personal finance

What My Budget Looks Like Today

Okay, friends, settle in. I am about to get brutally honest about what my money situation looks like today. I’m talking REAL numbers about how much money I make and what my bills look like.

Why am I doing this? Because I think we need to be more honest about money and not feel ashamed to talk about our salaries and budgets. Sure, my salary may not be all that impressive to other people, but it’s fine for my needs and it allows me to support myself easily.

I was inspired to write this post after listening to an old episode of the Girl Next Door podcast (I’m slowly making my way through their back catalog of episodes) where they got real honest about their money situations, including what they make and what debt they have.

So, let’s do this!

At this moment in time, I’m 30 and I work a full-time job as an SEO content writer. I’m in my fourth year in this current position, although the position itself has grown and changed drastically over time, and each year, I’ve gotten a great raise that has put me in a fairly comfortable financial position. I also dabble in freelance writing, but I’m only working with one client who needs content every couple of months or so. It actually works out really well for me because I quickly realized the freelancing side hustle was not for me. This way, I get consistent work without having to spend hours and hours hustling after it. And the money feels like a bonus. It’s never accounted for in my budget, and I usually funnel it to my debts.

So, what does my salary look like? My gross salary is around $47,000, but once I account for taxes, health insurance, and my flexible spending account that I use for healthcare costs, I’m earning around $37,000 a year. And I usually make around $3,000 a year from freelancing, although that doesn’t account for taxes, so when all is said and done, I’m earning a little under $40,000 a year.

Now let’s talk about my expenses. I’m going to break this up into a few categories: housing, debts, auto, and other. These are my fixed expenses that I have to account for with every budget I put together. (Friday, I’ll talk about discretionary spending and where my money goes after the bills are paid.)

Housing

Like most people, this is my biggest expense. One of the reasons is that I have chosen to live alone. Obviously, I could save more money and pay down my debts faster if I had a roommate, but it wasn’t worth it for me. I really, really wanted the experience of living alone, and after 18 months of it, I can say with certainty that it was the right decision. It just means that all of the housing and utilities fall on my shoulders, but it’s totally worth it for me.

Currently, I spend $825 a month to rent a one-bedroom apartment in a great location. And I’m getting a steal because most one-bedroom apartments around here are around $1,000 a month. There are certain sacrifices I’m making: my apartment is tiny (under 600 square feet with no dining area to speak of), the appliances aren’t updated, the countertops and cabinets are a gross beige color, etc. But I honestly didn’t want to pay much more than $800 and I’m really happy with the apartment and location, so I’m hoping to stay here for at least a few more years.

My other bills related to housing include utilities (water and electric), which usually run around $100 a month, sometimes a little more. I also pay $75 a month for high-speed Internet, which feels really pricey, but I literally never have issues with my Internet and it’s lightning-fast, so I can’t complain too much. I don’t have cable, but pay $12 a month for Netflix.

Debts

After housing, my next biggest expense is paying off my debts. I carry three specific debts: a school loan, a car loan, and credit card debt.

My school loans total $13,409 currently and I can’t see myself paying those off for… well, a long time. I try not to think about it too much, haha. I pay the minimum balance on two of the loans and I have a third loan that’s under $500 that I’ve been very focused on paying off. In total, I pay $200 a month for my school loans. I don’t regret my student loans because they were the only way I was able to pay for college, so I try not to think of them as a burden. They just… are. I had to have them and they will be paid off one day. I refuse to feel bad about my school loans or the fact that I may be in my forties and still paying them off.

(You may be wondering why I haven’t consolidated my student loans and the truth is, I just haven’t done the research to figure out how to do this. It’s pure laziness on my part.)

My car loan is almost paid off – I have less than $900 to go. Woop! Once the car is paid off, my plan is to take the money I was spending on my car payments every month ($228) and put it into a savings account for a car down payment. I don’t want to buy another car anytime soon, but I want to have a hefty down payment saved up for when the time comes for a new car. Once I’ve saved $3,000 for my down payment, I want to start throwing that monthly payment toward my school loans. (Honestly, I’m not sure if this is the best decision because all the debt blogs say to pay off debt before saving, but I also know I’d feel more secure knowing I have a down payment saved up, should my car give out on me in a year.)

