3 Ways I Sabotaged My Financial Progress
When I really buckled down to focus on the state of my finances, there was much room for improvement. As I gradually made baby steps when it came to budgeting, I had some blind spots. Looking back, I notice 3 clear ways I wasn’t really progressing as much as I wanted because of purchases driven by impulse instead of mindful spending.
The First Way I Sabotaged My Financial Progress: Rewarding myself with material stuff
The Good: I set up a budget and committed to following it
The No-So-Good: I saw coming under budget as a green light to spend money on things I didn’t necessarily need
For many people, building small rewards and treats can help celebrate milestones along the path to reaching lofty goals. It’s difficult for many of us to delay gratification for months or even years, so sometimes it’s nice to recognize the steps we’ve already taken toward achieving our goals.
However, when I came in under budget during my first month of monitoring my spending, treating myself with new clothes proved to be completely counterproductive. I finished about $100 under budget in my first month, so immediately I online shopped for clothes I thought I needed. And Old Navy had a super sale that weekend (When are they not having a super sale?) so I saw it as a license to spend money on clothes I didn’t need that were of poorer quality.
About one year after that initial “shopping spree” I’ve donated more than 75% of the stuff I bought with that “way to go me!” shopping trip (not to mention dealing with the guilt and shame of wasting money).
I’m not saying that we shouldn’t celebrate progress, but choosing small experiences and outlets that bring us joy can be a better way to motivate ourselves. Now when I finish under budget I invest that money (and watch it grow in my Robinhood account!) or if our joint spending is under budget, my fiancé and I might treat ourselves to a bottle or wine or put the money in our wedding or vacation savings accounts.
The Second Way I Sabotaged My Financial Progress: Trying to build a Capsule Wardrobe without adequate planning
The Good: I streamlined my closet and got rid of clothes I didn’t love
The No-So-Good: I spent way too much money trying to curate my “perfect” spring wardrobe
This lesson is directly connected with the first.
After my failed Old Navy shopping spree, I didn’t feel great about getting rid of most of the things I spent my money on. I tried to overcorrect by jumping headfirst into capsule wardrobes.
Capsule Wardrobes are a fantastic idea. The basic premise is that you have fewer items in your closet that you love, fit well, and match most everything else. There are plenty of versions of capsule wardrobes and the Project 333 from Courtney Carver is a wonderful challenge for your wardrobe.
I bought into the capsule wardrobe idea hard and felt like I needed to overhaul everything instead of starting with what I already had. I went to the outlets (You know, so I could feel better about getting clothing cheaper 🙄) and bought about $300 worth of things. I went armed with a list and loved the things I bought, but I didn’t need to go overboard when I was just started out.
I ended up imposing a flexible clothes-buying ban after this outlet bender. This month marks about one year since and I haven’t bought more than a handful of items of clothing — this includes resisting during vacations, back-to-school shopping, and the release of new fall and winter clothing lines. If you want to read more about clothes buying bans, Angela from Tread Lightly, Retire Early has some great reflections.
The Third Way I Sabotaged My Financial Progress: Thinking buying in bulk is always better
The Good: I wanted to cut down on food costs
The No-So-Good: I have zero self control at Costco
Spending on food is usually one of the largest items in a family’s budget (after housing and transportation), so naturally I looked for ways to decrease my spending on groceries and household stuff.
Costco seemed to hold the key for me. Dog food! Rotisserie Chickens! Toilet Paper! Oh my!
I walked into Costco for paper towels and immediately I was drawn to all of the other sales and specials. I had a moment where I was trying to juggle some dip, a huge block of cheese, and paper towels while reaching for a tub of mixed nuts. I stopped dead in my tracks. What the hell was I doing? I just needed paper towels and now I was looking at spending $40 on stuff we really didn’t need.
I cancelled my Costco membership immediately. Although I may not get the “bulk discount” anymore, I’m no longer spending money on large quantities of non-essentials.
Breaking bad habits – especially those of the impulse shopping variety – can be incredibly difficult. By being more mindful about our spending and potential blind spots, we can actively progress toward financial goals more quickly. Prioritizing our goals and being aware of opportunity costs is so important!