Say What?

fullsizerender-2

I think the next logical place to go on this blog is to spend a little time pondering the greatly feared monthly budget. In this here house we have experimented with various forms of this over the years, but mostly in non-commital ways that still allow our profligate spending ;).  No matter who you are, YOU absolutely need a budget, and you need it right now.

I have found that there are only two ways we actually end up adhering to a budget. One is we pay ourselves first–we have an automatic deduction to a savings account on every pay day, so we never see the money to begin with (we have had to temporarily stop this since our move this summer given the huge increase in rent we are paying, but are planning on starting this again as soon as I get a raise again in July). We also contribute 9% of my income to my retirement account, and are contributing to a lesser degree to an HSA account (which is a super awesome entity we need to talk about later!). Obviously deciding how much you are going to put straight into a savings account can be hard, and this is where our second successful strategy comes into play–some (fairly) painless number crunching.

We sat down a year ago and committed to looking at where our money was going at the end of every month. We got all our accounts loaded up on Mint, and will spend about 30 minutes at the end of the month going through and classifying every expense. I even have an alarm on our family google calendar reminding us both that it’s time, so I don’t have to feel the pressure or burden of broaching what can be a touchy subject. Doing this allowed us to see that we were spending $1100/month on groceries (much of which got thrown out) and $300-400/month on just coffee and snacks out. It provided us with some pretty low hanging fruit to go after when it came to painless cost cutting.

However sometimes knowledge does not equal power. Just knowing we are overspending does not always change our habits. We’ve found that sometimes the only way to actually keep us at our goal of money spent out on coffee or groceries or eating out, for example, is to actually take that amount out in cash for a two week period, and then when it’s gone, it’s gone. We’ve done that at various points throughout our life, and it’s a ruthless (but easy) way to keep yourself limited.

I know there are a billion different ways to budget, including YNAB, Personal Capital, Mint, and good old excel. I’d love to hear if you have a budget, and how you’ve approached managing your monthly finances. What are the areas in your life where you feel like you either spend too much, or just are clueless about how much you’re actually spending?  I’d also love to hear from those who feel too intimidated by the idea of a budget, and what I can do to empower you to just get going!

P.S. The photo has nothing to do with this post, except it reminds me of how much finance talk the esquire and I had when she was visiting last weekend.

P.P.S. I also wanted to point out that I am trying very hard to always link to articles written by WOMEN — not that guys don’t have a great perspective or great information, I just really want this space to provide examples of women talking, thinking, and making decisions about their finances.

Advertisements

Author: Diana Boss

I am a resident physician in dermatology, living with my husband and our two little ones in the southern USA.

7 thoughts on “Say What?”

  1. I’m right there with you Ashley! Step 1) figure out where you are currently spending your money. Step 2) decide where you would like that money to be going.

    When we did this we were also shocked to realize that we ATE all our money. Making a grocery list/food plan for the week made a HUGE difference. It has also helped to use our cell phone’s calculator at the grocery store and then make decisions to put items back on the shelf (almost always junk food).

    Our budget was the cause of the biggest fights in our marriage. We also have “failed” a lot at budgeting because some months we would get so off track we would just quit. That would turn into not doing a budget for 5 months. We have cycled though that many times over the years. What changed? We learned that doing a budget doesn’t mean we can’t spend money (we are very adventurous, spontaneous, impulsive people) it just means we plan ahead. For example, we have a category for “Fun” money. It also worked to give my husband $50 cash for the month so he felt more freedom. At first it felt like a budget was restrictive and we would have less money to spend, but actually because we are making better choices it feels like we have more money. Another thing we learned is not to beat ourselves up for going over budget in one area otherwise budgeting can start to feel icky. Keep it in perspective. If we went over in one item, we would try being under in another so that for the month we were on track. Honestly speaking, we are rarely under budget for the month, so we celebrate if we only went over $100 instead of $300 like last month. We are still a work in progress too!

