It was in February of 2008 that I decided to change my relationship with money. I was sick of living week to week, always being scrambling to pay bills, being in debt and being generally stressed over money. I bartered with a life coach for a couple of sessions, but quickly realized I didn't need someone else to tell me what to do. I knew what I needed to do! I was always listening to shows about personal finance and debt, I had gone through the Dave Ramsey thing (and paid off a bunch of debt, yet there it was again, creeping up on me) -- I knew what I needed to do, and I finally decided to just do it.
I put myself on a weekly budget of $200.00 which I took out in cash each Friday. This was to cover human food, pet food, gas for the car, and any shopping (clothes, household goods, books, etc.) and entertainment (coffee, meals out, movies) for me for one week. Anything left over would go into savings. I went back on to the snowball model to pay off my credit cards, and a few months earlier had started an IRA which had a monthly debit from my checking account (so I couldn't skip paying it).
One year in, I am in much better shape. I have paid off all my "little" credit card debts (Care Credit -- which provided much-needed funding for a pet operation and Sleepy's -- for a new bed), which eliminated a couple thousand dollars of debt and freed up a few hundred each month for other expenses. I started saving for the first time since I was a teenager. I usually had something left over from my $200 allowance and even if it was $1.00, I put that money into my passbook savings each week. I have depleted it a couple of times (once to fix a collapsed celing in my house, twice for my weekly allowance), but hey, it was savings, not debt! And then I've gone back to putting money into it and have continued my savings habit.I just completed a mortgage re-finance which also rolled in a large credit card (around $9500), and a home equity loan.This monthly payment will be less than what I had been paying (due to the great interest rate) and will eliminate two additional bills from my life.
I cancelled non-essential expenses. I got rid of cable tv (which was only costing me $6.00 per month, but I decided was non-essential), and a few months ago cancellled my spring water delivery (which was $40 per month, but was delicious mineral water and supported a local business). And I downsized my home telephone service to something that is local-only, per-call rate and is very inexpensive.
I buy almost everything used. Clothing, household products, books (if not simply borrowed from the library), etc. When I can't buy it used, I TRY to buy it from the source, especially for food. I buy my milk and eggs directly from a dairy, and get as much produce straight from farmers (besides what I can grow myself).
What has fundamentally happened is that I've changed my thinking. I used to operate in scarcity/fear mode, but now I feel like I'm in abundance/security mode. I have plenty of stuff (in fact, I got rid of a lot of stuff over the winter), I make big batches of food and freeze some, so I know I have plenty of food, I have enough money to make ends meet; I pay my utility bills as soon as they arrive so I don't worry about paying them; I live in a city with lots of free entertainment and I'm a block from the library; I have plenty of ways to keep busy, and as I pay down my mortgage (which is now, apart from my blasted student loans my only debt), I will eventually own my home and be even more secure.
I love doing what I can by myself -- soap and cleaning things, food, mending clothes and sheets, fixing clocks, resuing things -- it helps with the feelings of security and independence, but it's nice to be part of a community (like this one) where other people are likeminded and trying to reduce their consumption. I feel much less wasteful, too. I used to be proud of how much I recycled each week. Now I'm happy to see how little is in my recycling bin, since it means I'm consuming that much less.
While anything is possible, I am pretty confident that the changes I've made are lasting ones. My outlook on life has changed so fundamentally and completely that I don't think I will ever go back to my old ways of profligate spending. I used to feel a reward sensation when I bought something, but now I feel that same sensation when I put money into the bank. I like going to the thrift store and walking out empty-handed because I know that I don't need a single thing there.
It has been an interesting journey so far. I can't wait to see what February 2010 looks like!