I was at a friend’s place Friday night and explained I was trying to get my financial house in order. She smiled sympathetically and said, “January’s not a good time to do that.” It’s hard to disagree. The holiday fiscal hangover lasts well into the month as the bills and bank statements arrive. Here in Canada we also take a hit on the first pay cheque of the year when Canada Pension Plan and Employment Insurance deductions restart after their accelerated collection during the first part of the year. It means that I am taking home a lot less cash.
I’ve been reading a book called The Energy of Money by Maria Nemeth. It’s a perfect selection to support any kind of New Years resolution. I have found her tools for revealing our preconceived notions about our relationship with money and success really effective. It’s the only time that I have completed many of the written exercises in a self help book and I have found them to be surprisingly evocative.
I admit discussions of “energy” can seem a little granola, but working through the chapters it is clear that all of our most profound personal relationships involve some kind of financial element. As a result, unacknowledged and unresolved personal issues directly affect how we interact with money. I wouldn’t say I am complete disaster financially and I am doing many things “right.” However, I came to realize that my nebulous relationship with money stems from my fear of knowing that I do not earn enough to sustain my lifestyle and all the commitments that go along with it. Interestingly, by not knowing for sure, I deny myself the opportunity to make my life sustainable.
Here’s another interesting pattern I have recognized: I know that I should save money, but I also have a chunk of consumer debt. My logic is that I should pay off the debt first and then begin the savings program. My solution was to use any “leftover” money each payday to pay down the debt. But with no formal budget, not surprisingly, this program results in neither savings or debt reduction.
So, what’s a person to do? To begin with I tallied up all of the expenses associated with Christmas. Yikes. It made me wonder which of the transactions really helped to improve our Christmas experience. I realized that there were many impulse buys I did for time savings, but I didn’t get much emotional bang for those bucks. I found this to be particularly true of stocking stuffers. A magazine, some sweets, personal care items like toothbrushes and travel tooth paste, quickly added up but didn’t really create a Christmas glow.
I also began to wonder why we put such an emphasis on gifting at Christmas, adding even more pressure at a stressful time. I soon realized that we are so busy most of the year, that it is the one opportunity to acknowledge the important people in our lives, so I am not prepared to purge my list yet.
Starting January 1st, I have begun to track every transaction in a spreadsheet, breaking the expenses down into groceries, house, car, kids, utilities, etc. This has been quite interesting and will help me to develop a personal budget, which is my next big step. I’ve also opened a no charge chequing account that I will migrate to over the next month or so, and I’m being much more careful about eating out and turning down the heat.