For most of my life, this is what I imagined a budget looked like: subtract my rent and other fixed expenses from my take home salary. Spend the rest. I actually felt accomplished when I divided “the rest” into categories so I knew I’d have enough for groceries and subway fare, but I was still spending almost my entire take home salary every month just because I could.
This budget formula was much worse during my grad school days, when my “take home salary” was a student loan. Whatever didn’t go to tuition, textbooks, and rent was, in my mind, fine to spend. I bought all sorts of things I didn’t need—dinners out, a ton of new clothes, weekends away. Even rent was a questionable expense, since I could have stayed with relatives rather than renting an apartment.
When the loans came due, I didn’t even know how much I’d borrowed. I paid the required minimum every month and continued to pay it little attention. I got my first real job and continued to spend everything I brought home. After all, I thought, saving was for people who made a lot more money than I did. Plus, I knew my parents would always bail me out if there was an emergency, but an unexpected hospital visit and the accompanying bill were enough to bring me to tears, even though I had insurance and the cost should have been manageable. I grew terrified of not having enough money, but I still didn’t know how to get a handle on my finances.
One day I stumbled across the blog Blond on a Budget, now caitflanders.com, and so began my dive down the rabbit hole of the personal finance world, and the beginning of my financial education. I started with the most oft-repeated advice I found: track your spending. After estimating that I spend around 200 dollars a month eating out, you can imagine my surprise when that first month I found that my spending on restaurants was 600 dollars. Confronted with the reality of my overspending, I started to make changes.
That was about two years ago. In that time, I’ve come to a realization that seems so obvious in retrospect that it’s almost embarrassing to write it down: I don’t need to spend all the money I bring home every month. I can let some of my money accumulate, and it can buy me something far more valuable than a new dress or a steak dinner. It can buy me choices. It can buy me freedom. I needed an emergency fund to deal with life’s unpleasant surprises, but I also needed money set aside so that I could say yes to unexpected opportunities.
I’m still a long way from having enough to cover a major emergency like a job loss—although my husband would help pick up the slack—but last month we I were able to move into a larger, cheaper apartment because we put down more money up front. Having to shell out that extra money up front wouldn’t have been possible a year or two ago.
By editing things I don’t care about from my budget, I can open up new possibilities, and put more money toward things I do care about. This doesn’t just apply to my budget. We all have only so much money, time, and energy. If we don’t focus on what we really care about, it’s so easy to end up spending on whatever comes our way. It’s time—long past time—to do some more editing in my life.
And I know the first thing that has to go if I’m going to be free of financial worry: my student loans. I got very lucky in this regard, as my parents have helped out quite a bit, but I’ve been out of graduate school 5 years and still owe a little over $7,000 to the government and $10,000 to my mom, which means it’s time to get to work. I’m hoping this blog will keep me accountable and, if I’m very lucky, inspire someone else to take this journey or hold the course.