Hi, I’m Kris. And I fucking love budgeting.
I came to budgeting the first time my hours were cut after I had a kid. I’d planned so well! I had a job from which I could work from home, and health insurance, and I’d paid for sperm with cash. Man. I had my shit together. Then my insurance deductible more than doubled while I was pregnant. And when my kid was not quite a year old my hours were cut (before I’d managed to pay off that clusterfuck of medical debt from my totally healthy pregnancy and delivery).
I sat down with my expenses and my new income and…couldn’t make it work. Like at all. Which brings us to myth number one about budgeting.
Budgeting Myth #1: There’s no point in budgeting if you’re poor-ass broke.
I beg to differ.
I worry about money. Most of the time I have very little of it. I got one of those fancy college degrees and proceeded to get a series of entry-level jobs at places like coffee shops and bookstores and restaurant kitchens. My choice, because the thing I knew I was meant to do was write books, which is a great thing to think about while washing dishes or making espresso drinks. Many are the books I’ve planned out during work hours.
Since I’ve never had an abundance of money or a parental safety net waiting in the wings, I’m pretty comfortable having very little money. But there’s a minimum. And the first time my hours were cut, I didn’t think I’d be able to meet that minimum. So I started budgeting.
You can budget on notebook paper, in Excel, or using a cool program. (I’m in love with YNAB. I’ve got it on all my devices, syncing through Dropbox, and I enter transactions at the register on my phone. It’s sweet. I’m not an affiliate or anything, but I should be, because I could talk your ear off about the coolness of it. Hint: YNAB stands for You Need A Budget. And you so do.)
Myth #2: Mint.com/Quicken/my bank statement is my budget.
No. No, it’s not. All of those things tell you where your money has already gone. It’s the equivalent of Past You going, “Yo, I blew all our cash on obscure first editions and Chili Cheese Fritos, sucka!”
Budgeting, real budgeting, is the equivalent of Present You saying to Future You, “You will spend no more than two hundred dollars on groceries this month. If you spend all of it on Fritos, you’re going to be very hungry.”
I sit down in the beginning of the month with my trusty digital bank statements and reconcile my accounts. I budget only the money I have on-hand, because then I can never overspend. I have funds that collect over the course of the year to pay for intermittent expenses like car insurance, registration, propane.
This is the most control I’ve ever felt over money, and my income is the lowest it’s ever been.
Myth #3: Budgeting is hard.
Yo, life is fucking hard. Facing your kid when you can’t afford to buy even the smallest, cheapest toy is hard. Budgeting, once you get it set up, is a matter of entering numbers in a column and doing addition and subtraction. Or not, if you have a spreadsheet with formulas already plugged in. It should be taught in school, with addition and subtraction. I’m not joking. This shit is way more important than reading Dickens. (Okay, okay, I hate Dickens.) This shit is way more important than reading Shakespeare (and I love Shakespeare). Way, way, way more important.
Setting up a budget can take a bit to solidify, but if you’re dirt fucking poor, lucky you: not a lot of things to spend money on. All those fancy entertainment categories? Nah. Mooring fees for your private yacht? Nope. Extra delicious crickets to feed to your exotic (slightly illegal) endangered pet gecko? Not so much, no.
My first budget categories were like: mortgage, utilities, student loans, car stuff, food, gas. Bear in mind: I hate spending money. I eventually had to add lines for things like clothes, household goods, replacements, travel. Things I know we’re going to do, and need to have some way to record. But I didn’t do all that until I got my taxes back that first year because I had no fucking money.
Let’s pause here for a little entertainment from the awesome Lyrics Born.
Budgeting is like anything else. Once you get in the habit, it’s crazy simple.
Myth #4: Budgeting to zero means never being able to spend a single penny on anything fun ever again.
Not if you do it right. Unless you’re me. Spending money for me is so tied into being poor that the happy feeling I get from spending six bucks on a book is actually outweighed by the sick feeling I get for spending six dollars on anything, which is why I only buy books from authors I already know and trust to write a book I’ll read like seventy-five more times, thus negating the six dollars over a period of years.
Man. You should have seen me sweat the occasional latte, back when I drank lattes. I used to drive people up a wall trying to justify those three bucks.
Build in entertainment. And eating out. And frivolity. All of those can be budget lines! If you go to Starbucks every damn day and you can afford that, then that’s what you base your budget on. If you can’t afford it but you fucking love Starbucks, then see if you can get a smaller size, a cheaper drink, or do it every other day instead. Right? This is what having control over your money feels like, and it’s sweet.
(Oh my god, I’m hyperventilating at even the idea of going to Starbucks every day. Other things people do for expenses like that: keep a gift card they can recharge, so that becomes their budget. They recharge it once a month and when it’s gone, it’s gone.)
I have an Adventures budget line. I don’t fund that one every month; I fund it once a year. Once it’s gone, it’s gone, so I pay attention to it when I’m thinking about doing something cool with the kids. One trip to the zoo in Oakland would totally destroy that entire budget line; ten trips to the petting zoo here in town would leave us a few cents leftover.
Myth #5: I just wouldn’t do it, so there’s no point.
This might be the most valid one. And it’s not exactly a myth.
You might set up your budget, do it one month, and never return to it. True. But you may turn to budgeting out of an intense fear of not being able to feed your kid and discover that it brings you the most peace you’ve ever felt in a lifetime of anxiety about money.
I’m serious about teaching this shit in schools. I’d love to. Because it’s fun to think about the future, and where your money’s going. And because I’m making the least amount I’ve ever made and I have the most saved I’ve ever saved. All because I budget.
No. Really. I’m serious.
I make the least amount I’ve ever made, and I have the most in the bank than I’ve ever saved.
Because I know where every cent goes. I put it there. I tell every damn dollar what to do, and that’s what it does. No bills surprise me, because three years in I’ve seen them all, and saved for them all. I know exactly how long we can last at my current income level, and exactly how much I need for us to be in the black again.
This is fucking power, man. This is purchasing from a position of strength. It’s fucking amazing.
Budgets for the win, man. And if you want help setting one up, LET ME KNOW, because I am a budget nerd. I love this shit.