Lastly, my credit card has a $600 balance. But considering that balance was over $2,000 just a few months ago, I’m feeling rull good about this balance. So sue me.

Auto

I really, really wish I lived in a more walkable city with a dependable public transportation system, but I don’t. I have to drive everywhere. My car is old (2005) and is nearing 110,000 miles, but it’s in great shape and I’m hoping it’ll last me another few years.

My auto expenses include:

Car payment – $228
Gas – I fill up once a week for about $20
Auto insurance – My six-month premium is just under $900, which feels insanely expensive, but every time I quote out another auto insurance company with the same type of coverage I have, the price is about the same. (Am I over-covered? I dunno! Tips welcome.)
Oil changes – Around $30 every three months
Car registration – $30 once a year

I’ve been lucky in that my car hasn’t needed too many pricey repairs. I replaced all four tires a few years ago and recently had to get my brakes replaced, but that’s it. But now that my car is getting up there in mileage and years, I know I’m going to need more frequent repairs and replacements. But so far, she’s held up well and drives just fine! (*knock on wood*)

Other

Some of my different miscellaneous bills that don’t fit into any of my bigger categories include my cell phone bill, gym membership, and Spotify Premium. My cell phone bill is around $100, but this includes my leasing agreement for my iPhone and unlimited data. I pay $35 a month for the gym and $10 for Spotify Premium, which is worth every single penny (and I’m not even much of a music person!)

I’m also part of two monthly subscription services – Book of the Month, which is $15 a month, and Sephora PLAY!, which is $10 a month.

But that’s what my expenses look like today! On Friday, I’m going to talk more about my discretionary spending and specifically where my money went (after bills) during the first quarter of the year.

Truthfully, it’s going to be damn hard to push publish on this post because it feels so incredibly vulnerable to be this honest about my financial situation today. But I’m also tired of reading personal finance posts where it feels like people have all their shit together and can put away thousands of dollars into their savings or toward their debt. That’s not my situation because I’m a single person supporting myself on my own and I don’t want to live so frugally that I miss out on the things that make me happy. And honestly, I don’t have my shit together (something you’ll definitely notice in Friday’s blog post) and that’s okay. As long as I’m willing to admit my mistakes and learn from them and try to be better, that’s all that really matters.

And, honestly, I’m proud of where I am today because life was goddamn hard when I was growing up. Financial literacy is not a thing for those of us who grow up poor and functioned in survival mode for most of our growing-up years. I’ve had to learn financial literacy the hard way, which included getting into credit card debt before I even graduated from college. But I’ve taken the time to learn and grow, and I’m in a pretty damn good place today. Maybe not by a financial planner’s standards, but by my standards. And shouldn’t that be the standard that guides my life? I think so.

Categories: Personal Finance

On Completing a No-Spend Month

You guys, I did it! I completed No-Spend May!

I feel so good about myself today, knowing that I completed this challenge. It’s a crazy thing, you know? This idea of going an entire month of not spending money on anything but necessary purchases is just a little nuts. It means turning down plans with friends, scheduling my weekends so I’m not tempted to eat out or go shopping, and just… taking out the choice of spending. It wasn’t easy, but it also wasn’t all that hard. I think I was finally ready to commit to this challenge this time around.

What was most challenging about not spending money was turning down lunch plans with friends. For someone who grew up with friends who were solely school friends, not let’s-spend-all-weekend-together friends, I’ve loved having a more active social life than I have had in the past. And I’m always worried it’s all going to be taken away from me. Like, I’ll wake up one day and all my friends will be gone. The rest of my days will be spent as a hermit. It’s this fear that should probably be talked about in greater detail in therapy, so I’ll just say that I do not love saying no to plans. I hate disappointing people and I felt like I had to do that a lot this month. It was necessary, but it didn’t always feel good.

