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Budgeting Your Money: Avoid Spending Into a Stressful Financial Life

I’ve always loved to shop, and I think a lot of women and men can identify with the lure of shiny new things. Unfortunately, I was never one with strong personal budget management skills. While in college and shortly after, I was with a man who made less money then myself.

He’s generally conservative with money; I’m not. I spend frivolously on parties, weekends, nights out, dinner, lunch, new shoes . . . anything. And I write off credit card debt to “Well, my income will just keep going up, so I can afford it!”

So here I sit. I’ve bought a condo and while the market was hot, I took out $28,000 in equity to ‘remodel’ — and, well, I’ve remodeled the bathroom and done some minor fix ups, and I paid down (but not off) my credit card debt.

And I keep spending.

The market has gone flat and my condo is worth about $15,000 less than I owe to my mortgage and equity loan — maybe $11,000 if I’m lucky. I can hardly afford to make my mortgage and association payments. And so I use credit to keep bringing more shiny, new things home.

Things I don’t need have accumulated into another $14,000 in credit card debt. And a $17,000 car loan. And I’m in graduate school, so I have to pay tuition too.

I’m single now and the two of us could hardly afford our lifestyle. Now I’m saddled with debt but hesitant to change my lifestyle drastically to make it better. I like my life. But I don’t sleep many nights because of the stress.

I am a train wreck and I need to find a way out. I struggle, struggle, struggle to pay bills and am now paying off one credit card with another — a sure sign of disaster.

The thing is, I’m making enough money to afford my lifestyle — if only I hadn’t already spent that money before I was making it. Hopefully with Mint’s financial management software, I’ll be able to change and get to a point where I can live a much less stressful life.

Train Wreck Tuesdays are a weekly post of horrible financial mistakes. They are posted anonymously. Submit your story; if you’re selected, you get a free personal finance book. The best comment gets the same prize! Check out past Train Wreck stories here.