What I realized was that I was never going to get ahead by being one foot in and one foot out on my financial approach.
Sure, I had a budget, but I didn’t follow it when I wanted to buy myself a new pair of shoes (even if I needed them for work).
And yes, I paid everything on time, but I didn’t plan for foreseeable yearly expenses (like $1000 for car insurance every 6 months or my yoga passes every few months). So every time January came around, I’d simply put my car insurance payment on credit and be back in the red. Or I would put my workout classes on credit without adding a line in my budget for these expenses.
Two years ago, I took a baby step in the right direction, by saving $200 per month for car insurance so that I simply withdrew from that account when that time came around. However, I didn’t commit to planning ahead for other things, and didn’t have a bailout fund for unplanned expenses like needing all new tires or Christmas trips.
So this year, I realized that something had to change, and BIG! Because I had no savings, no safety net and no real assets except for my car (which, I’m proud to say will be completely paid off in 3 months)! And when I was in the middle of a career change, and potential move to a new place, I knew that I simply couldn’t afford to do things willy-nilly. I had to grow up and fully commit to my budget.
Connecting My Time and Money to My Values
Ever heard of the saying, Show me your bank statement, and I will tell you what your values are? There are lots of different variations on this theme. You can also make a similar conclusion about your true values by looking at your calendar (what you spend your time on). Our habits and actions often reveal a very different story about who we are.
If you look at my calendar and my bank account statement without knowing me, you would probably assume the following things about me:
- She’s a self-centered person who spends a lot on herself (travel, concerts, food, Nordstrom)… and why does she meditate every morning?
- Mirabelle is a workaholic
- Based on her bizarre grocery receipts, Mirabelle is an eclectic cook who might be addicted to Phish Food Ben & Jerry’s (is she a cat lady???)
- Does Mirabelle have some serious mental health issues (or is the therapist she sees every week her CIA handler or a scam artist who promised her to become a Princess in just ten weeks?)
- She has weird gaps of time when she does nothing but watch tv (is she really lazy, or does her CIA job involve watching tv?)
That’s because I spend a lot of time and money on myself. Even though I volunteer regularly, this isn’t the majority of my schedule. I also work a lot (and think about work a lot). I love cooking, so I get groceries frequently and crave weird things. Like, recently, I craved caperberries… and Phish Food, the ice cream that tells the clerk that you’re a lonely pathetic human being, but you actually aren’t, marshmallows + caramel + chocolate is just heaven!
This little audit made me realize that the values I believe I have don’t always align with how I’m actually spending my money and time:
- I want to give back more to others (instead of spending unnecessarily on myself)
- Working hard is important, but spending unlimited time on a job where I am not valued is not helping anyone. I need to quit the job to work for an employer whose overall goals more closely align with my own values.
- I want to be financially responsible with a big fat retirement, savings account, no outstanding debt and a big charity/alma mater donation budget every year.
The good news is that some things do align with my values: I cook healthy meals and I exercise almost every day. I also read quite a bit since learning, growth and engaging with the world are really important to me. I also network quite a bit with people who are in the field that I’m passionate about. Also, I love people, and my calendar reflects that people are my priority.
So How Do You Align Your Budget with Your Values?
Cut. Cut. Cut.
The first decision I made, with the help of Dave Ramsey, was to commit to slashing the following things:
- Shopping for clothes, shoes, bags, accessories (i.e. things I didn’t NEED)
- Entertainment (concerts, movies)
- Eating out
- Travel and trips (no more hotels, plane tickets, etc)
I also live in LA, the land of the valet. So I decided that I would only park for free. This is much harder said than done, but that would also mean that I would have to cut out places that did not have free parking.
I cut my cable bill YEARS ago and have never gone back. Paying under $10 for Netflix or Hulu to watch everything just a day late WITHOUT commercials is totally worth it! You can even subscribe for HBO or Showtime, and even sports channels, so there’s really no need to be tied to cable. If you still pay $100-200 per month for cable, I encourage you think about what you could buy with $1000-$2000 at the end of the year. If watching tv “live” is really that important to you, that’s fine. But for me, I knew that this an expense that didn’t contribute to my happiness or productivity.
