Financial Friday: Stop Digging Deeper

Last week’s post ended with J and I surrounded by piles of documentation that showed us just how badly we were handling our finances. It was scary, it was a lot deeper than we had imagined or believed possible, and it was a hole we had created ourselves over a lengthy period of time by making the same mistakes and choices over again. It was also something we were determined to overcome and to do that, we had to put down the shovel and stop making the problem worse.

I do want to add an important note here that success is achievable when all parties involved are working towards the same financial goal because you need that accountability and encouragement from each other. If you’re single, perhaps you can find a close friend or family member to hold you accountable when you feel like tossing in the towel. Find a cheerleader who can encourage and uplift you. Ideally, this person would also have a financially savvy mindset or perhaps this could become a mutual journey towards financial stability for each of your individual households. If you have a spouse, working towards that goal will be a lot easier and probably go faster if you are both in agreement. It will be hard to make headway if one partner wants to make improvements in the family’s financial situation while the other partner either doesn’t care, drags their feet, or willfully sabotages your efforts. It would be like yoking a mule and an ox to the same cart. That ox might be able to drag that mule down the road by force, but if that mule is stubborn and dragging its feet, the journey is going to be a lot more difficult for all parties involved.

J and I knew that we needed to be on the same page if things were going to get better. I asked him what he thought back then when I had it all laid out in black and white … and a myriad of highlighter colors.

“It was confusing as all get-out for me, seeing all those colors. I was confused but you had an explanation for each one. You dug a lot deeper into a solution than I would have.” ~ J ~

When we started looking at where our money was going, there were some areas that immediately jumped out to us as ways to keep more of our money in our account. J promptly pointed out that we could curtail the dining out followed by stopping our trips to the metroplex as that usually included a meal or two, shopping, and additional fuel consumption to get there and back. Also, we usually ended up buying stuff we honestly didn’t need but was more along the lines of impulse buys. It wasn’t an instantaneous thing though as J recalled, “We weaned off and worked our way down on things like dining out, cutting it down to like two or three times per week then down to payday Fridays only instead of going cold turkey.”

Change is hard, especially when it involves changing habits that we find enjoyment in, but our first step was to plug those leaks in our finances and that meant stopping a few things. So, in addition to weaning ourselves off the fast food lifestyle (which isn’t as healthy for us anyway) and stop tempting ourselves with shopping trips that were done out of boredom, we decided to cut the cord on cable. With so many other options out there for entertainment, we felt that this was a fairly easy choice for us. We watched a lot of DVDs – either our own collection or checked out from the library – or used the Internet to stream video. I had an Amazon Prime student account so streaming video was included in my subscription anyway. If you have never checked out your local library for DVD options, I strongly encourage it! You never know what you might find, from new titles you fall in love with to older ones that you are excited to watch again… and they’re all FREE!

I also pulled all my credit cards out of our wallets and froze them. Literally. I took out a large Tupperware, filled it with water, dropped in the credit cards, and stuck it in the bottom of our chest freezer. I figured if we wanted to use our credit cards bad enough, we were going to have to work to get them out. If we couldn’t get to them easily, perhaps we wouldn’t keep adding more to those debt balances. I liked to joke about it with friends when they’d ask us what we were doing to improve our financial health: “I froze our assets!” and then with a big smile and a lot of effort, I would dig out the Tupperware containing those plastic devils that enabled some pretty poor decision making for too long. It kind of looked like our own personal Tesseract but instead of unlimited energy, it contained the potential for unlimited trouble.

Essentially, after writing things down, really examine what it is that you’re looking at. Do you have any expenses that are revolving that you don’t use like that gym membership purchased during a sale because you made a New Year’s resolution to workout but you never go? Or what about those clothing subscriptions where they send you a box of curated items for you to select from where you pay for what you keep? If you cancel the subscription, you won’t be tempted to buy and add to your debt. We did a “loot box” type subscription for all things Scottish because we love the country, its culture, its history (and genealogy research shows that I have roots there as well); however, when you think of a need versus a want, a subscription box quickly became a want and not a need so on the chopping block it went. If it helps, think of these suspended subscriptions as merely a timeout that you’ll reactivate in the future after getting your financials sorted out. That could be a goal to set: have enough room in the budget for my subscription box each month! You’ll need to think about goals you might pursue to keep you motivated.

