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$1,000 vs $10: Seeing your money differently while on a budget

August 9, 2012

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.

Example budget:

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!

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8 Comments leave one →
  1. August 9, 2012 3:13 am

    Still working on mine, but it’s been getting easier. I like the way yours is set up.

  2. August 9, 2012 9:51 am

    We use the exact same type of budgeting that you guys do- a zero sum budget. It works great and we are good to sticking to it (usually.) I hope you have a great day!

  3. August 9, 2012 4:47 pm

    Thanks for the idea, I think I will give this a try. My Zero budget now just means I have no money to spend…lol

  4. MyMoneyDesign.com permalink
    August 9, 2012 5:28 pm

    I used to be a waiter, so I can identify with both your story and your picture! Think stained white shirt, faded black pants, bad black shoes, and random neck tie!

    I’ve always used a budget that I created in Excel (and is available on my blog). I don’t get quite as “down and dirty” as some people with my budget. My method focuses on setting goals, creating limits, and then living within those limits. Over the years I’ve became more successful at this because we’ve kept our spending mostly the same but increased our income. That usually helps out a lot!!

  5. August 13, 2012 8:15 pm

    I wouldn’t say I stick to a budget, but I have a budget. I think it’s good to know what you’re making and where it SHOULD be going.

    You may not have anything to show for the money you made back then ,but you learned a lesson that you may not have learned had you not made those mistakes!

  6. August 25, 2012 10:58 pm

    I use YNAB also! Been using since January and I still feel like I am constantly adjusting and readjusting my budget. But, I guess that’s how it is. Life does not fit in little excel boxes like the way you want it to!

    • August 29, 2012 3:55 pm

      Totally! We have to occasionally call emergency budget meetings when things come up, but it all ends up working out somehow.

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