Beware "miser mode"...

So sometimes after you have scaled back as far as you can go, you can get used to not spending money, and actually "forget" how to spend money wisely. My friend refers to this phenomenon as "miser mode."

Let's use an example:

You need a pair of dress pants for work. You think to yourself "I don't want to be spending my money on pants I have debt to pay!!" But you know you need them. You go to the store, and buy the cheapest pair you can find, and you think that you've done a pretty good job because you have spent as little as possible. Problem is, they don't wash well, they don't wear well, and the hems fall about 5 seconds after you put them on. So in about 2 months you not only look unprofessional, but you need another pair of pants. So you start the cycle over again. In retrospect, however, you should have bit the bullet the first time, spent a little extra and bought a good quality pair. After all of the replacement pairs you would need to buy (not including any tailoring you did along the way), you likely spent more in the long run going the "cheap" route.

Moral of the story: Being money saavy is not always about spending the least, it's about making wise decisions with your money. For items that you expect to need for an extended period of time, or use on a fairly regular basis (staple clothing items, everyday electronics, appliances, etc.) remember that cheaper is not always better. Take the timet o research your purchases, buy good quality items and you will likely be happier (and in some cases spend less) in the long run.

Stats-
Credit cards to pay - 3
"Extra" earned -$100

My first mistake....

So this whole debt repayment plan was not just come up with in August, I've actually been trying to make positive changes since the beginning of the year. August was really just my day of reckoning with the full extent of the damage.

Although I have been in and out debt over the years, I finally figured out one of main reasons for this- I'm working TOO HARD to pay off my debt. That's right, I've been too diligent! My major issue is that I have been putting every penny onto my debt, but forgetting that by paying off my debt with all of my extra funds I didn't have any left over for those extras and suprises.

So therefore I have now started a planned payment plan. I make sure that I put enough away for the major expenses every month so that by the time the actual payment comes around I will have the cash to pay for it. I think I might actually be able to pay for my house and car insurance without charging it.

Therefore, my new plan is to increase my debt (to be paid off in 3 years as indicated before) and try to make extra money instead of diverting the every dollar into debt payment. It may take a little longer, but hopefully it'll break the cycle once and for all.

Stats - No changes from last time.