01/22/2018
Spending: The Good, The Bad & The Fugly
Need, want. Such a fine line. So, let’s talk about how we provide for what we (actually) need and make a plan to get what we want. I am a self-proclaimed shopaholic. I love spending “fun money”- whether it be treating myself to a facial and pedicure, buying clothes (I definitely don’t need) or a trendy Sunday brunch with friends-these splurges make me happy (at least in the moment). I know when I do and don’t have this fun money based on a carefully kept budget.
So here is the tale of how my budgeting began. I received my very first paycheck at my “real” job. I looked at what came out for taxes, benefits and my 401k and was sticker shocked. My salary instantly was reduced by 30%. I had already spent that paycheck in my head before the direct deposit hit and I was frantically running numbers to figure out how I would still pay for all the things I wanted. I had zero plan in place to pay by bills- nor any real idea what said bills would amount to.
After a small (medium) bout of feeling unnecessarily sorry for myself I decided to write a budget. I busted out a notebook and gel pens (yes, I still use those) and started by writing down the needs I could think of. I left out about half of my bills and went through at least ten pieces of paper, which I angrily crumpled up and threw on the floor as I went.
Eventually I had a (very basic) budget. I had set aside vague values for my bills and even figured out how much “fun money” I had left over per week. This number was much lower than I hoped. When I did go shopping it was major bargain hunting at Ross, and if I went out for dinner it was during the week and either incredibly early (happy hour) or very late (reverse happy hour). But I felt in control of my expenses and made some room for small indulgences.
Overtime my budget became more and more advanced. Setting aside money for an emergency fund, medical bills, savings and fluctuating for times when my expenses would increase (the holidays, tax season, etc.). I even keep my budget in an excel spreadsheet these days!
If you look at your budget and think “my god I can’t afford all this”, before you shave your head Les Mis style, start checking off the things you don’t need (I promise you can find some.) Put a star next to what you don’t truly need- cable is a major one and a food budget is easy to reduce. If you think there is nowhere to cut corners keep a money journal for a week. Every time you spend a single dime whether it be on a latte or gas, write it down, carry this journal with you everywhere. After a week you will find places you are spending money you never thought of.
If you still can’t make it work call your credit card companies and ask if they will offer you lower payments temporarily, you can put your student loans on hold (due to hardship), call the utility companies and explain your situation, see if your landlord will negotiate. This is humbling but necessary. I have had to do all of above. If all else fails consider taking on extra work- drive for Uber, join Task Rabbit, find a place to work part time. If you feel comfortable borrowing money from family or friends do so. I have personally avoided this as I have seen money destroy personal relationships. Try as hard as you can to avoid accruing debt during a tough time.
I look back at the times I had to scrape by. I used a Coinstar at the grocery store and then used that money for gas and groceries. I have set up many a payment plan. I have missed out on tons of experiences because I simply couldn’t afford to go. My advice during these hard times is stay committed, stay hopeful and be grateful for even the smallest of things. During my worst days I reminded myself that I was lucky to have a job, to pay rent (it meant I had a place to live), I even started to appreciate taking a hot shower and drinking clean water. I still remind myself of these things when I feel like life has given me a “bad hand.”
Any financial struggle you undergo, whether it be big or small will make you more capable, thankful and generous. When you learn to get by with very little you never lose the ability to keep striving and surviving. When times get easier you are grateful for every added “luxury”, even if it’s something as small as filling up your entire tank of gas or not checking the price of cheese (I really love cheese). When you are in a better place financially you will want to make those tough times you experienced a little easier for others- even if it means paying for a friend’s dinner.
So ladies, let’s face this big, bad budget of ours. You’ve got this! And if you need help, I’ve added a simple budget that is a good place to start.
Basic B*tch Budget*
*I don’t think any of us are actually basic
I start with my after tax, benefits, etc. aka what I actually take home monthly income. For those of you who do not automatically have taxes, insurance, retirement deducted but still pay for those things make sure they are in your budget.
Rent (Make sure to include taxes, if you don’t know if they are included in your rent ask)/Mortgage (don’t forget homeowner’s association fees if your neighborhood has these)
Utilities (Gas, Electric, Water (normally this includes trash pickup, but double check), Cable, Internet, Phone, Home Security), I suggest you consider if these costs fluctuate- higher electric bills during the summer or winter depending on where you live.
Insurance (Health Insurance (unless it comes right out of your paycheck; this should include prescription, vision and dental coverage), Renters or Homeowner’s Insurance, Auto Insurance, Life Insurance, Disability Insurance, Jewelry Insurance- anything you pay monthly to protect yourself, the things you own or your future
Auto/Transportation (Monthly payments toward your car if you don’t own it outright-whether you lease or are paying toward an auto loan. Cost of parking. Any costs of public transportation-bus, subway, ferry, etc.)
Student Loans (Any and all private and public student loans)
Credit Cards (I typically start with the minimum payment when starting a budget, make sure you include any credit cards- yes even that Victoria’s Secret Angel Card you opened on a whim)
401K/Savings (Whatever you are putting away toward retirement (unless it comes right out of your paycheck), anything you plan to set aside to save be it for an emergency or for your future)
Taxes (Whether you are paying off income taxes or are responsible for putting aside money as your employer doesn’t take taxes out, you are paid in cash, etc. Property taxes fall in this bucket too)
Necessities (This is for groceries (don’t forget pet food), gas, medication, household items (what you actually NEED to buy at target) and personal items (think tampons not the Naked Heat Pallet)
Child/Pet Care (Day care, a nanny, a dog walker- whatever allows your child/children or furbaby to be taken care of while you work)
The above are what I consider to be “must pays” that will keep us taken care of in the present and still planning for the future. Now onto the fun/flexible money.
Home Maintenance (This falls somewhere between necessary and frivolous- if your AC breaks you need to fix it but I normally fund an ER account for this. However, a lot of people have other bills they pay toward their home- think a cleaning lady, a landscaper, pool cleaning service, pest control)
Entertainment (Eating out/take out/ delivery, overpriced cocktails, tickets to a concert, going to the movies, hosting parties, Ubers, non-work travel- whatever (legally) entertains you)
Shopping (Clothes, shoes, makeup, throw pillows, fresh flowers, the 50 items you buy from the dollar section at Target-if you walk into a store or go online to buy it and it doesn’t feed you or allow your home to operate (a scented candle doesn’t count) then it goes here)
Beauty (Sounds ridiculous but let’s face it- for a lot of us this is part of our budget- manis, pedis, waxing, hair-cuts, highlights, facials, massages, spray tans - whether it’s a $12 eyebrow wax or a $9,000 butt implant you pay off monthly)
Subscriptions/ Memberships (The Gym/Fitness classes, Netflix, Hulu, Spotify, Amazon prime, any apps, magazines (not sure if that’s still a thing), Hello Fresh, subscription boxes (my personal weakness-I might subscribe to 5ish), associations you belong to)
I am likely missing some (a lot of) things especially when it comes to the fun stuff, as everyone is different. If you are unsure just keep every bill and receipt for a month and then review. This fun section is also the first place I go when I am looking to make cost reductions. This is where you really get to decide what is worth it to you and what is not. For me paying for someone to clean my home is the ultimate luxury. A monthly massage is one of my methods of self-care. Whatever is fun for you- plan for it here. If you are afraid you will go over budget when it comes to the fun stuff then make sure you always pay for the “must haves” first and take out cash for all the fun.
Cheers to becoming a basic budgeting b*tch!
