The B Word: Part 1
"late Middle English: from Old French bougette"
Budget.
Just say it out loud and feel the sound of it in your mouth.
Bu-dget.
There’s something about that second syllable – “dget.”
Sounds forced and awkward.
Move your tongue a bit forward and flatter in your mouth and you’re saying “shit.”
I asked a friend recently what words come to mind when she hears the word “budget.”
“It’s not a word,” she said. “It’s a feeling. Anxiety. My stomach drops.”
Before I get into the specifics of the budget I used while paying off my student loan debt, I want to take a moment to acknowledge the people out there like my friend.
I want to hold your hand and say: I get it. And I’m going make the case that a budget — despite its terrible, terrible name — is a useful, even freeing, tool.
You already have a budget
My first job out of college was at an association management company in D.C. My boss there, Doug, would tell me I’d need to make friends with budgets some day. I think it was his way of telling me that in order to move up in the company, I’d need to become familiar with them.
But I remember expressing to him how repulsed I was by budgets. I was 22 and I’d spent my adolescence believing I wasn’t a “math person.” Budgets felt intimidating and restrictive and unappealing in every way.
It was only later that I realized that – whether we like them or not – we all have budgets.
We all have money coming in and going out of our bank accounts.
We all have categories of spending stretched into different directions.
The only thing we control is whether or not we’re aware of how that money flows.
At 22, I didn’t have to be aware.
Even though it didn’t feel like it at the time, my life at 22 was quaint and privileged. I made $35,000/year (about $48,000 in today’s dollars) at that first, post-recession job. It wasn’t much to actually live on in D.C. at the time.
But I didn’t live in D.C. I didn’t pay rent, or have car payments.
After graduating, I moved back in with my parents in the VA suburbs and commuted to work with their old 2005 Altima.
(My parents were more than cool with this arrangement. In their culture, kids don’t live with strangers — they stay at their parents’ house until they get married. Even though I felt external pressure from the culture to move out and make it on my own, I felt the opposite pressure at home).
The money that I earned at my first job…I really don’t know where it went! I bought groceries, gas, a gym membership. It was an era of total opacity and ignorance.
It was the luxury of not having financial pressure that drove my willy-nilly money ways at 22. But even after I got my first job in New York at 25 — making $12k more — the feeling was the same. Money came in, money came out. I made sure I covered rent, and then, who knows where the rest of my paycheck went.
I do know that all the adults around me — parents, coworkers, mentors — would tell me that I should really to try to “save.”
The problem with just “saving” money
I’m sure whoever’s reading this has heard the same thing from their elders, even their own inner monologues.
What I didn’t realize until I started down this debt repayment journey is that there are three big problems with the advice to simply “save.”
1. It’s very hard to see just how much you’re able to save without becoming aware of your budget.
Until I started budgeting, I never knew how my “needs” and “wants” actually broke down. Clarifying exactly how much of my paycheck was going toward needs allowed me to see that I had a real choice about what could happen to the rest of that non-essential money. I saw my maximum saving (or debt repayment) potential for every month, and it was surprisingly high.
As an exercise, list off your essentials and how much they cost every month:
-housing
-utilities
-cell phone bill
-groceries
-transportation
Then take your monthly take-home pay and subtract your essentials.
If you just don’t wanna — let’s just look at an example:
Let’s say you’re Bob and your monthly take home pay after taxes is $5,000.
-rent ($1,200)
-utilities ($250)
-cell phone ($100)
-groceries ($350)
-car payment + gas ($500)
= $2,400
Bob has just over half of his monthly income, $2,600, to save or to spend.
If you stay unaware of your budget, you stay unaware of this balance between needs and wants. You stay unaware of how much money is actually passing through your fingers, and how much choice you have over where that money goes.
2. Telling people to “save” can very easily make people feel bad for spending money.
The general advice to “save” can make spending money on any “want” feel inherently bad. You could be saving that money you’re spending, after all.
But a budget allows you to give yourself advanced permission to use that non-essential money toward specific things you value.
Say you really love to go to the movies. You’d make a line in your budget for movies - say three a month. That movie money can’t be saved because it already has a significant job to do — feeding a part of your life that you value.
When you’re at the ticket counter, paying for that movie, you can do it with confidence instead of guilt because you’ve already set that money aside.
It’s hard to understand this without experiencing it, but I’ve really found that giving your spending dollars a job before you spend them leads to guilt-free, values-based spending.
3. Without having clear savings goals, it’s hard to conceive of how much to even save, and can make that money vulnerable to your own pillaging.
I’ve found that it’s hard to have a general savings account. It can be too tempting to dip into that general savings account because it doesn’t have a specific job.
When I first started saving that emergency fund I mentioned in my second post, I didn’t have a particular goal number in mind. I just figured a nice, round, four digit number would probably be good.
But after I started budgeting, and figured out my wants and needs, I came up with a real number I was aiming for: My “needs” x 9 (months). Concrete, with a clear end point. That felt surmountable to achieve in a way that the nebulous directive to “save” didn’t.
The magic of budgeting consciously is that it can help you both save more and spend without guilt.
A conscious budget gives you a fuller picture of what you can save and it gives you full permission to spend on the things you want. It can also help illuminate why you’re saving and why you’re spending, which can make both spending and saving feel more intentional and true to you.
…It just…needs a better, less anxiety-inducing name.
More on the b word — and how I used mine to pay off all of my student loan debt — in two weeks.
ETC.
-Why Does Everyone Feel So Insecure All The Time? - Astra Taylor, The New York Times
-“Suffering is part of life, and we don’t have to feel it’s happening because we personally made the wrong move. In reality, however, when we feel suffering, we think that something is wrong…
We feel that someone else knows what’s going on, but that there’s something missing in us, and therefore something is lacking in our world. Rather than letting our negativity get the better of us, we could acknowledge that right now we feel like a piece of shit and not be squeamish about taking a good look. That’s the compassionate thing to do. That’s the brave thing to do.
We could smell that piece of shit. We could feel it; what is its texture, color, and shape? We can explore the nature of that piece of shit. We can know the nature of dislike, shame, and embarrassment and not believe there’s something wrong with that…It’s better to take a straight look at all of our hopes and fears. Then some kind of confidence in our basic sanity arises.”
- Pema Chödrön, When Things Fall Apart
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Cheers-
Bethel