The other challenging part of not spending money was that there were just some nights when I was either sad or lonely or had a rough day… and all I wanted to do was order a pizza. Instead, I had to own my feelings while I heated up another plate of leftovers in the microwave. It’s an interesting realization; I’ve always known I’m an emotional eater (I’d seriously love to know who isn’t, though), but I’m also realizing that I engage in restaurant therapy when I’m feeling sad. Kinda like retail therapy… I want someone else to cook for me, I want some other kind of comfort food. I don’t want leftovers. And yet… I had the leftovers and the world did not stop spinning. And I felt better about myself for doing so.

What is most curious to me is how I feel today – nervous. I’m proud of myself for completing this challenge, but I’m also nervous about where I go from here. I liked how I felt this past month – in control, on top of things. For the first time in a really long time, I felt like I finally had enough. I was able to get ahead on bill paying and even pay off my cruise deposit in full (which isn’t due until the end of September, so it was a big deal for me). There was no cringing as I logged onto my bank account to check my balance.

So the last thing I want to do is to go back to how I spent money before. For me, the point of a no-spending challenge isn’t the physical act of not buying anything; it has more to do with the emotional pull that spending money has over me. It’s to figure out the why behind the spending.

I use shopping as a crutch, as a way to make myself feel better, as a way to fit in with everyone around me. I don’t shop nearly as often as most people, but when I do shop, it’s usually done impulsively and because I want to fit into this consumerist culture I live in. Shopping has always been something I do to impress other people, rarely for myself. Thankfully, over the past year or so, I’ve been able to shed this need to shop and have new clothes in my closet or new things in my house at all times. I have downsized my closet and minimalized my home, now adding pieces intentionally – things that I know I need, not things I think I want.

Eating out is my biggest struggle when it comes to money because I truly enjoy eating out and it’s one of my favorite ways to socialize. I’m not much of a cook and spending time in the kitchen is more of an annoyance than anything else. So this part of my no-spending challenge was really difficult, but man, was I able to save a lot of money. I took away the choice to eat out, which made everything so much easier. There was no thinking involved: I can’t spend money, so I can’t eat out. Done and done. Maybe I’m more of an Abstainer than I realized.

The truth is, I’m not exactly sure where I go from here. I want to have the choice to eat out if I want to, but I want to limit the number of times I do. I want to continue thorough meal planning and eating in as much as possible, both to save money and to save calories. I don’t want to spend impulsively, but I know I’m not perfect and that will happen from time to time. I want to place an emphasis on saving as much as I can. And I think it’s also time to invest the time and money into budgeting software (specifically, You Need a Budget) to take this one step further.

I’m really proud of myself, though. I’m really proud of finally completing a no-spend month when I’ve failed at them in the past. How did I do it? I just took away the choice to quit. Quitting wasn’t an option. I knew I had to see this through, for myself. I stopped letting other unnecessary things take precedence over this thing I really wanted to do.

And I can’t wait to take on this challenge again.

Categories: Personal Finance

Buy Nothing Month – The Halfway Point

I’m a little more than halfway through my Buy Nothing month, and it’s been going really well! I feel more in control of my money and my spending habits, and it’s making me think about what I want my financial life to look like when May is over.

Before this challenge, I wasn’t spending money like crazy, but I also didn’t feel as if I was being very intentional about my spending habits. I’m not one to drop a bunch of money on clothes or frivolous items (if anything, I need to spend more money on clothes… says the girl who hasn’t bought a new sports bra in years). But my food budget was out of control. I was spending a lot of money eating out (an average of $100 a month) and I was also spending a lot of money at the grocery store (maybe somewhere around $250-$300).

I shop the sales, eat leftovers, consider my pantry before a trip… I try to do all of the things that I’m told to do to save money on groceries, but I’m still not very thrifty when it comes to groceries. I’m okay with paying slightly more for food, but I’d still like to lower my food budget drastically.

So this Buy Nothing month has really been a test to see how I handle not eating out on a regular basis because not spending money on clothes and such isn’t a huge problem for me. All emails from retailers are funneled into their own special folder on Gmail, and considering I have more than 300 emails sitting in that folder with the earliest one dating back to January 20… well, I barely remember that folder is there. When I go to Target, I’m usually armed with a list and I stick to my list. I don’t go to the mall because malls make me anxious. Shopping? Not really my thing anymore! My food budget is where the majority of my discretionary income is spent. Followed by entertainment, like movies and special events.

