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.