for blowing, and blow it I shall.
Meanwhile, I am paying the minimum payments on all my debt, and I am saving extra money and putting it into an Emergency Fund. When I have a certain amount (FPU says $1000, but I may go with $500, or I may go with $2000, haven't figured that out) saved, in cash, then my extra discretionary income will all go towards a particular debt that I have decided to pay off first. I will not feel guilty that the other debt amounts are not being reduced much right now.
I had an odd moment today. I was looking at my bank account online. I was jotting down what I spent and where prior to switching to my envelope system. (That was rather funny itself. You could see the demarkation line. I went from having dozens of small transactions all over the place, to having only a few, large transactions from paying bills or taking out cash.) I looked at my amount in the bank and I realized that is my actual amount.
Which sounds odd but... even if all my transactions have cleared, I have never known what I really had to spend or use before. Because there was always a bill coming up later in the month, or next month, that I had to pay and thus needed to keep that money aside. I also needed money to live on, to buy gas, groceries, personal items, medicine, or just cab rides. I also had a deep primal need to keep as much money in my account as possible, "just in case."
Well, I have all the money I am going to need for food, medicine, personal items, entertainment, blowing, gas, or anything, for the next few weeks, in my actual possession, in cash. My numbers might be off, but so far I have over-allocated.
And I have almost $500 saved in an Emergency Fund, so if something really urgent comes up and it can't be covered by the cash I have on hand, I have that Fund. That's what it's for.
Today I found out that I had a small overdue amount due to one of my student loans for unpaid interest. I am sure they told me about this in some fashion, but my eyes glazed over, because it didn't have any meaning for me. This random $59 that I owed them on top of the tens of thousands for my education was not a blip on my radar.
But today, even though I did not technically have money budgeted for it (I did and I didn't, complicated to explain) I didn't feel the need to wait until my later payday. I don't need to carry it around in my head, don't forget, don't forget, don't spend that money, don't forget...why haven't you paid it, it's just sitting there...
Nope. I went and I paid it. Out of money in my checking account. And I don't feel at all nervous about it. I don't feel at all like OMG, what if my car breaks down and I need that money next week and it is gone!?!?! Or, What if I wrote a check that needs to clear?? Or, What if I need to buy something unexpected and expensive?!!?
Anyway, This is not a perfect system. I am still trying to work out putting aside money for Christmas. For other gifts. Saving to move to another place. I still struggle. I still have questions.
But last month I thought it would take me at least until Jan 2012 to save an Emergency Fund, and lo I am almost halfway there. In fact while writing this I just had another idea of where I can get some more cash to add to my Fund.
Also, yes there are parts of this that are very very hard. But like many things, it's only painful THE FIRST TIME. then it gets easier, then you get used to it... and someday... you start to like it. :-)