Getting out of Debt by Kristen Math
This is the first year that my husband and I sat down to make a New Years resolution together. Having recently celebrated the end of fellowship and the beginning of “real life” we had spent the last several months trying desperately to organize and manage the mountains of debt that we had slowly accrued over the last 8 years. This proved to be a much more difficult task than we had ever imagined. We resolved that this would be our year to tame the proverbial beast and set out with a plan.
Probably the most difficult part for us of gaining financial control was sitting down and figuring out exactly what we earn…and what we owe. Things sure look different when they are written out in black and white. One Saturday while the kids were busy playing, we pulled out our credit card bills, monthly statements for utilities, and our student loan information. We realized that our worst culprit over the last several years had been credit cards. To survive residency and fellowship, we had relied disproportionately on credit cards and the hope of a larger post-training income to pay them off quickly. What we hadn’t counted on were the high interest rates that would prevent us from making any headway.
We looked sadly around the house. We have no wonderful furniture or expensive collectibles. The kitchen is decorated in dollar store sheik. Our living room is filled with lawn furniture and the dining room is empty. We have little to show for our debt. Had we really accrued this much debt buying groceries and diapers? We decided to take a bold step and track our spending.
After realizing that our financial life was out of control, we decided to take closer look at how we were managing (or mismanaging) our money. Armed with little notebooks, we set out to determine exactly where our money was going. Our initial good intentions to write out each item did not last long. We resorted to taping our receipts into the notebook. This turned out to be an even better method. We found ourselves tracking not only how much we were spending, but the method and perhaps even more importantly, the day and time (something that we wouldn’t have considered important).
After two weeks of saving receipts we reviewed the notebooks to look more closely at our spending habits. We were in for a huge surprise. The worst culprits were Wal-Mart and the Grocery Store. For example, we went to Wal-Mart wit the sole purpose of purchasing inexpensive cleaning supplies only to leave with printer paper, spray paint, lollipops, socks and a video. We did not enter Wal-Mart without spending at least $100 and our primary method of payment was plastic. The most interesting information that we learned though was that the time of day and day that we shopped was directly related to how much we spent. Evening trips to Wal-Mart after a long day were much more likely to result in impulsive buying. We spent money to feel better … at least for a short time. If we waited until the weekend to go out when we were well-rested, we were much more likely to shop responsibly.
For us, making changes has been a multi-step process. We do not go to Wal-Mart in the evening to unwind anymore. We take cash and a calculator to the grocery store, and discuss any purchases over $20. This has already made a big difference in our financial health and we feel much more in control of our financial future.