I’m 16 days into my Buy Nothing month and it’s going massively well, but just like anything, there have been highs and lows.

Here’s what’s been good:

Meal planning

I enjoy meal planning, but I haven’t been very successful at it lately. This challenge has forced me to be more intentional with my planning to make sure I have something planned for every meal, every day of the week. There’s no “Oh, I’ll just pick up a sub on my way home from work” if I forgot to plan for something. Nope – not allowed. So I have to make thorough plans and it helps me to feel much more in control.

Having less waste

I admit that I can be very wasteful, cooking something and intending to have 3-4 days of leftovers, but only having 1-2 days of leftovers. But now I’m finding myself wasting much less food and actually consuming all of my leftovers. That’s just one less meal I have to cook! (And I haaaate cooking. Ugh.)

At-home roommate dates

My roommate and I set aside one night a week for each other, and that used to mean going out to a movie (which could cost upwards of $40 if we went to our pricey movie theater since it includes a full meal with the movie) or going out to dinner. But she was on board to stay in this month for our dates. The first week of May, I cooked for her and then we watched a movie on Netflix. The second week of May, she cooked for me and we played a trivia game. This week, our plan is to make homemade pizzas and watch Harry Potter and the Prisoner of Azkaban!

Not worrying about money

There’s something so gratifying about not spending money, you know? It’s powerful. I don’t have to worry about having enough money for this event or that outing. So much of my life is spent worrying about money and what’s in my bank account. Taking the pressure off this constant worry feels so good.

Okay, so that’s the good stuff. What’s the bad stuff?

I had to break my rules once

A dear friend wanted to celebrate her birthday with dinner out and I couldn’t say no to that. (Well, I could, but I didn’t want to.) I had to break my rules to get her a little gift and for dinner (though another friend ended up picking up the tab, which was crazy generous of her and I’m looking forward to the time when I can pay it forward.)

I’m not saving nearly as much as I thought I would

Why is living so expensive? And where did all my money go when I was spending all my discretionary income on eating out all the time? Before I started this challenge, I was so excited about all of the money I was going to save but… it’s not as much as I expected. Hopefully, things change over the next two weeks! Sigh.

Planning events is tough

I completely forgot that I am participating in the ColorBuzz 5k this weekend with my mom. We’re going together to pick up our race packets on Friday night (since they charge you money to pick it up on race day – seriously?!) and then the race itself starts at 8pm on Saturday (but we’ll be at the race site much earlier than that!) These events fall during the time I would eat dinner, and since I won’t be at home, it’s just easiest to just grab something on the way, you know? We’ll see what ends up happening, but I never realized how tough it was to plan stuff like this, factoring in the fact that I’m not supposed to be spending any money!

I have thoroughly enjoyed this challenge and spending less money, but it has also made certain things more difficult, especially with the phase of life I’m currently in. I definitely want to try to continue eating most of my meals in, allowing 1-2 meals out on the weekends. I want to continue to lower my grocery budget and maybe even continue my ban on shopping for the foreseeable future.

But I still have 15 days to go and I am curious to see what other epiphanies I’ll have over these next two weeks. I’ll be sure to give a final overview of my challenge – and a look at what’s to come next for me!

What area of your life is most of your discretionary income spent?

Categories: Personal Finance

I’m Buying Nothing But Necessities in May

This May, I’m taking on a Buy Nothing challenge.

Honestly, I’m kinda scared about it. Mostly because I have a very complicated relationship with money. I think that’s pretty normal when you grow up as I did, worrying about money from a young age. A lot of the people I know have had very privileged lives – people who didn’t have to take out school loans to afford college, or who received a car for their sixteenth birthday, or who took incredible family vacations just because. (People who are also very aware and recognizant of their privilege, I should say as a disclaimer!)

I try to not compare situations because I know we have to make peace with our past and live in the present. And I don’t want to make it seem like I’m not grateful for all the ways my mom supported me. We may not have had a ton of money, but we had oodles and oodles of love. I got to live at home during college (and living with my mom has always been fun and easy and wonderful), and my mom basically gave up her car to me because I needed it for traveling from work and school.

