My Budget Story: Then and Now
To live, you gotta eat, to eat, you gotta work. To make my living, I am a contractor for about half of my time, and I am a part time employee at various locations the other half. Whether I am working as a contractor, or as an employee, I perform the same job and get paid a reasonably high hourly rate. I recognize my privilege in being able to have access to the volume of work that I do, and to make an above-average income.
With that, however, I have not always been fantastic with money (gulp)! When I began my career, most of my paycheck was spent at the bar with friends, or at the mall to buy outfits to wear and attempt to impress my friends at said bars. Over time, I stopped going to the bars, but instead would go to Target every paycheck and spend money on things I thought I needed, but most certainly did not. I would regularly overdraw my bank account, and my credit cards were maxed out at all times. It was a stressful way to live, and yet, I continued to live that way for about six years.
Making The Decision To Do Something Different
Inevitably, my spending caught up with me, and I couldn’t keep up any longer. Something had to give! Because I am an hourly employee, I was finding myself having to work more hours than I wanted to, just to keep buying things that I didn’t need, and I was approaching some serious burnout at work. The only way to cut down on the amount of work I “had” to take, was cut down on my spending. I am not sure exactly how or when the paradigm shift occurred, but I suspect, like anytime I have found myself re-examining my values, it was gradual. I remember having to slowly warm up to even toying with the idea in my brain before I allowed it to take root and become a part of who I am.
Strangely, deciding to rein in my spending was scary. At the time, I did not think of it in such terms, but spending was how I coped with difficult things in life. When I was bored, I went to Target, or ordered clothes online. When I was having a tough day, or needed a quick recharge, I found myself in the drive-thru line for a sugary Starbucks drink. When I was out with friends, I offered to pick up the check, because I didn’t know a way to do nice things for people without using money.
I suppose it ultimately came down to a desperate dissatisfaction with my hectic work schedule, and the realization that it would always be this way if I did not do something different with my money. Especially because I am an hourly employee, I would always have to work more, and give up precious hours of my life, to earn money to continue to live as I was. Then I’d be right back in the same position once I blew through my checking account. I mean literally folks, I didn’t have a dollar in retirement, or in my savings account. I was around 27 years old and didn’t know how to manage my money to be able to view my future with any security. And I was getting to the point where security was more valuable to me than it had been before (I am now in my mid-30s).
So I started to budget. I “gave every dollar a job” as EveryDollar recommends, though I had never heard of that philosophy at the time. I gave myself an allowance, and attempted to start putting money toward the debt that I had accrued. Meaning if I received a $1500 paycheck, I would list out what each dollar was allocated for, and try to follow the spending patterns I chose. It was shaky going at first, but I frantically wanted to determine my spending patterns, rather than let my spending patterns determine me.
I still follow this simple pattern of a zero-sum budget (budgeting my money until the ledger read $0) and it has served me well. I made sure to include regular bills, any debt, a personal allowance, any upcoming expenses I foresaw, and an amount to go toward savings. When a paycheck would hit my account, I would pay the assigned bills and transfer the earmarked money right away, the way I laid out in my budget. This prevented the temptation of not making that “extra” $25 payment toward my credit card next paycheck, and treating myself to dinner with a friend instead.
Slowly over time, I paid off my debt, started putting small amounts of my money into a savings account, learned to not immediately transfer the savings money right back into my checking account (ha! The joke was always on me), and have even been able to put away significant amounts per check toward my retirement. In order to align myself with my intention (of being more fiscally responsible), I had to curb the spending. So I found other ways to entertain myself while bored, or cheer myself up when things got tough. I found other ways to connect with my friends that did not revolve around money. When I was able to start chipping away at some of the debt I had amassed, I felt the results. I wasn’t so stressed about creditors, and I closed accounts that I knew would not serve me if left open (I’m looking at you, department store cards).
The peace is worth it, and there are many budgeting strategies out there that have helped people just like me (and perhaps you!) A quick Google search on “Budgeting Strategies”, “Getting Out of Debt”, or “How to Save More Money” will lead to a plethora of results. It seems like a boring concept, but I get excited about budgeting! It puts me in the driver’s seat of my finances, and allows me to call the shots. Where I previously felt out of control of my finances, my work-life balance, and my serenity, I now feel powerful and capable! All because of some discipline, and a budget that worked for me.