Over the course of my career, I've been flush with cash and living paycheck to paycheck. I've paid off bills and I've racked up debt like any other good American. When I decided to change my life a few years ago, I was debt free and had a nice little nest egg, but I knew that if I was going to be happy it was going to take some debt. Now that I've completed my degree and found a good job with good compensation, I need to follow some rules:
1. You shall create a budget and have no other expenditures outside it.
I've always had the habit of setting up autotransfers to my savings account to "budget" in the past. If I ever over spent, there would always be this little fund to save my ass. I need to get things more under control and figure out where each dime is going.
Not that this means never having fun. I think a good budget allows for entertainment or luxury items within reason. There are several online budget planning sites and I plan to make use of one of them.
2. You shall not worship any new credit cards.
I do not like Suze Ormond, but she is right about this one. I have two, an American Express and a Visa (for the places who don't take Amex) and that is all I will ever have. I'm reluctant to even to a balance transfer at this point but will move if it's attractive enough (recent research say a big fat no).
3. You shall not take your new found earnings in vain.
I am going to make a pretty decent amount of money. Do I need to start living like I make a decent amount of money? I think that I keep a decent standard of living right now and I haven't had a paycheck in 3 months. I shop at Goodwill, clip coupons, watch for sales, and do not buy full retail price if I can help it. I will keep these habits. Besides, I love the high I get from finding designer items for 3.99 at the big G.
4. Remember the first of every Month, and keep it holy.
I need to remember to reassess every month, look ahead and schedule all bills to be paid, look back and make sure my behavior has held true to course.
5. Honor your retirement and emergency funds.
I will continue to do my automatic transfer to my savings, but I'm going to kick it up a notch. I am also going to reinstate my retirement account and do auto transfers into it as well.
6. Thou shall not kill your present credit cards.
I really don't have extra credit cards to kill, but some people have all the store ones and others from low interest transfers in the past. All the advice I've heard in the past is that cancelling these may actually hurt your FICO score. As always, there is balance to be sought with these things, and Motley Fool has some good advice.
7. Thou shall commit to buying within your means.
Just because I have some extra dough doesn't mean that I can go crazy. I don't need a new car, I don't need a huge mortgage. I don't even need those new boots, dammit.
8. Thou shall try not to buy retail price.
Seriously, with a little work and a good internet connection, I haven't paid full price for anything in years. It just requires patience (You don't need it RIGHT NOW) and planning skills. I clip coupons for things like my fancy face creams and wait for sales where they sell them buy one get one free (usually every six months). What normally costs 19.99 per jar (it's the Loreal stuff) I get for $10 bucks each, then anywhere from 2 to 5 more dollars off each jar.
9. Thou shall not lie to yourself about your situation.
Its easy to become deluded about money. I'm really good about going out to eat to forget my problems and charging the meal (drinks) to my card. It's a tiny habit, but a dangerous one that can add up to $1200 bucks a year. Commandments 1, 4, and 7 should help here.
10. Thou shall not covet your neighbor's house, your neighbor's new smart phone, your neighbor's new Prius, your neighbor's new boots.....you get the idea.
Again, my paid off car is good enough right now. It's not enviornmentally friendly but neither is trading it in to get whatever currently hot hybrid is available and I can afford it. I do not need a new phone and if I do decide to get one, I do not need to get it at the local store, I can get it online. I do not need to have those cute wellies I saw on the girl that frequents London that I probably could find online, but will still cost more than it would for a car payment. Again, you get the idea.
Will this help me out of the debt I'm in (not much, mostly student loans), plan for the future, while allowing for life to still be pleasurable? I think so.
But only time will tell.