The Winner of the December 2015 Call to Action!

The Winner of the December 2015 Call to Action!

Woman smilingWe all know we're supposed to learn from our mistakes, not repeat them—but that doesn't always keep us from committing the same money mishaps over and over again.

Maybe you're still feeling the aftermath of a financial hangover after going over budget this holiday season. Or perhaps you need to pick up where you left off with the financial goals you set for yourself last year but didn't quite make good on.

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With 2016 here, it's time to start fresh—and what better place to begin than with problem areas that cropped up the last time you tried your hand at sticking to resolutions? That led us to pose our December Call to Action question: What money mistake did you make in 2015, and how are you learning from it to improve in 2016?

From the homeowner who used credit to foot her home renovation bills, to the woman who underestimated her medical expenses, the responses were both eye-opening and enlightening. Special thanks to those who shared!

And a huge congratulations to this month's Call to Action winner, who will receive $100 to help her towards her financial goals: Vivian Luu, a marketing strategist from Boston.

As Vivian transitioned from a journalism career into marketing, her lifestyle spending picked up—often at the expense of what should have been her emergency fund. It wasn't until a cross-country move from Seattle to Boston that she realized her finances needed fine-tuning.

Here's her story.

“I used to be a textbook stress-shopper, and that led to the demise of my emergency savings. I was a sucker for celebrating events big and small, from a new job (new clothes!) to getting engaged (new hair color!). I'm also a foodie, so I find it so hard to resist a delicious meal from a new restaurant.

When I moved to Boston, that became often a weekly occurrence. I would spend $40 per week at a fantastic, family-owned Thai food place around the corner from where I live—especially when I worked late and felt too tired to make dinner.

Another example of my superfluous spending: I once finished a stressful project and rewarded myself by buying a $350 designer jacket that I didn't need. Boston winter weather calls for parkas only!

I realized this was becoming a problem when I recognized I was using what was supposed to be my emergency fund to indulge in things that made me feel better temporarily at the expense—literally—of my future self. I felt unhappy about the money and life decisions I was making, and knew I needed to address these underlying problems to live the kind of life I wanted.

I turned to books for advice on how to move forward with my finances and eventually found my way to Marie Kondo's "The Life-Changing Magic of Tidying Up" and Gretchen Rubin's "Better than Before." I adopted a minimalist lifestyle by saying goodbye to non-essential, material belongings in favor of curated and memorable experiences. I adopted the 50/20/30 rule (essentials/goals/lifestyle) with my own adjustments and whittled my budget to essentials and a handful of budget-friendly perks that spark joy in my life (say, a monthly massage that I've purchased at a discount).

I also learned I can be a big-time abstainer, which led me to completely eliminate things I can't consume in moderation. This has helped me save tremendously. For example, I hardly shop for clothes anymore because I know I have everything I need.

For 2016, I'm aiming for a record of zero budget-breaker months and to double my savings rate to 50% of my salary. I'm also specifically aiming to plump up my emergency fund to a comfortable three months of take-home pay. I'll need to reduce my lifestyle spending from 30% to 15% of my income. I plan to do this by purchasing treats and experiences in advance from discount services, as well as reducing my problem areas like eating out and shopping by $10 to $20 per month. Working to save so aggressively isn't something I've done before, but I look forward to reaching my targets!”

Thanks for sharing, Vivian!

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