$1,000 vs $10: Seeing your money differently while on a budget
When I was working as a waitress in college, I would get super pumped after I made a lot of cash in one night. One of the first questions that would come to my mind: What am I going to spend this money on? I would look at this wad of cash and have absolutely no self-control. I knew that there would be several other opportunities in the week to pick up shifts that would cover my basic bills: gas, food, school, etc. What’s the harm in spending a few night’s of work on whatever I wanted?
I continued this pattern of spending until the beginning of 2011. Let’s say I got paid $1,000 and that money was sitting in my checking account. It would be easy for me to blow $100 on an outfit, $40 on lunch and $10 for coffee within a few hours! I had $1,000 in my checking account so what’s the big deal, I would still have more then enough to pay for necessities after I go on my shopping spree. I would have a tendency to eat my money even back then, spending it on tons of coffee, lunch and dinner dates with my girlfriends. WRONG! DO NOT PASS GO! Now, I have nothing to show for the money I made back then and the crazy thing was that I was STILL in debt and spending like I had money.
Picture of a broke and in-debt waitress…hi mom!
The way Mr. BigTime and I budget is we sit down at the end of the month, calculate that month’s earnings and agree on how we will use that money the following month, until we reach $0. This means that every dollar gets a name, job, whatever you want to call it. It’s actually fun, I look forward to our monthly budget meetings (never thought I would say that) because I have an equal say in how we will spend our money and can figure out how I can eat more of it! Breakfast with a friend? Take it out of my recreation category. Need some new scrubs? No problem, budget for it! Need a new laptop? Figure out a timeline to save and pay for it with cash!
When you put yourself on a budget it allows you to demonstrate some major self-control. For example, if I get a $1,000 paycheck and have an upcoming engagement with a girlfriend, I’m going to look at that $50 recreation category that I have to spend. $1,000 quickly turned into only $50 and that COMPLETELY changes the way you think about spending your money. Before I would order an appetizer, drinks, dessert and pay for my friend……nowadays coffee sounds like a much more affordable social event to make my money last the whole month. When you change the focus of how you look at your money from what’s sitting in your checking account to the smaller budget categories you no longer feel like there is a lot of money to spend. Subsequently, your money ends up doing a lot more for you then you could even imagine, like paying off our car, student loans and mortgage. I NEVER imagined being able to pay off a mortgage by next year and it couldn’t have happened without our perspective change of money after we got on a budget. All of our friends who are doing it LOVE it! Try it, you will see.
We use YNAB as our budgeting tool, click here to purchase it for $6 off.
Questions for you: Are you on a budget? If so, what do you like about it? Is it easy? If not, what are your concerns about getting on a budget? Have you been able to pay off a large amount of money without being on a budget? Would love to hear your stories!