I’m a bit of a hypocrite. As much as I’d like to say that I’m good at sticking with a budget, I would be a fat liar if I did so. Quite the contrary, I suck at it. That’s partly why we’re in the red right now. The funny part about it is, I look at our balance about every other day or more. Does it help? Nope. And unfortunately it took me a couple years to realize why.
To understand this, please read the following conversation I would have in my head more often than I’d appreciate revealing:
“Wow, watching these bank accounts as they go down and the credit cards as they go up really gets me upset.”
“Sure does. Why don’t you ever do something about it?”
“Like what? What could I possibly do to change this trend?”
“Well, I dunno, but something… something drastic.”
“I’ve got it! I’ll not spend any more money, ever!”
“Hmm, that just might work! When are you going to start?”
“How about right now?? Ain’t no time like the present, I always say!”
“Yeah, let’s do it! I’m with you all the way! Who needs money these days, we have the internet!”
By the time the self-motivating schizophrenia is over I’m all ready to throw away the credit cards and live like a monk, thinking this is entirely possible with just my sheer willpower. I stay in this mode for about 6-12 hours, depending on when I get hungry enough and see the pile of dishes that I would need to clean in order to cook a meal. Typically this entire event is followed by a nice evening out at the dollar menu of any fast food joint.
And thus my foolproof plan is ruined.
Usually it takes me another month of racking up credit card payments before I follow the same principle over again: choking on my spenditure, swearing off money, and then celebrating with a burger. It’s a broken philosophy, and it’s a bit hard to get out of without some serious understanding of what works when it comes to these things. Thankfully I have snapped out of it. The conclusion of my soul-searching to answer the question of “how to budget effectively” is what I now place before you in four blog installments. This is not sure-fire by any means, but it works. Here’s today’s.
1. Realize you need to spend money.
It’s called survival, and it costs you a pretty penny most the time. One time Emily and I decided we were going to not spend any money for a whole month and just live off of the storage we had. We affectionally dubbed it “No-vendor November”, and we were successful… kind of. As much as we tried to not spend money, there were a couple occasions where we absolutely needed to: once was about midway through the month, when we ran out of milk and eggs (kind of a staple to making just about anything) and some other stuff; another was when I really, really needed to buy a cheap book for a poor old lady I visited from time to time. I didn’t really feel bad about that one. We still made it through that month with nothing but $12 on our list of transactions, an amazing feat by anyone’s standards. We were so proud of ourselves. So how’d we do it?
We cheated. Plain and simple.
You can’t get away from paying rent. It’s a contract. Unless you strike up some sort of exchange of services with your landlord, you can’t get out of that one. You also can’t not pay for insurance, gasoline, internet, phone, and utilities if you plan on having any of those during the month and beyond. Though we didn’t actually spend money during November itself, we paid for that other stuff during the end of October and the beginning of December. What looked good on our list of November’s credit transactions was kind of a sham.
I tell that story to make the point that money is a
necessary evil great tool, and without it we’d be bumming it on the streets. So when we have to pay rent and utilities, though it might be higher than we want it to be, it’s better to pay it than to not because that means a roof over our heads and running water whenever we want.
There are some things you just have to make room for in your budget, and if you can come to terms with the fact that not spending money is not really an option for most of us you can move onward with your plan of being a successful human being and not ever spending more money than you mean to.
Next up: How to keep your end goal in mind (hint: requires an end goal)
(If you missed it, this is a series on budgeting. Expect 3 more posts to follow that explain how we do it.)