Getting Your Financial House in Order: No You *Don’t* Need a Brown Bagged Lunch

One of the tenets of financial responsibility–at least according to the “big kids” like Suze Orman, Dave Ramsey and Robert Kiyosaki–is to never ever spend money on anything that you do not absolutely need for staying alive. They create huge guilt trips around coffee from a Starbucks (or your local coffee shop if you’re not into the whole chain thing) instead of a drip maker at home and going for lunch with colleagues instead of sitting at your desk and trying to make the best of that now soggy PBJ you brought from home.

Their reasons for doing this aren’t completely gross. If you’ve gotten yourself into a financial pickle, one of the best things you can do is to stop spending on the little stuff so that you can concentrate on getting the big stuff in order. It’s the shopaholic/convenience-aholic’s version of AA: you completely cut yourself off from the thing that has a hold over you.

That doesn’t mean, though, that to live a financially responsible life that you can never ever buy that latte or spring for a mid-week lunch from a diner or cafe instead of choking down the cheapest sandwich you can make yourself at home. In fact, those things are absolutely possible. In fact, allowing yourself these small indulgences can even be a good idea; they can be what keeps you from going on a shopping binge and blowing your entire savings on something huge that you really don’t need later on during a “why can I ever have fun?!” binge shopping spree.

There are three important steps to living a financially healthy life:

• Getting your bills and money in order
• identifying your priorities
• creating a new budget  (there are two types of budgets: the “oh my god, I’m drowning in debt and never learned to swim” budget and the “I’m in a good place now and want to make sure I don’t regress” budget. We’ll talk about both)

If you’re screening your calls, afraid to pull up your credit report and spending everything you earn as soon as you earn it, this is where you start.

Step One: Figuring Out What You Owe

The easiest way to do this is to gather your courage and order your credit report from the major credit reporting agencies. Try not to have a panic attack when you look at them. Remember: credit scores are variable and change all the time. Moreover, your report likely has a few mistakes. Fixing the mistakes on your report can take some time but is totally possible. The goal is to get the most accurate report possible so that you know exactly what you owe and to whom.

Like we have already said, credit repair is something you can first approach yourself. As Lexington Law points out on their website, though, credit repair services often have better luck working with creditors than individuals. It’s important, at this stage of the game, to be honest about how much you trust yourself. Do you trust yourself to do the work of correcting your credit report yourself? Moreover, do you trust yourself to keep track of all of your bills and make sure each of them is paid on time?

If you know you’re not good at managing details, fixing your own credit is not the place where you try to learn new skills. It might be better to hire a professional to manage those details for you. That way you only have one bill to pay every month and your credit still gets fixed.

Step Two: Figuring Out Your Priorities

The problem with all of those financial gurus is that they make you feel like crap for loving things that they see as frivolous. Yes, it is important to pay off your debt, keep your spending under control and save for the future. That doesn’t mean, though, that you’re a loser if you prefer trying new restaurants to trying new recipes or if you’d rather see a concert or two each month than have a cable subscription. This is actually where fixing your credit and taking control of your spending can be helpful. Pay attention to what you look forward to as you live frugally and the things that make you the most resentful. Those things will come into play as you create your new budget.

Step Three: Creating a New Budget

Here is when you can create a new budget: when you’ve gone at least six months to a year without missing a single bill and no longer feel the need to spend to make yourself happy. It’s important to break the emotional buying cycle that got you into this mess. By now you’ve gotten used to following a budget and living by its parameters and keeping yourself disciplined.

The trick is to be realistic about what you need vs. what you want. You’re not going to be able to do everything you want but you already know that’s okay. And by now you’ve undoubtedly found some creative ways to get the things you want without having to annihilate your budget. For example:

• Do you love keeping up with fashion? Great! You can offset your love of the latest trends by selling last season’s hot items to consignment shops or on ebay.
• Do you love making things and seeing shows? Offer to review shows for local papers in exchange for free tickets.

By making a few things that you love a priority in your life, as we’ve already said, you’ll be less tempted to cheat on your new financial healthiness.

I’m making it sound simple and trite, for the sake of keeping this post concise. Make no mistake. Getting to the point where you’re able to budget for concert tickets or whatever isn’t easy. It takes work and it takes considerable sacrifice and that can really suck. But trust me when I tell you: the work and the sacrifice is worth it. It’s good to be true to yourself, no matter what masters Ramsey, Orman and Kiyosaki might tell you.