I’ve been thinking more about finances since writing  this post and I even read a money book too.  I’ve been self-reflective about money since I’m on maternity leave and not making a real pay cheque.  I’m thinking back to how I was living when I was blissfully unaware of any existence other than having money dumped into my account every two weeks. Lately I’ve been thinking back to my history with money since I started working for the Man. 

I lived slightly beyond my means for a long long time.  There was always a balance on my credit card, sometimes a big one, sometimes less, but that interest just kept being piled on.  It was HoneyBunny, who’s much better with money than I am, who challenged me to get rid of it once and for all.  And I knew it made sense number-wise to not carry a balance but I didn’t realize how it would make me feel.   I liked buying stuff and I didn’t like the thought of  “depriving” myself of all the awesome things I “deserved” and figured that that justified the debt.

But you know how the skinny chicks say that “nothing tastes as good as skinny feels”?  Well the money version is that “nothing you can buy feels as good as debt-free feels”.  It was like a load came off my shoulders I didn’t even know I was carrying.  I hadn’t realized that credit card debt was one more thing to feel responsible for.  It was something that needed to be done,  and feel a little bad about.  But I paid it off and the tension was just gone. 

And I saw clearly all those times I bought something and thought it was amazing and then by the time the credit card bill came in and I didn’t have the money to cover the purchase I wondered why I bought it at all because I didn’t think it was so amazing anymore.  And felt lousy because I couldn’t pay my bills.  I was the queen of consumer and debt remorse. 

So after being debt-free for a while I realized that I got a perverse pleasure in *never* giving the credit card company money for interest.  Sure, they still got their annual fee, and it’s a good one because I collect travel points, but never any money for interest.  Take that Royal Bank!

The biggest change I made was putting a stop to impulse purchases.  I worked across the street from a mall at the time and I’d go there when I had time to kill or just needed to wander at lunch.  It’s funny how the simplest money strategy is to find something else to do than shop.  Because  I would inevitably find things I’d want and I’d get excited.  The case of the gimme’s would be overpowering and I couldn’t whip my credit card out fast enough.  So I stopped. 

I decided that even if it meant taking a special trip back to a store the next day I would put 24 hour mental hold on whatever I was yearning for.  And I discovered that most of the time  the next day rolled around and I didn’t even remember that gotta-have-it potential purchase.  It couldn’t have been that great right? That one strategy saved me so much money and also kept my closet from over-flowing. 

But I’ve realized that since becoming debt-free I plateaued and stopped trying to improve my financial situation even more.

The money book I read was one by Dave Ramsey and he features people in the book who have a household income of  say,$45,000 who pay off mountains of debt, some of them twice their income.  I was reading and wondering how they do that.  Well, in small increments over a long period of time with incredible focus and persistence, that’s probably how.   *So* impressive.

He lays out his suggestions for financial wellbeing, paying off debt, building the security fund of 3-6 months of expenses because life happens, the college fund for the kids, the insurance, not necessarily in that order.  And HB and I are generally good on all that stuff, we pretend to be responsible.  The security fund is gone right now  because I’m on maternity leave but it’s been put to good use and we’ll build it up again when I get back to work.  Having a security fund is another thing that makes me feel really good. 

So Ramsey’s next step after all that is paying off the mortgage and then the step after that is having buckets of money around that you can give away and have fun with yourself.  That sounds like a place I want to get too.  But I realize I’ve gotten stuck about the mortgage.  I have been ok with frittering away small amounts of money because as long as I have it and I’m debt-free and have money in the bank, why not.  I “deserve it”. 

In other words I’m right back to justifying my purchases the way I did when I had credit card debt.  But come on,  if I know how good being debt-free feels I can only imagine how good being mortgage-free would feel.  Like 10 times better or something right?  Can you imagine actually owning your whole house and saying “nyah nyah nyah” to your bank?  Wow.  Financial Nirvana.

But the trap I get stuck in is thinking that the mortgage is too big.  I mean, it’s not big for a city mortgage, but it’s a good chunk of money.  So I figure, why bother.  Buy a t-shirt instead, it woudn’t make any difference anyways.  But logically I know that any amount of money I put on the mortgage goes right on the premium which means the bank can *never* charge me interest on it ever again.  It’s another chunk of my house I own.  Sure, a small chunk, but better mine than theirs.  Regular mortgage payments are always a mix of premium and interest, quite a bit more interest for the first decade or so.  Have you looked at those charts of how it breaks down?  They’re very good for the bank, not so much for us.  So putting extra money on, no matter how small is really powerful.

So I ask myself, why is paying my mortgage any different than what the amazing people in Ramsey’s book do who doggedly pay down huge debt over years?  I’ve been operating on the belief that debt is bad but mortgages are a fact of life, so who cares.  I guess I want to start to care.  It’s my new goal.  I read somewhere that 95% of people never put extra money down during the life of their mortgage.  So it seems I’m not the only one who has seen their mortgage as something they live with – forever.  But I want to change that.  So that one day - it won’t be soon and that’s ok - I can experience financial nirvana.