So money is complicated for me. Even now, when I can support myself and still do (most) of the things I want, I feel weighed down by money, trapped by how much I need it. I can’t go out to a simple dinner with friends without calculating how much everything will cost – and being the lame girl who orders water with dinner because damn drinking is expensive.

I’d like to buy a condo someday in the future, but saving for a down payment is nowhere on my radar.

I’d like to have six months of emergency funds saved, but how do I do that when my bills alone take up more than 60% of my monthly budget?

I’d like to travel a few times a year, but where does that fit in with my longer-term financial goals?

And don’t even get me started about retirement savings or investments or how I’m ever going to afford to have children.

It’s enough to give me a panic attack.

But this is exactly why I want to challenge myself to spend money only on necessities for one month. Because I want to pause my spending, take a step back from my finances, and regroup. I want to challenge myself to say no to spending when I want to say yes. I want to learn more about my money habits and why I want to spend money on XYZ thing – what stories am I telling myself?

And I want to save, save, save. My goal this year is to have $1,000 in emergency savings (I currently have $0, which is a fun way to live your life… if you like to live as if you’re constantly on the top of a roller coaster and just realized you don’t have a seat belt on). I am really interested to see how much money I can save when I’m not spending all of my discretionary income on eating out and Starbucks and Target shopping trips.

So, let’s talk about the logistics of this Buy Nothing month.

What I Can Spend Money On

Bills (duh)
Groceries – limiting myself to one visit per week (whimper)
Gas and any auto-related maintenance – I’m due for an oil change soon, and it might need to get done during May
Any Dutch-related expenses – food, medication, etc.
Toiletries – this includes makeup, though I’m very minimalist about my makeup!

What I Cannot Spend Money On

Restaurants
Kindle purchases
Shopping for clothes, household items, accessories, or anything unnecessary
Starbucks
Pedicures
Events that cost money

Basically, anything that is not 100% essential!

The Exceptions for this Month

My bimonthly hair appointment and eyebrow wax – This appointment was planned months ago.
Mother’s Day – I’m not sure what we’re doing, but we are doing something.
Book club – I’m not missing book club due to this challenge. I am absolutely committed to this challenge, but missing book club is like sticking a dagger right into my heart.
Weekly writing dates – We meet at Starbucks, but instead of my usual breakfast sandwich with a Frappuccino, I’m limiting myself to a tall regular coffee. I’ll put $25 on my card at the beginning of the month and will not be able to reload it again until June!

And that’s that! I am incredibly nervous about this challenge, but I plan on checking in halfway through to discuss how it’s going, what I’ve been struggling with, and any lessons I have learned.

Here we go!

Your best advice for completing a Buy Nothing month for a girl who has a complicated relationship with money?

Categories: Personal Finance

On Frugal Living

I started reading personal finance blogs this year. Because 2014 was The Year I Was Going To Be In Control Of My Finances. This was it! I would learn how to save money, spend less on frivolous purchases and meals out, and start paying off my consumer, school, and medical loans. I scoured the Internet for budget spreadsheets and sat down to make a few financial goals.

Six months later, I’m still following the same bad consumer habits. I’m making budgets, but not really sticking to them. I’m trying to put systems in place, but wondering why they’re not working. I’m trying to take on challenges, but not putting forth the effort and dedication to see them through.

It seems to be a normal pattern in my life. I try to be super ambitious and make these lofty goals that sound fun in the before. It’s in the during that I lose my focus and perseverance. And it’s in the after that I sit here, my head down and energy depleted, another goal I let fall to the wayside because things got hard and I forgot about what I wanted in the first place.

Don’t trade what you want most for what you want right now is a quote I found in a magazine a long time ago, and it’s something I’ve carried around with me since then. What do I want most? What I want most is to be more responsible with my money. I want to follow through with my goals, so I can finally reach the end of a challenge and be proud of what I accomplished. What I want most is to completely change the way I view money and consumer habits, to stop living beyond my means and trust that giving up things I think I want now for big progress in the future is worth it. I live like it isn’t. I live like the present moment and my needs rightthisinstant are more important than future moments and how I want to feel.

