I’m Restarting My Financial Plan

I went off the rails with coronavirus spending

I have specific financial goals. Some are unique to me because of my health. Some are simply smart, logical ways to handle money. But I realized being stuck home under the coronavirus, has led me astray financially.

Time to check my wasteful spending, if I want to meet my financial goals. I’ve noticed that during the coronavirus, I’ve been making a lot more impulse purchases. I’m certain there’s something psychological to this, but I’ not sure what. I can’t cut my hair, so I bought extensions. I bought my daughter a new backyard pool and sparkle chalk to keep her entertained. I bought my son’s girlfriend several birthday presents. I bought my son two very expensive very stylish masks. I bought myself a wonder woman mask. I bought my daughter a unicorn mask. BTW, I already bought us all black masks long ago. I bought a bunch of hair supplies for my new extensions. And I bought myself, on a very good sale, a hydro facial that I cannot get until it’s safer. The point, I’m spending faster than I’m earning. None of the items are necessities. I suspect I’m emotionally filling a void left by the coronavirus. But, what I do know, is that if I continue to behave this way, I’m going to struggle in the future.

I noticed my spending and decided the net step was to go back to basics. While I don’t agree with everything he tells devotees, I do agree that starting with Dave Ramsey, is a great way to handle spending According to everydollar.com, “How to win with money,”

“…Dave Ramsey, a guy who worked his way back from bankruptcy and became a national best-selling author, radio host, and financial expert.

Dave used specific steps he learned through life experience and teaching others to save for emergencies, pay off debt for good, and build wealth.

I went directly to the Dave Ramsey baby steps to determine where I stand financially.

Step1 Save $1000 for your starter emergency fund. Done

Step 2 Pay off all debt (except the house) using the debt snowball. I need to work on step 2. I have a tiny amount of credit card debt and some medical debt left to pay. Probably about one thousand in total debt. At least half of it is due to a recent insurance issue and additional medical debt. Hopefully, talk with the insurance company will resolve some of it.

Step 3 Save 3–6 months of expenses in a fully funded, emergency fund. Here is where I diverge from Dave’s plan. I cannot get life insurance. I do not want to leave the burden of my final expenses up to y family. So, I need a fully-funded final expenses fund in my bank account at all times. I’m within shooting range. I’m not 100% there but, I’m very close. To me, this is a bigger priority than paying off all debt. Especially in my state, where medical debt is not marital debt. Meaning, if something happens to me, my medical debt will not haunt my family.

How I plan on achieving my steps.

I’m going to start using the, “Pay yourself first approach to spending and saving.”

Nerdwallet.com, “Pay Yourself First: Reverse Budgeting Explained,” describes a 50/30/20 approach to budgeting. 20% to savings and debt repayment, 50% to necessities, and 30% to wants. This way, achieving the goals does not feel so brutal.

Once I set this budget for next month. I plan on strictly adhering to it. If at the end of the month, I have money leftover in my spend account, I will add that to savings or pay down extra on my debt.

Other ways to potentially achieve y goals faster, add another stream of income, sell items I don’t use or no longer need, and basically anyway, I can earn more, work toward it.

I fully plan on updating on my progress in the future.