I will be the first to say that until 6 months ago, I hated budgets. They were useless to me. If I set a clothing budget of $200 per month, and I found something I really liked that pushed me over the budget, I’m not going to deprive myself of that. I deserve it, right? I went to college, got a degree, got a great job, I deserve to spend money on the things I want, right? Or do I? I still have student loan debt; I still have credit card debt; Do I really deserve to spend money on anything other than the roof over my head and some very basic food to keep myself living? THIS is the internal struggle that I dealt with for so long, and still feel sometimes today. BUT, creating a budget has not only helped me pay off my debt faster than I ever have before, it has made me feel even less guilty for spending money where I choose to spend it.
WHY I STARTED A BUDGET
I’m not kidding when I said I was so anti-budget until 6 months ago. I had gone through the motions 100 times – write down expenses, write down income, figure out the difference and that’s how much can be put toward debt. Okay, now where can we cut expenses to increase that number?
But I never stuck to it.
Friends would ask me to go out to dinner. Sure! I’d think about a big trip (ahem, Italy). Of course! I NEVER stuck to the budget and then I’d feel even more guilty and this cloud of guilt is something very hard to walk around with every day.
I have been seeing a therapist for some time (probably about a year) and one Thursday evening, he asked what my personal goals are at the moment and I said “get to a point where I’m comfortable with my physical appearance” and “pay off my debt.” “Debt?” He asked. “You’ve never talked about debt.” “Well yeah, it’s always been there, I just haven’t been able to pay it off.” So we spent the rest of the session talking about it and it turns out, it’s a bigger burden on me than I thought it was. It’s always (for 7-8 years) been a part of me, but it’s a part that I detest. It’s a constant reminder that I don’t have self control and physical possessions are more important than my peace of mind.
“Have you ever made a budget?” My therapist asked. “Yeah, yeah,” I said, “I’ve made a ton of budgets, I just don’t stick to them. If I want something, I’m going to buy it.” “Okay,” he added, “and how long after you buy something does that ‘high’ wear off and you start to feel guilty?” “Well probably a couple hours or until I get home.”
He then asked me to think about budgets in a different sense. He explained that when you make a realistic budget and include an adequate amount of money to go toward debt, it frees you from that guilt.
If you set aside $200 per month to eat out at restaurants, when you actually are eating, your thoughts go from “I shouldn’t be spending this money” to “I put aside this money for specifically this reason, this is okay.”
And that guilt subsides. This isn’t just true with eating out, it works with spending money on anything – clothing, entertainment, travel, nail appointments, etc.
HOW I SAW MY MINDSET CHANGING
This was NOT a huge breakthrough right away for me, but my therapist said we’d continue to talk about the budget every other week for at least 5 minutes to make sure I was on track and nothing happened to throw me completely off. THIS accountability is what made me really go for it. The people-pleaser that I am at my core really didn’t want to be embarrassed by not sticking to it.
So, I downloaded Mint (one of the most popular budgeting apps out there) for the 101st time and set a budget. I decided to go broad with my budget categories which was ultimately the best decision for me. By that, I mean, I have a “shopping” budget as opposed a budget for clothes, and a separate budget for hair products, and a separate budget for random Amazon purchases, etc. – you get the point. Going broad made it easier for me to be a little more flexible with myself.
Mint actually makes it really easy to see every transaction you ever make which can be an EYE OPENER! The first month I was using this, I spent $700 out at restaurants. SEVEN HUNDRED DOLLARS. What the hell was I eating – gold?!
Anyway, I set up these budgets and then tracked my spending every other day. If you haven’t used Mint, they break your transactions into categories or budgets for you – or at least they try to. Most of the time they need some tweaking, so I’ll make sure I catch those transactions as soon as possible and make sure they go into the appropriate budget.