We’re midway through 2014 and I’ve been beating myself up a lot because I’m not where I had hoped to be by now. I had hoped to have lost some weight and adopted healthier eating habits. And I had hoped to gain control over my finances, have paid off my credit cards, and started a four-figure emergency fund.

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As it stands, I’ve completed one of those goals – paying off my credit cards – thanks to a sweet income tax refund, but I’m still using my credit card more than I should. (I always pay it off, but then my other money goals get pushed aside.)

It’s hard being this honest about my struggles because it opens me up to a world of criticism. I know there are people reading this who don’t understand how I can’t just be stricter with myself. I mean, I accept that criticism will come. It’s warranted. It’s usually not helpful, but I understand where it’s coming from. But I’m six weeks in a “spendless” summer and I am not doing well at all.

I’ve become passive with how I spend my money. It’s not special to me. It’s funny because I don’t even get a lot of joy out of spending money. Sometimes, I’ll shop for clothes, pick out a few items to buy, and get to the register sick to my stomach because I know that a) I don’t need what I’m purchasing and b) that money should be going to my debt. I tell myself I don’t need to go out for lunch on Saturday, but then I do because it’s become a habit for me and good god, habits are hard to break.

I decided not to outline my spending for the past two weeks because, to be quite honest, I am embarrassed when I look at the numbers. I knew I had a lot of expenses this pay period, including celebrating my mom’s birthday, but I really completely combusted at the end of the two weeks. Just a complete mess, disintegrating all my hard work.

It’s not pretty.

I have to do something different. I have to approach this differently.

I need to learn how to live with less. I’m not even sure how to do that, quite honestly. I know where my weaknesses lie – occasional shopping trips where I declare I need work clothes! or I need vacation clothes!; eating out way too freaking often; not making budgeting and frugal living a priority – and it’s up to me to fix it. I am the only one standing in my way. I have to make living a frugal lifestyle a priority. I have to acknowledge that I am responsible for my money habits, nobody else.

Being frugal is not very fun, it’s not very sexy, it’s not very exciting. It’s boring. It’s saying no to plans with friends and turning away from the cute clothes at Target during my toiletries run and choosing my boring home-cooked meals over delicious take-out. (No matter how exciting or delicious I make food, it’s still not as exciting as take-out. Sorry.)

But the end result is worth it. Because the end result I have right now because I’m not following a frugal lifestyle isn’t worth it. This feeling of disappointment and annoyance at myself sucks. I want to stop the feeling of suck. I want to feel a change in the way I approach money and consumer habits. I want to see my debt go down, my savings go up, and my budget to feel less chaotic.

So, this blog post has been close to 1,000 words of rambling and I’ll stop here. As today is payday, I have been thinking about how I want these next two weeks to go. I can only think in two-week increments, and I think that’s okay for now. I’ve decided that, indefinitely, my goal is going to be to give myself a spending budget of $300 per pay period. That $300 will cover groceries, gas, toiletries, and any other expenses I have. (After bills are paid, anything leftover minus $300 will be put in my savings. And any money left over from the $300 at the end of the two weeks will also be deposited into my savings.) It sounds like a lot because it is, but I am trying to make this as doable as possible for me while still taking care of my debts and savings.

Gradually, I want to decrease the amount until I get to a point where I can survive on $200 or less per pay period. I want to do this until I am out of consumer, school, and medical debt and until my emergency fund is at $10,000. So, basically, for a long damn time. It won’t be easy, it won’t be fun, and I am 100% certain I will mess up along the way. There will be trips planned and expenses that pop up, but I want to hold myself to this standard as often as I can.

I still plan on doing biweekly updates on my progress because I think this stuff is interesting, and I need the accountability. At least right now. Through this process, I want to see a change in the way I view consumer habits and spending money. I truly believe I can do this and I truly want this. I’ve never been good at managing my finances, but there’s no reason why I can’t be. Seeking guidance from professionals like an Insolvency Practitioner Worcestershire can offer valuable support and guidance along the way.

On a scale of 1-10, how would you rate your money management skills? Mine? Oh, I’d guess a 3?