The Thing About Money, Part 5: Budgets, or, Knowing where every penny goes

(This is the fifth post in a six-post series titled The Thing About Money. Click to read The Thing About Money, Part I.)

I have tracked every monetary transaction I have made since January 2018.

I had just started grad school and, while not struggling, per se, was stretching to pay the bills. My three jobs covered my living expenses, but I was taking out (a lot of) loans to pay for tuition. I started tracking my spending as an exercise in self-control and to get a more accurate view of what my financial situation was. I wanted to see the cold, hard numbers. Money has always made me uncomfortable, and I have been forever anxious that it would eventually run out. 

Tracking where every dang cent goes. Image from

I also wanted to hold myself more accountable–if I knew I had to put my spending on a spreadsheet, to immortalize my shopping numbers on screen forever and stare at it day in and day out, it would make it a lot harder to drop $50 at Uniqlo every time I felt like I “needed” a new pair of pants to fit in with the full time workers at the corporate office at which I was interning. 

What I expected was to feel trapped. Money has always made me nervous, so having to really stare it down on a day to day basis made me feel a bit… well, queasy. And it did take a while to get into the habit–every time I bought something, I reminded myself to write it down. I tried pen and paper at first and wrote all my sums down in a tiny notebook, but eventually just switched to a google sheet. I made the switch because (a) 99% of my spending is with credit or debit cards, so all the transactions automatically show up in my account and (b) I could use formulas to do the math heavy lifting for me. 

Despite my apprehensions, what surprised me most about tracking my spending was the feeling of relief and freedom it gave me. 

Knowledge is power, y’all. 

Knowing exactly how much I had in the bank lifted the ever-present sense of anxiety that would swoop down even more fiercely when I was in a situation that involved spending money. Every time I was invited to dinner with a friend, I didn’t have to skip drinks entirely, order the cheapest thing on the menu while explaining that I wasn’t that hungry anyway, and spend the whole time praying they wouldn’t suggest that we split the check evenly. I’ve been the last person to get the check on more than one occasion–and, as such, the person who somehow pays $20 more than everyone else despite having the least to eat. This was especially bad when I was still living in New York and a lot of my friends made more money than me. I honestly don’t think it ever occurred to them that I couldn’t keep up with their lifestyle on my nonprofit salary.  

I don’t have to worry about that now* (or at least, not as much). With the power of spreadsheets, my entire financial situation is freely available at my fingertips. Honestly, I don’t even need to look any more–at this juncture in my life, I have a pretty good idea of how much money I have at any given time and in which accounts, in addition to knowing my current net worth (in the negative $20,000 range, y’all. Woo student loans!). I know whether or not I can go out to lunch with a friend. I know how much will be leftover at the end of the  month and how much I can afford to throw at my student loans. 

I know how much every bill costs and have accounted for it. I’ve also been able to start accounting for my future–last year I opened my first retirement account (a little late to the party, but better late than never) and this year I started saving to visit my partner in Germany. Having a budget and recording every single transaction empowered me with the knowledge of when to slow down on my spending and when I can feel good about taking a trip to see a loved one. I also like to spend my time making sample budgets–what would my spending look like if I made two student loan payments in one month?, for instance. 

These days, when I get really anxious and wonder how I will ever be able to pay off my student loans, retire, own a home if I so desire, etc., I take a deep breath and open up my spreadsheets. The numbers are there–numbers that tell me I am not spending more than I earn, and that I’m going to be ok. And yes, my car is twelve years old and over 125,000 miles, but in the event it decides to break down, I can manage it. And yes, my stomach hurts all the time and my joints hurt and I’m getting older and everything hurts, but I have the privilege of affording a doctor**, damn it. Which is actually quite a timely statement, as a medical issue the other night required me to make a doctor visit yesterday morning***. In the past, I would have fretted over whether or not I could afford the co-pay, or, in times I didn’t have insurance, if I could afford even a visit to Urgent Care. Because of my budget, I knew I could afford the co-pay–and it was money well spent to be assured that my spleen isn’t in imminent danger of exploding. 

Here’s the real kicker–I call myself poor. I grew up poor. I identify as poor. I generally believe myself to be poor. But according to the numbers, I’m fine. I’m quite alright. I’m actually doing quite better than a lot of people in the world right now, so what am I bitching about? I am a white, able-bodied, hetero-, cis-gender woman, which means I have a lot more privilege than others. I was born in the United States and have never had anyone question my right to work or even just be here****. I landed a job with insurance, which means I was able to go to the doctor–which means I don’t have to carry the anxiety and mental burden of wondering whether or not I’m going to wake up with organ failure and die alone on the bathroom floor of my apartment. I just need to take a deep breath and trust in the numbers. 

Are you interested in tracking your spending? I encourage you to give it a try–as I said above, confronting my financial situation has made me more prepared to move through life’s monetary obstacles with confidence (or at least knowledge). I’ve made a basic google sheet that provides spaces for expenditures on the left and income on the right. A few simple formulas calculate your totals and subtract your expenses from your income, so you have an up-to-date view of your monthly cash flow. The one I use is very similar, except I also have calculations that show the exact amounts I spend on categories such as groceries, gas, student loans, retirement, and savings (I get a bit extra with my personal spreadsheets, as previously mentioned on this blog).

In theory, you should be able to view this google sheet and make a copy of it. Please feel free to let me know if you have any questions or issues!

Are you already tracking your expenditures? How’s it going for you? Please feel free to leave a comment and share your experience. 

* I actually got a good tip about this the other day. If you can afford it, pay whatever the split is in the moment. Then never go out to dinner with those people again, ha ha. 

** In network, of course. America!

*** Hence why this post is a day late. 

**** There’s a recent debate going around in the FI world about whether or not FI is a “political issue” and whether or not we should be discussing politics when discussing FI. Spoiler alert: IT IS and WE SHOULD BE.

One thought on “The Thing About Money, Part 5: Budgets, or, Knowing where every penny goes

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s