What I Learned from One Year of Credit Card Bills
Casey Hynes — Up Close and Personal Finance
You can learn a lot about a person by looking at her credit card statements. At least, I learned a lot about myself when I looked at my own.
In an attempt to organize my finances before 2017, I sat down late last year and opened my budgeting app of choice, You Need a Budget. YNAB is a fantastic platform for breaking down your budget and tracking spending. The idea behind it is to give every dollar a job. This makes it easier to save, budget for big purchases, and avoid overspending on things like fast food and random products that looked cool on Instagram.
At least, that’s how it works when you use it consistently. My YNAB profile was a little out of date by the end of 2016. From about June to December, YNAB had been the last thing on my mind as I traveled around the country for friends’ weddings and then hosted a flurry of guests throughout the fall. Who has time to budget when you’re having so much fun?
Of course, those were the months when I most needed a budget, and I knew it was going to take some disentangling to make sense of where my money had gone. I was determined to get back on track, and spent an entire afternoon meticulously classifying expenses under labels like “Rent,” “Groceries,” “Dining Out,” and “Stuff I Forgot to Budget For.”
Once that was done, I went back through my categories to see how much I’d spent and where over the last year. Concepcion de Leon from Glamour once said your credit card statements reflect your values, and if you don’t like what you see, it’s time to reevaluate your priorities. I wanted to see what my spending patterns said about me, and whether they aligned with my goals.
It was enlightening, but it was not fun. I had been griping about money being tight in recent months, but when I saw where much of my income went, it was clear my spending was (surprise, surprise) a core issue.
It was a disheartening realization since I’ve worked hard to rein in my spending habits over the years. I’m not much of a shopper when it comes to clothes, shoes, and accessories now, but I used to be. I once dropped $700 (most of that year’s tax return) on clothes for a 10-day professional development trip. I justified the spree by telling myself I needed nice clothes since the trip was work-related—because somehow the clothes I wore to my actual job every day weren’t good enough. The decision was irresponsible, but it was also utterly representative of my spending priorities in my early 20s.
I’ve since kicked my clothes-collecting habit, but I still overspend more often than I realize. Now, if I have a weakness it’s wanting to lavish dollars on experiential spending—visiting friends in different cities on the weekends, celebratory dinners, wine for any occasion I can justify.
In recent years, I’ve realized there are real costs to those decisions and that reckless spending hurts my financial well-being just as much as shopping sprees. Still, I falter, which became all too clear when I reviewed last year’s statements.
Dining out expenses alone came to nearly $2,000 for the year. That is outrageous, considering I live in a small Midwestern town where there are only a handful of restaurants. To be fair, some of those costs included meals for both my partner and myself, or were splurges while visiting family in New Jersey where food costs are higher. You can’t put a price on good pork roll, egg, and cheese sandwiches, after all.
But even allowing for those exceptions, the sum was still too high, especially when I saw a good deal of that money was spent on fast food. How did I think it was appropriate to spend $20 at Taco John’s or $23 at Burger King? It’s one thing to splash out on a nice dinner; it’s quite another to swing through the McDonald’s drive-thru several times a month. No wonder my belt was feeling tight, literally and figuratively.
I also discovered I’m still a compulsive spender when it comes to books I don’t have time to read, online courses I probably won’t start for a year, and trendy household items I don’t necessarily need. None of these items are inherently bad, but they shouldn’t be priorities when you’re trying to get out of debt, and save for a house, and put away emergency savings.
Seeing how much money I spent on things I didn’t use or need, not to mention purchases that were literally unhealthy, was disappointing and could have derailed all my prior progress.
Fortunately, I had already decided 2017 was not going to be about money shame. This would be a year for empowerment. Instead of berating myself, I vowed to learn from my spending habits and take concrete actions toward change.
My partner and I agreed not to dine out during the week unless we’re out of town, a policy we’ve mostly followed. Though doing so has shed light on another area of my life that could stand improving: preparation.
When we plan ahead, preparing our lunches and prepping veggies for dinner at the start of the week, eating in is a breeze. (It helps that my partner is a fantastic cook, so I’m more than happy to stay on plan when he’s doing the meal prepping.) But if there’s not a ready-to-go meal in the fridge and I’m hungry, stressed, and on deadline, my instinct is to order takeout. The new rule has forced me to plan ahead and organize my time better to avoid a crunch at the end of the day.
We also implemented end-of-month check-ins where we discuss any non-essential purchases we’ve made. If one of us seems to have gone off the rails, we talk about why and how we can be more mindful of our spending in the future. I’ve also started making use of Amazon’s wish-list feature, where you can save items and purchase them later if you choose, so I don’t impulsively order a $180 compost bin or eight new books on minimalism.
These steps are helping, though I know I’ll still falter sometimes. In fact, I already did in early January, after an Instagram ad inspired me to order Glossier Boy Brow makeup wands for my sister and me. (It is fabulous if you haven’t tried it.) Although I regretted buying them instantly, I didn’t get down on myself. If there’s one thing I’ve learned about money management, it’s that going to extremes is not a long-term solution. Instead, I realized I needed to leave room in the budget for gifts and non-essential items so I can avoid both guilt and overspending.
Knowing I’m accountable to someone other than myself has helped stem my spending impulses. When I’m on the verge of buying something I don’t actually need, no matter how practical, I check in with my with partner and vice versa. We never tell one another what to do—the point is to support, not control. But we will gently push back and point out other financial priorities, or we’ll question why we need to spend this money now. Often, we’ll decide to add the items to a wish list until we’ve saved money specifically for those purchases or agree to sleep on it. If we do decide to buy later, it’s with a clearer mind and less risk of buyer’s remorse.
Rather than see 2016 as a failure of financial habits, I see it as progress. Was I perfect? No, far from it. But was I better than the year before? Absolutely. I’m confident I’ll be able to say the same at the end of 2017 as well—and that’s not such a bad place to be when you’re trying to outgrow a lifetime of financial mistakes.