No More Using the ‘B’ Word, or, Changing the Language Around My Spending Plan

For the past two years, I’ve kept a budget.

And by budget, I mean a breakdown of all my monthly expenses, their estimated costs, and lists of every single purchase I’ve made. These lists include information such as date of purchase, whether it was paid for via credit or debit, and whether or not it was in the budget. I also keep a tally of how much money I put each month toward student loans, savings, retirement plans, groceries, and gas, and recently have started listing every single grocery item I buy. If you asked me what I bought on July 11, 2018, how much it cost, and how I paid for it, I could tell you (shitty toll for when I accidentally missed my exit and the highway turned into a toll road, $8.30, credit card)

However, I’ve recently been thinking that the word “budget” just feels too… restrictive. Not restrictive enough to make me stop spending money sometimes (some consumer goods transcend issues of semantics, apparently), but restrictive enough to make me feel like I’ve done something wrong if I spend money outside of my planned monthly bills. 

Some personal finance gurus would say that I have, in fact, done something wrong. Every dollar should be accounted for, and each one of these “little green men” should be put to work. The work could be in a savings account gaining 1.80% interest (thanks for lowering the rate again, Ally) or being used to decrease my student loan debt. The reality is I have hobbies, and I like to spend money on them. I can be interested in personal finance AND make art, damn it!

In the words of Walt Whitman, I am large! I contain multitudes!!!

Does this count as a hobby? Image from pexels.com.

If I want to spend $20 on some new paints and brushes, I shouldn’t have to beat myself up for it. After all, if I don’t cultivate my hobbies now, what the hell am I going to do when I hit my FIRE goal? An article in the Wall Street Journal from earlier this year describes how not having a solid out-of-work life can affect workers when they retire: “Without the purpose of fulfilling work, retirees can feel adrift and become depressed. Without the camaraderie of their co-workers, retirees risk becoming socially isolated. Without the intellectual stimulation that work can provide, retirement can accelerate cognitive decline,” (Although I have to point out this article is from the Wall Street Journal, who probably has a vested interest in squeezing every last drop out of worker bees as possible…).

I think there’s a point between being financial savvy and completely losing your sense of self. 

And if keeping my sense of self requires supplies so I can make art, then I am damn well going to spend that $20. Besides, I’m investing in hours of entertainment and pleasure. 

And I’m not throwing myself completely out the window financially, either. I have my savings accounted for in this spending plan. My trifecta–$500 to my IRA, $500 to savings, and $550 to student loans–is automatically taken out at the beginning of every month. These amounts, combined with the $1351 I spend on rent for my 400 sq ft studio, account for 66.5% of my take-home pay. And that $500 in savings doesn’t include the $100/month I’ve planned to cover any travel expenses; I bookmark this money to go into a special account every month, so when I want to take a trip, I don’t have to feel guilty about using it.

(Although I just bought an $1850 ticket to Germany to visit my partner over Christmas, and having the money in a separate fund didn’t make me feel less anxious about it. Now that the initial band-aid has been ripped off, though, it’s not so bad.) 

All in all, I’m not doing that bad. My spending plan is comprehensive enough that it covers all my bills, including the ones that vary from month-to-month. And I have a tendency to grossly overestimate those, too. For example, it currently costs about $35 to fill up my 2007 Yaris here in CA. I have budgeted $70/month, or two tanks, for gas. However, since I walk to work, I use very little gas. Most of my driving involves going to the gym, a park to hike, or to Oakland to visit my best friend; as such, I very rarely meet that $70. 

However, if I lowered it to the true average–$35–but spent more than that, I would feel as though I had committed some horrible crime against myself. I would be something that I find inexcusable–an irresponsible person

I may be irresponsible in some aspects of my life, but finance is not one of them.

(At least not now, anyway, since I’ve learned how to handle money.) 

And some expenses that would have been labeled as “Out of Budget” on my previous spending plan are actually expenses that (a) I can afford and (b) genuinely make my life, and the lives of others, better. For example, I recently got accepted as a volunteer at a large animal nonprofit in my area. And by large, I mean there’s a volunteer force of over 1000 people. These volunteers all need training (and t-shirts) in order to volunteer with this organization. As such, volunteers are requested to pay $40 when they undergo training. I very happily paid this $40 (plus an extra $10 donation), because I want to help with this organization and I’ll have my time occupied doing something I enjoy for three hours a week for at least the next six months. And if I want to continue my tenure, I can do so without being re-trained. For me, this $40 is an investment that will greatly enrich my life (not to mention allow me to finally love on some animals without violating the terms of my lease). 

This may not have been budgeted, but it does not break my budget. 

So, in sum, I’m changing my budget-based vocabulary to one that frames my money situation as a spending plan

This is how I plan to spend the majority of my money. And as long as I utilize my money in accordance with my spending plan, then I can do whatever the hell I want to with the rest. And what does that look like?
Some months it might all go into savings or student loans. Some months, like this month, it will go toward car registration and a dang haircut. And some months I might spend an extra $20 on fucking paint, because my sanity and joy is worth it. And that’s totally OK.

3 thoughts on “No More Using the ‘B’ Word, or, Changing the Language Around My Spending Plan

  1. I to use a spending plan in coordination with my savings plan. And within that spending plan I utilize sinking funds like your $100/month toward travel but I have many like one for biannual property taxes and car insurance and one for home maintenance. So pretty much every line on my spending plan is either a rolling fund or a sinking fund. The rolling funds like groceries or personal spending accumulate if I don’t spend much one month allowing me to splurge another month. The sinking funds just accumulate until the bill is due and then all the cash is there.
    Part of the reason we’re able to do this is that we’ve paid off debt so we don’t need to make sure all of those dollars are working quite as hard each month. But I know there’s also a way to look at it over a year to know that some months you pay extra on your loan debt and some you buy art supplies and all if it fits into your spending plan.

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    1. Thanks for this insight, Ryan! I do something similar, but with a “total” at the end of each month that shows how much I have left over after my bills and expenses. I usually split that between student loans and savings right now, but also try to leave a little extra for funzies 🙂 Of course, the guilt over spending is something I’m still working on, ha ha.

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