Then, if my restaurant budget is met, I don’t go out to eat for the rest of the month. Simple as that. If my shopping budget is gone by the 4th, I don’t buy anything for at least 26 days. It’s somewhat relieving knowing that there will come a day in less than a month where I can eat out or shop again, just not right now. And this has made a HUGE impact on my life in two ways:
- I already mentioned this, but knowing that I set aside money to do that specific activity or to buy that specific item, I no longer feel guilt about doing so. This is the single best feeling after having this guilt on my shoulders for so long.
- It’s forced me to forget about instant gratification. If I want something and it’s not in the budget, I don’t get it. I have to wait a week sometimes or two or three and by then, sometimes I don’t even want the thing anymore. And sometimes it feels that much better to have it. Almost like I earned it by waiting.
I want to talk about that point part for a minute. I did a survey on Instagram a week or so ago and I asked my followers what their biggest issue is with money and an overwhelming number of you said it was impulse purchases. This actually blew me away. I thought the most popular answer would be debt or sticking to budgets (which I guess goes hand in hand with impulse buying), but having a budget and sticking to it has had a profound impact on keeping me from impulse buying.
This is because you use your budget as a “VALUE.” I’ll explain this.
I’m a firm believer that a person should have a set of values that they live their life based off or that they use to make nearly every decision that comes their way. This can be anything from love to honesty to a healthy life style – anything. Your core values will likely change over time, but you should always have them and always do some self-auditing to figure out what those are or how they might have changed.
Have you ever been presented with a choice and you just couldn’t decide? You ask friends and family what they think and they all give you conflicting opinions? It might take you days or weeks or months to decide, and then when you finally do, you wonder if you made the right choice? Values can help with this. I used to feel this all the time and I just thought I was indecisive – turns out I didn’t have any foundational values to base these decisions on.
Now I think you hopefully understand what values are and I have several, but one of them is financial responsibility – or my budget. So now, when someone asks if I want to go out to eat, I don’t sit there and say “well, it would be nice to not have to cook, but I’ll probably end up over eating, but it’ll taste really good, but I’ll spend money.”
I look at the budget. If there’s room for it, sure! If not, maybe next time. Or maybe we go do something else to spend time together.
The same thing goes for things I want at the store. I’m no longer tempted (well, I’m tempted, but I don’t follow through) to impulse buy because I know I want to save my shopping budget for things I actually want. Not random items I’ll probably never use.
This is a funny story that happened literally two days ago: I was invited to an event by a magazine called Blogosphere in Central London (OKAY, sure). I completely wrote it off at first because I’m in Houston, TX and this event is in London. BUT, then i thought, I could make a long weekend out of it. I’ve never been to London and I could invite my blogger friend, Laurel and we would have SO much fun. To top it off, we found round trip flights for – and you’re not going to believe this – $350. I almost immediately started booking flights, but then I took a step back and thought about the entire trip – flights, hotels, food, entertainment – and it would probably be at least $1000 all in. This was too much for me right now. I’m going to Poland in December, this just isn’t the right time. I remembered my VALUE of FINANCIAL RESPONSIBILITY and used that to make my end decision. I’m just hoping flights will be that cheap in the future and Laurel and I can frolic through London together then.
MY ADVICE TO YOU
If you are like me and you’ve made a budget countless times, but can’t stick to it. Or you’ve never made a budget and have no idea where your money goes every month. Do me a favor and try Mint! Just try it for a month! I’m not sponsored by them and I don’t get commission or anything, I just firmly believe that their product can help when it comes to money management. So much so that I created a guide on how to set up and use it effectively.
The guide includes the exact step-by-step process I recommend using to setup your Mint account for optimal success. It also includes tips and tricks about how to use it going forward to get the most out of it. Lastly, I included a side bar with facts about Mint that you might be wondering – like how they keep their users’ info secure, how they actually make money as a company, and more.
The least that can happen is you use it for a month and then you’re able to see where your money goes and have an informed outlook on your finances. Even if you never use the budget features, knowing is the first step to making a change.
I hope this was helpful! It’s something I’m quite passionate about at the moment because it’s helped me in such a tremendous way. Please let me know if you have any questions or comments on Mint, the guide you’ll receive by email, or anything else!
Until next time,