Discovering The Root of my Flawed Thinking

This is a guest post from Sheryl in Ontario, who is 40 years old with a grown daughter, and is trying to rebuild her retirement dream just 20 years too late for early retirement.

That small stash of cash I have had for emergencies? Gone.  The line of credit I had set up for emergencies? Used.  March has not been kind to me.  My boyfriend’s father passed away (it was expected) so we had to go out of town for the funeral.  Fortunately, I have family with whom we could spend the night, so expenses were kept to a minimum, mainly gas and about $20 for food on the road.

While we were away, I got into a fender bender with my van.  The van is 15 years old, and knowing that insurance companies will only pay up to the value of the car in repairs, I didn’t have collision coverage.  (By the way, I’ve been driving for 24 years, and other than a small collision 2 months after I got my license, this is my first accident.)  This has cost me about $2,500 (including hiring someone to fight my ticket, don’t want my insurance to go up, so I think it will be worth it).  I also finalized my taxes, and I owe approximately $1,800.  ( I know what I did wrong last year, but didn’t think a few “small” amounts would add up so fast, lesson learned).  On top of that, 2 of my closet inserts collapsed this month, not too much expense, but time and stress when I didn’t need it (patching walls, cleaning up smashed nail polish bottles out of my carpet).

Getting towards the end of the month, I noticed myself getting into my old way of thinking. “Things have already been so bad, and expensive, why not just make this a really bad month and start fresh next month being REALLY good with my money”.  The old me would then go and do a big grocery shop, and then look to see if anything was coming up to being replaced (those sheets/towels/jeans are wearing thin, I better replace them), and buy anything I’d been putting off until things were “better”.  Of course all the stress of having a bad time would result in more eating at restaurants, and perhaps other leisure activities to numb the stress.  I caught myself wanting to do this, but did not follow through.  OK, maybe one extra food shopping trip that was less than $20 for non-essentials.  It got me thinking about why I fell into this trap though.

I work in the accounting department of a car dealership, and every month I produce a financial statement.  Years ago, when the store wasn’t doing well, when we were having a bad month, we would put expenses that normally would get accrued, or that we knew would be coming up (repairs to the building etc) all into that bad month, and start fresh the next month.  Over the course of the year, it would show that we had one or two disastrous months, but the other months looked great.  It was all mind games for the owner (I was instructed to do that by the managers, a lot of politics at the time).  I was learning this at the same time I was learning how to look after my own finances, and applied the same principle. It’s similar to being on a weight loss diet, eating a piece of cake, and deciding that the day is already blown, so I may as well have fish & chips for dinner, and go back to behaving tomorrow.

Unfortunately, I have found that my personal finance cannot be approached in the same manner.  I can use averages of months as a guide, but I have to look at the big picture too.  Using a setback as an easy excuse to relax my self discipline is not going to get me where I want to be in 5 or 10 years.

I’m proud that I figured out why I used to do that, and that I can change how I think now.  The financial damage in March has been controlled, and I think April (and possibly May) will be a “spend nothing” month to get as much of this paid back as I can.

What bad habits have you changed, or are changing with your financial behavior?

4 thoughts on “Discovering The Root of my Flawed Thinking”

  1. I think it better to not try to overdo the not spending to make up for when you spend too much. If you view it as deprivation you will just end up spending more on an impulse or “binge”.

    It is the same thing as dieting. If you eat a piece of cake, just forget it and move on to getting back on track, do not take it as an excuse to eat more things you shouldn’t and do not try fasting or anything after to redeem yourself. I try to use a very short memory so I forget the mistakes and get back to the plan as quick as I can.

    If I spend too much then I will not have the money for other things, so in a way I am controlled by my lack of funds and that makes it easy to stay within my means.

  2. Oh wow! That all sounds super stressful!! I know exactly what you mean about just ‘giving up’ and going all out on the spending with the intention of starting fresh the next month. We even did it a bit this month in regards to our food budget. Things got rough towards the end of the month and in a few areas I kind of gave up until I have a day off and can do some extra cooking or something to get us back on track. I too an trying to get away from this thinking. The worst is that I know when I am doing it but usually when it happens, I am so stressed/ busy or whatever that I just stop caring. 🙂 Glad you recognized it and did so well in spite of all the craziness that March brought you!

  3. Regarding your ticket, I don’t know how it works up north but down here in most states you can do a Plea In Abeyance. You basically ask the court to hold on to your ticket and go on probation, usually for 6 months. You still have to pay the ticket, but after the probation is over, they dismiss the violation and it doesn’t affect your record, or get sent to your insurance. It’s a hassle going to court to ask for it, but it sure beats paying for a lawyer.

  4. Thanks for the input everyone!!

    @ Nick, as far as I know here in Ontario, if you don’t want to plead guilty and just pay the ticket (in this case the ticket has 3 demerit points as well), you have to make a court date to fight it. Once in court, you plead your case and they will usually either reduce the points and or the amount or throw it out altogether. I have 1 speeding ticket (15 kms over) on my record already, and adding another ticket couls be very bad for my insurance rating.

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