One of the hard cuts we made was canceling the cable. With the streaming options available out there, we felt that we could stay entertained well enough with our DVD collection (which was extensive thanks to our frequent Hastings purchases) as well as watching the videos available from my Amazon Prime student subscription. Those were free so why not try some new shows and see what else is out there.

After you’ve picked through your budget for those line items that could be cut, it’s time to examine the proverbial fat on your monthly bills. If you’re like me, you probably don’t read the billing statements each month but just see if the amount you owe sounds about right or close to what it was the previous month. I would like to share a story with you about why reading those statements can save you some money.

We had been paying the same amount for our Internet service for a few years and at some point, we had purchased our own router. In my billing statement, there was a line item of $6.99 each month for the rental of a routing. I had been paying the Internet provider $7 a month for more than two years for no reason. I reached out to the company and they were only able to refund the preceding quarter’s fees so I recouped $21 but still. Two years at $7 per month equals $168. It might seem small but if you’ve got a bunch of line items you’re paying unnecessarily, it adds up pretty dang quick.

With your Internet, also check to see if you actually need the speed you’re paying for or if one tier or two lower could still meet your connection needs. You might save $10-20 month by going a bit slower. If you utilize services like Netflix where your price increases per screen, see if you can swing dropping to one screen and then either share who accesses it or watch programs together.

J and I were on a mission of reexamining every bill and that meant making a lot of phone calls. We shopped car insurance companies, asked if they had discounts for veterans (J served in the Marine Reserves), good drivers, etc. We would ask what discounts were offered to see if we might qualify for one or two. This type of questioning was done with every service provider we used.

When I called our cell phone service company, we discovered that we got a bigger employer discount through J’s employer than mine (22% vs 17%) so we switched that. We checked to see if our usage was low enough to drop another tier in service capacity. It wasn’t but it never hurts to check. You should also see if other providers offer the same or better service in your area for a lower price. We discovered last December that Cricket is now offered where we are; it runs off the AT&T towers and we had used AT&T for many years. In fact, we were with Cingular when AT&T purchased them in 2004 and we simply stayed with AT&T. We have a history of brand loyalty but after our Great Epiphany, loyalty is all well and good but by golly, we had better be getting the best price possible for that continued loyalty or my dollars will be spent elsewhere. We compared pricing and even with J’s employer discount at AT&T, we still spent $113/month. With Cricket, we could get a better plan for $80. It was a no-brainer so we switched for the $33/month savings. We had issues with the Cricket vs AT&T service on vacation in June but other than that, it has been a good decision for our family.

We changed our electric to that average billing program to help us build a consistent budget. We were like newborn foals finding their feet; we needed a level surface to stand on and that meant consistency in our bills. There is now a website you can use (www.powertochoose.org/) to help you compare pricing for electric services. Comparison shopping has come a long way in the last decade or so!

I had mentioned earlier that we had a number of credit cards. I called every one of them and asked if they could lower our interest rates, even if it was just for 3-6 months, so we could try and get them paid off. I think all of them agreed after some pleading. Granted, we didn’t get them all paid off while the interest rate was lowered but it certainly helped our payments to go more towards principal than interest during that time. I also canceled the store cards to reduce the temptation to shop at those retailers.

Our budget was like a colander and we were trying to block and narrow as many holes as possible so our money would last longer. These are several of the holes we explored to try and improve what money we had flowing out of the family coffers. These changes did not occur overnight and the changes were not instantaneous; our budget was and still is a work in progress kind of like how we all are in life. We grow, we change, we adapt to external influences or impacts, but hopefully we keep moving forward towards a greener tomorrow.

Next week, we will share some of the things we did that helped us start climbing out of the hole. Upwards and onwards, fellow Texans and residents of Earth! ~ Lacie ~