Monday, February 9, 2009

Sticking to a Budget

There's an old Dickens quote that runs: "Annual income twenty pounds, annual expenditure ninteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

So simple and yet so true, right?

I learned about debt the hard way as a young woman. I got my first credit card as a freshman in college before I even had a job, and I used it to tide me over whenever money got tight. I remember I racked up $600 in debt that I couldn't pay by my senior year.

That turned out to be nothing compared to what happened later. As a young mother with two children and a partner addicted to trouble, my car loan, medical bills and credit card charges combined to total about $17,000 of debt. In a desperate attempt to get out of it, I tore up my credit cards, gave back my car and finally borrowed money from relatives to pay it all off.

Then I went without a credit card for well over a decade.

I still buy nothing today (except houses) that I can't pay for with cash I have on hand. While I now have one credit card, I pay it in full each month and sometimes I pay it off early, as well. I use it only for online purchases for things I cannot get here in my small town (mostly school books).

I may be tempted, but I don't think I'll ever succumb to using the credit card for something I can't afford again, because the result is just what Dickens says: misery.

It isn't worth it, and now that my emphasis is on achieving the smallest possible "footprint", it gets easier to resist.

I think it helps to know your weaknesses. A friend of mine owns a store in town crammed full of beautiful clothing and shoes. Much as I like her, I don't go there unless I have several hundred dollars earmarked for spending. It's too tempting. Why put myself through that? I don't visit bookstores, either, unless I have twenty dollars burning a hole in my pocket.

Am I perfect at controlling my spending? Snort - not likely. It's an ongoing struggle. I screwed up in January, and I'm going to have very little cash for my trip as a result. Still, I don't owe anyone anything, and that's a true blessing.

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