We’re in the fourth and final post of the series: Maintenance and Further Prevention. This phase details how I am able to maintain a debt-free lifestyle and a controlled shopping addiction. Controlled? Does that mean I’m still a shopaholic? I don’t think I am for the most part – I still love shopping and I still have urges, but I no longer feed my addiction to nearly the extent I did before.
Savings And Long-Term Goals
From 2005-2008, my debt and shopping addiction was spiraling out of control. I finally recognized I had a problem and set about fixing the problem from 2008-2010. In 2010, I was out of debt and in mid-2011, I had my dream wedding. At that point, I started to focus on contributing to the savings. My husband Justin had saved more than enough for an emergency fund since handing me our wedding fund. I set a personal goal to save as much as possible. I didn’t have reason to save with a deadline like I had with my wedding. I just knew that we wanted to build a substantial savings for our future. We plan on having children and eventually owning a house. We also wanted to travel as much as possible before expanding our family. We decided on a specific amount to save aka Savings Goal 1 then we’d go from there.
Justin and I added each other to our accounts, however we manage our finances separately as we did pre-marriage though I keep track of our entire savings. Currently my budget breakdown looks more like this:
- 14% Living Expenses – This has changed drastically. My brother and I sold our condo, and we’re now renting an apartment down the street from where we used to live. Also, I used to budget my cellphone bills within my living expenses. After the wedding, I switched over to my husband’s provider under his bill so I no longer include it in my personal budget.
- 19% Car Expenses – Justin and I purchased a car so these expenses include the loan payment, insurance, gas, and maintenance. Insurance for our two cars and rental are consolidated into one payment. We got a five year loan but we plan to pay it all off as part of Savings Goal 1.
- 7% Credit Card Payments – This accounts for significantly less than it used to. I rarely use my credit cards nowadays so there will be months where I don’t even need to submit a payment. When I do use them, it’s usually for travel expenses and buying e-books on my Kindle. I’ll submit payments for the entire balance or work it out so I pay it off in no more than three months.
- 40% Savings – This makes up the largest percentage in the breakdown. This coincides with my focus. Once we reach Savings Goal 1, I plan to open a Roth IRA. Maybe we’ll start investing in stocks?
- 20% Miscellaneous – I’ve consolidated food, entertainment, shopping, etc. into this category because these vary. I judge my spending on whatever is leftover after the above breakdown items.
I’ve made a habit of tracking my finances daily. Every morning, I’ll check all my accounts and update my budget spreadsheet to calculate how much of the Miscellaneous I have left. Every paycheck, I’ll perform recalculations and estimate spending for next pay period. As mentioned, I also keep track of our savings. I’ve become quite Excel savvy! Here’s my current spending cycle:
And I’ve controlled my shopping habits. I’ll plan ahead if I want to go shopping. Yes, I still go shopping but I’m not spending around $500 every pay period as before. That’s averaging $1000 in a month! Recently, I’d spend at most $300 in a couple months on clothes, shoes, and makeup. I’m sure I’ll write posts on what clothes, shoes, makeup, etc. I purchase. They still bring me much delight! I also don’t go to the mall as often. Justin HATES going to the mall so if I do go, it’s usually on an off Friday (I work a 9/80 schedule so I get every other Friday off). I don’t like going to the mall on Saturday or Sunday because I consider that our quality time.
There are three big motivators for me to focus on saving, thus helping me maintain control of my spending:
1) I never wanted to be in the financial position I was previously in.
2) I changed my mentality in spending once I understood why I became a shopaholic (Step 1 in the Solution). Last year, I realized that materialistic things don’t necessarily equate to success. I had all those things, but they weren’t giving me peace of mind and happiness which sort of led me to motivator 3.
3) I came to the conclusion I will eventually run a full-time business. I want to feel fulfilled and follow my passions. I’m still figuring all that out, but I know that it will take a lot of financial sacrifices therefore I have to start acting like I’m on a more limited budget (by putting a lot of my income into my savings!).
Justin and I are easily able to make pricier purchases because we have a substantial enough savings where we could elect to not contribute for a month or take money out without it being a significant hit. For example, we put a hefty down payment when we purchased our car. Since our wedding, my husband and I have travelled a lot – Cancun, Maui, Europe (Paris, Amsterdam, Rome, and Barcelona), NYC, and San Francisco Bay Area at least five times. We’re going to Thailand and Hong Kong in less than a month (super excited!), Vallarta for my brother’s wedding next year, and we’re planning to travel more in the future. Oh, and I guiltlessly had my husband buy me a Chanel purse while in Paris. I couldn’t quite allow him to get the classic flap bag because it costs as much as our whole Euro trip!
So, what’s my point? Where am I getting at?
- You can get out of debt
- You can control your shopping addiction
- You can build a substantial savings
- You can still make bigger purchases and travel the world
- You can do all this but you have to change your mentality and stay motivated
Here’s a summary of the steps I took (and am still taking) to shopaholic recovery:
I hope you’ve found this series helpful. Anything to add? Questions and comments are highly encouraged!