Tuesday, October 12, 2010

I am a financial dumbass.

I am a symbol of all that's wrong with Americans from a financial perspective.  I have managed to parlay a six figure salary and generous friends and family into a mountain of debt through an inability to rein in my spending.  I don't know why I feel obligated to spend every penny I have, but I do.  I have lots of cool stuff which is hardly ever used.

I don't need to declare bankruptcy any time soon, but I realized this week, I'm on very thin ice and that I better keep my job for sure.  Buying house hasn't helped, but my bigger problem is my spending habits.  I already cut Netflix back to just one movie out at a time.  Will saving $5 a month make a difference?  Probably not, but watching less discs will use less electricity and it also reaffirms I need to make sacrifices.  I was getting the NY Times delivered daily.  I was going to cancel it completely, but you need to call them to do that so I cut back to getting it only on Sundays.  I'll try that out for a bit and then see if I want to cancel completely.  I'm also forgoing League Pass so I'll just watch the Blazers illegally online.  I'll probably cancel cable after the Super Bowl.

None of the above is really all that major except for maybe cable so I'll need to have discipline not to buy anything unless it's necessary or adds value to my house.


postyum said...
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postyum said...

Woah - I don't make near six figures whatsoever, and I have really expensive housing (so I lose 1 of my 2 paychecks for rent -- I get paid twice a month).

What in the world are you buying each month? I have 3-disc Netflix, $120 Internet/Cable TV bill, and $70 mobile phone bill as my main recurring expenses. But otherwise, unless I buy some expensive clothes, I find that I'm able to hold onto enough of my second paycheck to increase savings each month by at least $500. I also contribute 8% of each paycheck to 401k too.

I definitely felt like you earlier in the year though, when I had a lot of car, medical, and random moving expenses to deal with though.

Jeremy said...

Heh. Crazy eh? More than half my salary goes to my house - mortgage payment, PMI, school taxes and property taxes. Another hefty chunk goes to paying back my 401k loan for my roof. The rest goes to credit cards, cell phone, cable, etc. I also owe people money from when I was unemployed.

I think the biggest difference has been the 401k loan since the payback is more than $600 per month. I'm contributing 6% in my 401k now, but I think it only costs me something like 3 or 4% because the deduction is pre-tax.

Most people are surprised at how little discretionary money I have, but I'm paying the price for past stupidity/greed.