The Psychology of Change

In a recent article in the Toronto Star, journalist Ian Harvey wrote about the reasons why diets don’t work: “The biggest barrier to success are psychological, and the patients who fail most often are those who aren’t ready to totally commit. Conversely, those who are either at crisis or have decided to change — whether it’s quitting smoking, exercising or dieting — will be more successful in making better choices.”

One has to commit to change in order for it to happen. It’s not something that happens overnight. It doesn’t even happen in a week’s time. You’ve got to really build upon small successes slowly but surely.

Trust me, this is me building myself up as much as it is a reminder for anyone else.

I’ve begun building my emergency fund with a dollar a day in the jar. So far so good. And my Spending Journal is being used. This journal will help me keep track of each dollar that I spend.

My next step is to begin making some small changes to how much I spend per week on various things and to increase my income. The biggest money pit for me is food. I spend a lot eating out. When I don’t care, I don’t care and I’ll spend without even thinking about it, to the point where the Popeye’s Chicken restaurant in my neighbourhood knows my order. That’s embarrassing and unhealthy for me. I shouldn’t be eating there so often.

But enough negative talk! This isn’t about what I should or shouldn’t be doing. Here’s what I did today that I’m proud of: I bloody well packed a lunch, got the coffee maker ready in the morning, brewed a pot while I was in the shower and didn’t almost leave the travel mug sitting on the kitchen counter. Okay, maybe I did. But I remembered it while I was in the elevator, so I wasn’t too put out by it. I had been distracted by my phone, which I was checking emails from on my way out the door. Note to self: next time, just wait. You don’t have to read them while you’re getting ready. I had received a rather chastising email from someone about a post I made on my reading blog and it was bothering me while I was getting ready, hence why I wasn’t fully mindful of the fact that I didn’t have everything in-hand. But, no matter, I got my coffee.

mary-brownsTonight, before I go to bed, I’ll make myself lunch again to take to work. It worked out really well today and I’m looking forward to eating food from home again. It was just enough to tide me over until we went out for supper this evening to Mary Brown’s. It’s not often we go to Mary Brown’s, but now that we have my mother’s car for the next couple of months we’re making a point to go occasionally because we love it so much. And because I hadn’t bought my lunch today I was doubly happy to get my Big Mary sandwich, relatively guilt-free.  (Still not the healthiest meal, you know?)

Anyway, I’m taking small steps. The Emergency Fund is coming along, $1 a day, and my expenses are down by at least $5 from a week ago. (I spend roughly $5-$10/day on lunch.) I’ll be interested to see when I tally up January’s funds to see how they compare to December’s. Will I inherently spend less now that I’m tracking my dimes and nickels (no more pennies in Canada!)? Or will my food budget be the same? I think it will take some time to see a difference because I’m now tracking all of my money, not just what I have in my bank account or on my VISA. The bank withdrawals category is a big ol’ I Don’t Know Where It Went since I haven’t kept track of my cash for the last six months. But that’s okay. We’ll see where it pans out.

In regards to my VISA, I’m also working on moving my balance to a lower interest rate card. I’ve requested an increase on the lower interest rate card so I can put the full amount onto it. I don’t know if I’ll get it, but it doesn’t hurt to try. Even if I can’t, I’ll save some money on interest by switching some of the balance over and paying the higher interest rate card off as quickly as I can.

What I need to prepare for is my student loans. I’m about to put that back into the budget because I can’t hold off on the payments any longer. I mean, I could try and ask fro repayment assistance again and I’d probably get it, but that’s the irresponsible thing to do. I need to pay these debts off once and for all. If I don’t it’s just going to continue sitting on my head like a dead weight, not contributing anything. Considering I can’t even tell you half of the courses I took in university any longer, I think it’s time I put this degree to bed and move onto the next phase of my life, right? Right.

Introduction

Solvent: Adjective; having assets in excess of liabilities; able to pay one’s debts.
Synonyms: financially sound, debt-free, in the black, in credit, creditworthy, solid, secure, profit-making;

What do I owe?

Student Loans:  $14,434.11
Interest Rate: 5.50%

My student loans have been stopped for about a year now as I transitioned myself into freelance work. I justified putting a stop to them instead of working them into the budget by thinking that I would eventually get them back into the mix. Thus far I have not done that and it’s been over a year since that happened. Instead of actively paying down my student loans during that time they have been sitting around doing nothing. I’ve avoided the National Student Loans Services so well that I don’t have my Username and Password for my account in a ready place for me to find it. For the purposes of this post I have now hunted down my username and password, and I’ve written it down on a piece of paper that will be filed away with the rest of my student loan files.

VISA: $8.025.34
Interest Rate (Purchases): 19.99%
Interest Rate (Cash Advances): 21.99%

This is the first month that my VISA has gone over its limit. When I did my six month evaluation of my budget, I realized that I’ve been spending roughly $1000 more than I’ve been making, so it’s not a surprise that my VISA has taken the brunt of that extra cash and now I’m up shit’s creek without a paddle. The main culprit of this is cash advances. While I’m fully aware that you should never take cash advances out because the interest rate is much higher AND it begins as soon as the cash advance is taken out, I have been using them anyway to cover my rent in case my pay cheque comes in late.

In the future, I would like to use a buffer of $1,000 in my bank account to do that instead. I’ve begun saving for this emergency fund with $1 a day. It’s not much, but it’s all I can afford right now.

My other goal is to eventually close this account and pay off my debts with my low-interest MBNA credit card. I have a card with a 6.99% interest rate. I will use that card to pay down my debts and once the VISA is completely wiped I will close the account because I do not need it. The MBNA card is with another bank and it has a much better interest rate. There is no reasonable excuse for holding a credit card with such a high interest rate when I have one with a better rate.

HBC Mastercard: $42.10
Interest Rate: ???

It’s not much. I don’t spend a lot on this card. Once, maybe twice a year. But I’ve missed one payment waiting for the money to come in and I know that it affects my credit rating. I have no reason to own this card other than the occasional trip to Hudson’s Bay Company. I convinced myself that it’s a good idea to get it one Christmas and I’ve held it for sometime without having any problems with it, but even $40 can cause a problem with your credit rating when you don’t pay it off right away.

Also, I’m aware that a department store card holds a much higher interest rate than a regular VISA or Mastercard. I’m unaware of the interest rate on this card. My online account does not say and when I tried calling to update my mailing address, which is missing the apartment number(!), I couldn’t get through to a human being and I lost my patience. The lack of an apartment number on my mailing address is the reason why I haven’t received my bill in the mail yet either. I was aware that the bill was missing, but it took me this long to track down the reason. Once I pay off this card I’m going to close the account and I won’t need to worry about it any longer.

Savings

Emergency Fund: $3

The goal is to build this to $1000 so I have a good buffer in my bank account for occasions such as the one I mentioned above.