If you’re tackling a mound of debt like I am or just learning how to stick to a budget, it’s easy to get discouraged and feel as if you are paddling backward up a fast-moving stream.
However, taking a moment to appreciate small accomplishments along the way can be the encouragement you need to keep chugging along. A couple of weeks ago I was griping about my finances — my car loan isn’t shrinking is quickly as I’d like, our summer electric bill is too high, etc., etc. Yet, after a weeklong trip to visit family, when I sat down to balance my budget and pay bills, my negative attitude turned around.
I only kind of kept track of my financial activity during my vacation, but that night I noticed small signs of financial progress that I think reflect what I’ve learned about money and credit since graduating college. Sure, my student loan debt total is still overwhelming, and I often wish I could save more, but my trip expenses and other recent activities made me feel better about where I am and how I’m managing my finances — credit included.
It may not always feel like it, but I am making progress and maturing financially. Here’s why:
1. I only used debit to withdraw cash during my trip.
Like many millennials, I used to rely heavily on my debit card for expenses and felt more secure paying as I went, not having to “owe” anything. However, since becoming more aware of the extra fraud protections credit cards offer compared to debit cards, I’ve loosened my debit grip, especially last week.
I was really conscious about card security and being prepared for the worst on this trip as I had a jam-packed week traveling to many different places in many different environments. If something happened, such as card details being stolen, I probably wouldn’t have noticed right away.
So I put my airline and rental car on my travel rewards card and proceeded to only use my debit card to withdraw cash before a night out. I didn’t think anything of it at the time, but I was also actively draining my checking account from being drained by potential scammers.
2. I paid for experiences and memories during vacation, not things.
A younger me would have taken advantage of new shopping opportunities and buying things while traveling “just because I could,” but that’s not what happened last week. Instead, I spent my money on events such as a dinner out with friends, tickets to a musical with Mom and a state park day pass for a day outside with family.
An Aug. 20 CNBC report explained that consumer spending priorities have shifted since the Great Recession and people seem to realize that cheap goods don’t always hold the most value.
I totally get that. It feels really good knowing the money I spent while traveling produced invaluable memories.
3. When I buy things, I choose quality over quantity.
After noticing my vacation expenses, I reviewed all my purchases from August and July and found I’ve bought fewer material goods overall.
Instead of buying something cheap — say, a trendy item of clothing — just to have it, I’ve focused more on buying what I need and spending a little more on “better” items that won’t end up in the trash quite so quickly. This behavior definitely feels “adult” and reassures me that I’m being more thoughtful about where my money is going.
4. I’ve increased my student loan payments.
The week before vacation I raised the amount of my student loan auto-payment by $60, which will help me stay on top of interest charges and start seriously tackling the principal.
I’ve been repaying student loans for more than a year now and it’s been a slow process, especially after buying a car. However, this little step felt really good and reassured me that I’m in control of my debt instead of the other way around. I now want to increase payments again in a couple months instead of settling for smaller, more comfortable monthly payments and a longer repayment period. The latter may be easier, but it sure doesn’t feel as good as the former.
5. I no longer carry credit card balances.
As of Sunday, I’ve officially gone two months without carrying card balances over to the next month. I had finally paid off a balance of a few hundred dollars I’d been holding for a while, and then I paid off my vacation charges right when I got home. I did a little happy dance at the kitchen table when I saw all the $0 balances.
Plus, considering that the Federal Reserve Bank of New York’s second-quarter household debt report found consumer card debt has reached a 5-year high, my no-balance accomplishment feels like an even bigger win.
If you’ve been working hard to manage your finances better, take a closer look at your activities to date. You may feel stressed and maybe you’re not making the kind of progress you’d like, but little signs that you are heading in the right direction can give you hope. You may be more financially mature than you think.