I've been overspending since school started. It hasn't been the result of any buying binges; I'm still happiest in a pair of hand-me down jeans from my little brother, and my $10 Tracfone is probably currently out of juice in the bottom of the laundry hamper. This is actually bad news: it would be much easier to correct the problem if I could point to one area of my life where I'm messing up, chastise myself, and get back on course. Instead I'm experiencing the far more insidious lifestyle inflation.
I've gotten sloppy. I'm putting money into savings every month, yes, but I've been doing an incredibly slipshod job of tracking my spending lately. I'm falling into some bad habits like buying lunch at least two or three times a week, and I'm hanging out a lot more with the rather spendy crowd of TFAs. I'm getting whatever I feel like eating when I'm at the grocery store instead of trying to plan frugal meals, and I'm just generally less cost conscious.
There are a million justifications for why this is ok. I'm young, have a stressful job, and should go have some fun. Unlike many of my friends here who have tens of thousands of dollars in student loans, I have no debt. I haven't been missing my targets by that much; although, that is in large part due to a small windfall when I learned I was getting paid for attending a follow-up meeting for some professional development. I'm still saving, just not as much.
Truly, I haven't been doing that bad. For September through November, I met my savings goals even though it was a lot tighter than it should have been.This month it just isn't going to happen. Maybe, just maybe, I could make it work if I didn't buy anyone any Christmas gifts, but I'm not willing to do that. Still, it hasn't been a terrible semester, especially because I threw a bonus I got right before Thanksgiving into the house fund, bringing the total over $9,500. I completed my goal of getting my car fund up to $10,000 right on schedule, too.
All of which contributes to that dangerous sense that all of this spending is somehow ok. Some of it is, much of it isn't, and I need to sort out which is which. My unbudget system of paying myself first and then living on what was left and meticulously tracking spending worked well for quite a while, so I wouldn't call the experiment a failure, but it isn't a good fit with how I'm managing my money right now. I need more structures in place to track whether I'm meeting my goals and spending an appropriate amount on both the necessities of life and frivolity. I need more carefully thought through prioritization.
In other words, I need a budget. On January 1st, I'm starting fresh with a new budget for the new year. I'm looking forward to it, actually. I always took a certain geeky pleasure in entering all of my purchases in the free spreadsheet-based version of PearBudget. It's a lot easier to spend without guilt when you know you've budgeted for whatever it is, no matter how silly your want. Plus setting meaningful goals and then achieving them is very fun and fulfilling.
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3 comments:
There probably are some areas you could cut a bit--like some meals out. i would suggest more flexibility in your categories. For instance, you have 10000 for a car. But interest rates are at or near zero, so I wouldn't use my car fund to buy a car! I would take the superlow financing. Then you could think of your house fund as having 20000!
I think your progress is more than impressive, one year out of college. Unlike many frugal types, I have a very fluid sense of a budget as long as my overall savings goals are being met.
Wait. You've saved $19,500 since you graduated a year ago and you're in one of the worst-paying trades in the developed world?
I'd say you're doing exceptionally well.
Maybe you should consider going in the opposite direction, at least for a short period: cut yourself some slack. Buy yourself some post-Christmas presents in the sales, let yourself go out to eat a little more often, and maybe even take a short trip over the winter break.
There's something to what Frugal says: if you bought a car on time for the same amount you're putting aside in the car fund, shifting the ten grand into the house fund category would instantly give you enough for a down payment. Or, given a reasonable car payment, you could continue to salt money into house savings, allowing you to build up an even larger chunk of equity for the future dwelling.
I think that you should listen to Funny about Money. It may a good idea to get the car now with the interest rates at zero in many cases. Frugality it good but can be taken to extremes and then it can become a problem because you might deny yourself a necessity like a vehicle that is safe.
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