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WCI Financial Bootcamp: The Spending Plan

Last year around this time, I began to notice that the principal on my student loan was finally diminishing.  We were on our way to paying off $100,000 of student loans in 6 months. After years of making payments that only paid interest to my lender, I was dumbfounded that I could actually make a difference to the principal of my loans.  

A year later, I am looking forward to making the last payment on my loan THIS MONTH!

Next week, we will have paid off $208,918.53 in student loans in just 17 months!!

The Spending Plan, a.k.a. A Budget

How did we get rid of my student loans in less than a year and a half?  Well I can’t wait to write that post next week. But, I’ll give you a sneak peak: It had a lot to do with making a spending plan… aka a budget.

I know I’m about to lose you, but stay for a second.  A budget doesn’t mean you have to give up everything you love.  It just means you spend on what you love and stop spending on stuff you don’t care about.  More than that though, it is just the process of being aware of where your money is going.

In the Financial Boot Camp, Dr. Dahle lists a budget as Step 3, after obtaining life and disability insurance.  It’s that important to your success. “A spending plan is simply a prior decision to spend consciously.” That’s it.

If you are reading along, you’ll find my story in this chapter on page 56 (along with my full name… who’s going sleuthing?).  When you start paying attention to your budget, you’ll quickly realize cutting back your large, fixed expenses will give you the most bang for your frugal buck.  That’s why my family downsized. $1000 saved every month can make a huge difference in your yearly goals.

Budgeting is like Dieting

I compare budgeting to dieting.  When I was a freshman in college, I gained a ton of weight… UGA’s award winning dining facilities were my downfall… Go Dawgs.  So, I joined weight watchers and they assigned each food a point value. Foods like vegetables, that were full of nutrients but not much fat, were given a point of 0.  I could have as much of them as I wanted. Foods like desserts were high in points. I had to make my choices because there were a limited number of points in a day.  Sure, I could have dessert, but then I would have to cut back on the points in a different meal.  

Once I went through the meticulous part of counting points for a couple of months and learning what was good and bad, the system became second nature.  I lost the weight and kept it off because the principles weight Watchers taught me stayed with me.  Every once in a while, I put on a little weight and have to re-calibrate- maybe I exercise more or make better eating choices.  But, I know what to do because of that initial painful period learning how to choose foods and balance out my intake.

Budgeting is much like that.  Initially, making a budget is simply learning what is “good spending” and “bad spending” based on your goals.  Once you cut out the fat (lower fixed monthly costs and optimize your budget), you can be less strict and still make progress.  

WCI wrote this piece on budgeting: Budgets are for Rookies.  He doesn’t use a budget to cut back the calories.  But if you notice in the article, WCI has a spreadsheet of where every dime of his money went for the last 16 years.  Jim had good financial habits to start with so he didn’t have to do much dieting, but he did track his spending and made sure his spending didn’t become frivolous.

The Purpose of a Budget

Not all of us were born with good money sense… I’ll be the first one to admit I wasn’t!  For me, the “The Frugal Physician” was an aspirational title. I was spendy AF!  But there’s still hope.  Sometimes, we have to teach ourselves things that don’t come naturally.  

Sometimes we gain a little extra padding along the sides and have to count calories to get back on track.  But don’t get down on yourself… even the supermodels do it!  Dieting doesn’t make a supermodel any less super.  Once we are pro budgeters, spending well will be second nature.  Then, all we will have to do is maintain and strut to the the finish line!

Standard Disclaimer: Not meant as individualized financial advice.  Images from           

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