on spending (and hopefully saving) money

This is an update on one of my financial goals for the new year, where my goal is to always save more than I spend.

I think one of the hardest things that I’ve had to learn as I become more independent is the art of budgeting as a tool to both reduce the extraneous expenses in my life and to promote the efforts to efficiently save money. Let me tell you: it’s hard.

I have always been a relatively frugal spender. When I was little — maybe 5 years old — I would agonize over whether I really wanted to spend $3.50 on that little teapot set. After all, my allowance was only $2/week, and I really wanted to save up to buy that pretty dancer figurine (which was probably a grand total of $5). It was absurd, but it was also smart.

As I grew up, though, I started making my own money — and man, $8.50 an hour of your own, personal money is a lot when you’ve been living off your parents. Of course, that means you feel like you have more to spend (while still saving!). I remember the first extravagant purchase I decided to make: a camera. Just a little hand-held one, with 8 megapixels and the ability to record, but it took me almost a week to decide yes!

Still, I grew more used to buying things for myself — clothing, dance passes, eating out…I was comfortable with my money, and that led me to living without a budget — always aware of how much I spend, but never quite trying to save.

However, I got more expenses: this year, I pay my own rent, pay my own car payment, my own bills and utilities, groceries, etc. Life suddenly got a whole lot more expensive. And despite the fact that I had gotten a raise ($9.50 for a student is good pay), and I was working almost 40 hours a week (had to hold two student jobs to achieve that)…well, I’m always able to cover my bases, but I also always feel like I could be doing better.

Lately I’ve been trying to figure out how to efficiently budget my money. I’ve been using the “envelope system,” where I put a certain amount of money in an envelope and use that for my entire week of spending. Over the past month, I’ve used $50 a week. I was doing really well with this — saving anywhere between $2 and $10, and only over spending once (by $4). I put the extra money in a jar, and I’m still debating on what to do with this money — since the budget is designed to save me money by not overspending on extraneous expenses, it would be redundant to just save this money. Instead, I’m considering saving it up for an eventual treat for myself (dance lessons, for example, or yoga classes) — something I am too cheap to budget for, but would really like to do.

There is one current challenge to my budgeting: groceries and gas. Due to personal habits, I only end up buying one a week, and both usually cost about $30. I’ve been using the cash I’ve budgeted to purchase these so far, and it’s been working…but it makes me worried that my schedule will rotate and I’ll have to buy both one week or starve / take MARTA at 6am until the schedule is reset.

As such, I’m going to change the structure just a little: groceries and gas will be bought on the card, but I’ll try to always spend $30 or less. To balance this, my cash budget will be reduced — though, I’m debating how much the reduced budget should be. I feel that $20 is too low, but I also realize it’s essentially what I’ve been living on when groceries and gas is taken out.


6 thoughts on “on spending (and hopefully saving) money

  1. YES! Envelopes! I’m trying to figure out the best way to move myself to this system, too.

    As far as the savings (congratulations!), I highly second that idea of using it to “splurge” on yourself–things that you would like to buy but are being responsible about not buying. Dance events are a great candidate for this. Yoga classes, too–and just think, if you found a Groupon for yoga classes? HELLOOOO SAVINGS!

  2. I’ve been all over the spending/saving stuff for the past couple years since I got my own apartment. The best things I’ve found to help are setting my checking account to automatically put $ in my savings account every month as soon as my paycheck hits (I never even notice its gone!) and mint.com – a website that keeps tabs on all your accounts and helps you budget (Email notices whenever I go over my restaurant budget are a major help)

    • Val — I think I might have to start putting an automatic amount in my savings, which would probably help — especially since my savings account is from a smaller bank name, so it’s easier to just ignore that money once it’s there.

      However, I use mint, and I still find it really hard to actually budget through mint — some of the items appear twice, some not at all, and some take a few days to show up. Mint is a great tool for big-picture spending, like my rent and car payments — but not so great for day-to-day budgeting, like my cokes and dance expenses.

  3. I’m kind of confused. Obviously, you’re not living on $50/week total – rent + utilities + car + insurance, etc. So what’s the breakdown? I’m guessing the $20/week is for extraneous spending, and that makes sense to me… but I’m not sure I’m reading this right.

    • Sorry, that is kind of confusing. In this budgeting, I am not including rent, utilities, car, insurance, etc. — any of the bigger items, I budget on a monthly basis.

      It’s my day-to-day living that I budget on a weekly basis…well, to be accurate, I budget it monthly ($200) and then divide that evenly across the weeks. It is considerably easier for me to control my extraneous spending on a week-to-week basis than over a month.

      So in conclusion, yes, the $20 is for extraneous expenses. I think I’m going to try to keep it at $20, and maybe move it up to $30 if I am repeatedly going over for relatively explicable reasons (explicable: not “I just bought a $20 shirt and still need $10 for food” but rather “I woke up late and wasn’t able to pack my lunch, so had to buy food at the mall”).

      Does that make more sense?

      • I guess that makes sense. My rule is that all major/essential items (including groceries, gas, and supplies) are bought on credit/debit card and therefore included in my budget.

        Eating out/drinks/coffee/tipping bands/buying clothes (except for today, when I need to buy a suit for interviews), all have to be bought in cash… which means I have to have earned the cash by DJing/teaching/babysitting/something.

        Since I don’t budget DJing/etc into my income (nor is it taxed), it is my “play” money. It’s not formal, and it depends on what week/month it is, but it gives me some wiggle room. And it means that I always carry cash, which is important to me.

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