What would you cut from your current budget?
The Well-Chosen Splurge
Cutting sounds really scary, so you have to think about your value. What do you prioritize in life? That’s how you pair down a list of things you can cut, and a list of what is important to you, even if it’s on the negotiables list for other people.
I did leave money in my budget for a few things that weren’t musts, but are important to me: 1) fitness classes, 2) therapy, and 3) tithing $40 per week to my church (with the goal of increasing this to 10% of my paycheck once I get out of debt).
Another part of my budget I refuse to compromise on is eating healthy, organic food. I stay away from processed foods. While I can commit to staying out of restaurants, it would make me go crazy if I couldn’t buy healthy food.
For me, while I’m paying more for these things now, I view these purchases as being preventative – to avoid high medical bills and keep me happy and sane.
Some Ways To Save and Still Have Fun
How can you lead full life without hitting up Nobu Sushi or seeing Ed Sheeran live?! Well, rest assured, you can!
- Yelp Elite
What made cutting out what seems be to be all the fun things in life POSSIBLE was that I have been part of Yelp Elite for some years. This means that I get invited to free events around town. From ice skating, dinners and drinks, clubs, movies, concerts and other cool events, I have an amazing way to explore the city for free. What this costs me? Making sure I review the places I DO frequent, posting lots of pictures of the food I eat, and going to some events every year.
- What Comes Around Goes Around
I’ve always been very inclusive in the fun activities I plan. I over-invite people, and like to include people who are new in the area and may not have a ton of friends. I don’t like people who are exclusive, and I think that there’s so much to gain from new friendships. This means that I have lots of people I can ask about what THEY do around town. I tell everyone about free events like Shakespeare in the Park or that movie on the beach, and ask friends to keep me in the loop about things they discover. I like finding out about free events, and I’ve noticed that I’m often the go-to person my friends include when they’re doing something cool and want an activity buddy. I include a lot of people in what I do, so when someone has an opportunity to share, I have a wide network of friends who invite me to things.
Look, I’m a huge introvert. I don’t like hanging out in big groups. I’d rather sit back and observe, instead of being the center of the party. While I look like I’m shy on the outside, I’m the person who reaches out to people individually and makes sure to connect people with others. I notice when someone is having a bad day, or feels excluded, and I include them or do something nice to turn their day around. You don’t have to be the most outgoing person in the world to build a fantastic network of incredible friends. You just have think of someone other than yourself. Even though this post is technically about finances, I wanted to touch on this here because I strongly believe that you don’t achieve success in a vacuum. You need a network of incredible people to walk with you, no matter the journey.
Another awesome free resource is the Internet. There are SO many free activities listed online. There are groups for book nerds, avid rock climbers, and people who are obsessed with France (as I am!). You can find people who love pretty much whatever you love, whether they’re in your city or somewhere else in the world.
- Sprinkle In Local Day Trips
For me, traveling is re-energizing. But I knew that cutting out travel was an important way to avoid putting things on credit. So I’ve decided that I can take local trips with friends. Paying for a little extra gas once in a while won’t kill me. What will kill me is all the restaurants and other unnecessary splurges. So instead, if I travel somewhere local, I’ll pack a picnic. I might allow myself to eat out once, but I won’t spend money on alcohol and I’ll plan ahead to avoid splurging more than I meant to do.
- Learn to Cook
The great thing is that I can learn to make the cool gourmet dishes I’d normally eat at a restaurant, so I could LEARN something new
As for the promised Ed Sheeran bit, you’re in luck because he’s been on tv and in movies a lot recently. Feel free to watch Bridget Jones’ Baby or Game of Thrones for some cameos. You can also watch YouTube clips, or join his fanclub and tell him that you can’t see him as part of a big financial revamp, and see if he might have pity on a fellow redhead. Who knows?
So what do you think? What does your bank statement reveal about you? Do you have room for cuts? What are your well-chosen splurges?
Please comment, share your thoughts and let me know what you think. Please help me keep this a positive forum, though. I am so excited for some debate, but let’s respect each other please. I reserve the right to monitor and delete inappropriate posts. Thanks in advance!
Featured image via