    Like

    1. Thanks for this humble comment, April. I feel like discussing finances is sometimes avoided because it’s easy to feel ashamed about having made poor financial choices, or because you “failed” your budget, or whatever. I find it so freeing to be honest about this stuff, and hear from others about their experiences, because it really normalizes the challenges and setbacks that surely all young people (unless born into wealth) must face. I also love what you said about the fact that having a budget doesn’t mean you can’t spend money. I feel like one of the important aspects of who WE are, too, is being spontaneous, and knowing that there IS wiggle room helps the budget feel like an ally rather than a foe. I can’t wait to talk more about finances and relationships, too–I’m sure you guys will have some extremely useful insight!! XOXOX.

      Like

  2. The timing of this post is perfect, since it forces me to face the fact that I’ve been spending way too much money recently on food items that I don’t need. Ooops. My favorite way to keep track of my money is with the Mint app you talked about. I like how simple it is! It basically does all the work for you with automatic updates and the breakdown of spending categories for the month. I had to get really good at grocery budgeting over the past years because paying rent used most of my money from working part-time, so I used to spend 20-30 per week on groceries, but that was also when I really didn’t have another option. Since I’m not paying rent this semester and actually have (if I can pretend to have money while in debt) money that I can spend or save, it’s time to start getting more serious with my budget. I’ve also felt like I had more freedom to spend money on things like presents and books, which I don’t regret 🙂 Speaking of which, my Finance for Dummies books came in the mail, and I am going to be calling you to tell you all about the things I’m learning!!

    Like

    1. I’m SO happy to hear you’ve felt freedom to spend money on presents and books, and don’t regret this! One of my concerns about this blog is that it might make readers feel more angst and pressure surrounding money, and like the only thing that matters is saving money or increasing wealth or whatever. Not true! What matters is that our money goes where WE say it goes, and is not just disappearing as a matter of mindless consumption or lack of planning. Ya know, as in ‘ People don’t plan to fail, they fail to plan’ etc. Plus, and I might repeat myself over and over, I am actively eschewing the idea that accumulating money provides an enduring source of joy. In fact, it can be quite the opposite, nobody said it truer than Biggie Smalls, “Mo’ money, mo’ problems.” Love you!

      Like

  3. I spent all day going through my bank statements and making a spread sheet of my spending over the past 10 months. I am very distressed at what I have found. I am a very bad manager of my money. I have so many frivolous expenses. I hate to think of what my debt would look like had I learned how to budget and spend wisely. Oh well. I guess I have learned my lesson and move forward with making budget and sticking to it. I’ll let you know how it goes, once I figure out what my budget should even look like. I attached a link to the spreadsheet of my spending, just in case anyone wants to look and marvel. Thanks for the info everyone. I love hearing about your struggles, strategies, and triumphs. I also love that this blog is directed at women. ❤ file:///Users/AbigailLundgren/Desktop/Screen%20Shot%202016-10-15%20at%207.00.06%20PM.png

    Like

    1. This is an edit of the comment above. Please read this instead. Haha.

      I spent all day (hahahah, I just realized this is punny) going through my bank statements and making a spread sheet of my spending over the past 10 months. I am shocked to find that I am even worse at managing my money than I had previously thought. I have so many frivolous expenses. I hate to think of what my debt would look like had I learned how to budget and spend wisely before going to college. Oh well. I guess I have learned my lesson and can now move forward with making a budget and sticking to it. I’ll let you know how it goes, once I figure out what my budget should even look like. I attached a link to the spreadsheet of my spending, just in case anyone wants to look and marvel. Thanks for the info everyone. I love hearing about your struggles, strategies, and triumphs. I also love that this blog is directed at women.❤ file:///Users/AbigailLundgren/Desktop/Screen%20Shot%202016-10-15%20at%207.00.06%20PM.png

      Like

      1. I’m not able to see the snapshot of your spreadsheet for some reason. Would love to see it, though! And seriously, Abbs, you are in great shape. You are gonna have a great degree and got a study abroad experience out of it, all for very minimal debt. I will shut this blog down if I feel like it’s starting to just make everyone feel horrible and guilty for ever making bad choices with their money or guilty for having loans. If you ever need encouragement just go back and take a look at my NWS ;). Like April said above, we all go through cycles of being better and worse with our budget, and it’s good to be able to celebrate the victories while at the same time giving ourselves room for not being perfect. At the end of the day, MONEY is not what truly matters. Keep on keeping on sister.

        Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s