Personal Finances: What Do You Think?

Since this last spring, I have been following the participants of the U-Turn Challenge hosted by First Tech Credit Union. It is one of those times when God provided teachers precisely when I needed to learn the lessons. In the month before I found out about the challenge, I had become determined to study personal finance and improving my own. I was even looking around for someone to talk to about it. Then, in God’s perfect timing, this challenge that four “teams” are going through dropped into my lap. Yesterday I had the opportunity to talk to my friend about how the challenge is going for her and it begged the question, how is my challenge going for me? I’ve blogged about this topic before but not for a while so I thought I would give you an update and ask for your input.

In one of my previous posts, I told you how I tried using my credit card for smaller expenses and then paid it off at the end of the month. Quite frankly, I got out of that habit after two or three months. I haven’t decided whether or not I want to continue using the credit card. Financially wise, I should use it to build my credit score and my credit history for a time in the future when I’ll need to be approved for a loan or some such thing. At the same time, I feel really uncomfortable with outstanding debt. I know I have the money to pay it off every month but still, knowing I owe money does not sit well with me. The only debt I have is my school loan which though hefty, is consolidated into one amount.

Willis’s most recent post on the U-Turn Challenge website is about their tax rebate they’re getting back this year and their process of deciding what to do with it. Do you pay back debt or save? (By the way, I feel okay writing about their experience since they blogged about it first.) It made me think about what I have decided when I myself have been in that very position and how those decisions have affected me today. A few years ago, I had several smaller debts I owed various people. That year I was given back a, for me, large tax rebate and after listing out and thinking over my options, I decided the most valuable way to use the money was to take care of all that debt save what I owed my mom to whom I was making payments. Another year after that, I already had enough money in my account to support myself for a month when I got a full time job so I used part of a month’s paycheck to completely pay my mom off the rest of what I owed her. That was a huge relief and it felt great to have that off my mind. This year, when I got an even larger tax rebate back, it didn’t take me long to decide what to do. I used a bit of it to pay for my plane ticket to Milwaukee to see my sister and placed the rest in a savings account where I haven’t touched it since. Especially in this economy, knowing I have enough in savings to fall back on if I really need to is really nice. My goal once I find a job with a regular income is to keep saving and to open up a Roth IRA where I can invest that money.

I have read in my research that people are usually either spenders or savers. I am definitely a saver, I don’t really like spending money. Couple that with my belief that I have more than enough stuff in general, and I just don’t go shopping all that much. In fact, I find that if I stay out of stores until I need to go into them, I am not tempted to buy what I don’t need and when I do go in, I only buy what is on my list. This works well for me.

Still, I admit to you I am terrible about keeping a running balance on my checking account. I keep a general eye on my accounts online so I know I’m not going to overdraft, but it still feels really good to know exactly what is in there at any time. I do know I have enough in there to cover what I spend, but I am not disciplined about writing it down. I did well for a while and then stopped. I also really like the idea of having a budget but without a regular set income, my general rule is to not spend a lot of money and to be frugal about what I do spend. (Coupons and bartering are my favorite techniques.) Thus, the budget I do have written up does little good.

I once had a great discussion about what self-discipline really means with one of my directees. I think it may be time to turn that conversation around on myself and explore why I have such difficulty with record keeping in this area. I love math, I love working out problems. Graphs, equations- these are fun for me and I’m good at it! Why can’t I connect these two?

Maybe this is like most things in life. We just have to keep trying. We walk for a little ways, fall down, dust ourselves off, and try again. It may take a while and several times falling down, but I am holding onto faith in myself that it will come to be easier and easier every time and that this is indeed, something I can excel at.

I know there are a lot of you who read this blog so I would love it if you would chime in with your own experiences: what works for you, what doesn’t, what you think of all this or any questions you have for me. Personal finance is a topic we usually don’t talk much about but I have learned from my friends, that it is indeed, important to discuss, especially in this economy when we need to remember these valuable lessons of saving and wise choices. It’s important to share our ideas. I look forward to hearing what you think.

365-09 #236