The B Word: Part 2
mirror, mirror on the wall(et)
If you’ve read The B Word: Part 1…
…then you know that you already have a budget.
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.
So awareness is the variable we control.
What I’m about to describe is a method that builds that awareness.
Now, it is a tough sell.
It’s not exactly fun.
It’s mildly time-consuming.
But it is both:
The only way I was able to get out of ~$53,000 of student loan debt
Something I do to this day
And it is…
[drumroll please]
…tracking every expense in a spreadsheet.
[cue womp womp womp sound effect]
I will try to break down why I think this method bums people out and then I’ll make the case for it anyway.
Three reasons you may hate this answer
Reason #1
Try to conjure an image in your mind of someone hyperaware of where their money goes. My mind immediately goes to Scrooge McDuck. For the uninitiated, there’s this old Disney series called DuckTales (with a theme song that’s a certified 90s bop) that stars Scrooge McDuck, a “Scottish-born American anthropomorphic Pekin duck,” based on Ebenezer Scrooge from Charles Dickens’ “A Christmas Story.”
Cartoon Scrooge, who is a literal billionaire, stops at nothing to keep his fortune in tact. He tracks every cent that leaves his wallet and has a vault full of gold coins that he swims in for fun:
“In the Dutch and Italian version, he regularly forces Donald and his nephews to polish the coins one by one in order to pay off Donald's debts; Scrooge will not pay them much for this lengthy, tedious, hand-breaking work. As far as he is concerned, even 5 cents an hour is too much expenditure.”
I think we subconsciously associate awareness of where our money goes with this Scroogey miserliness. We associate it with unattractive, anal-retentive, tight-wads. Who wants to be that way?
Reason #2
It takes time to enter every expense into a spreadsheet.
Reason #3
Tracking expenses means coming face-to-face with our money habits, and maybe some that we feel guilty about.
You know that sinking feeling you feel when you do some online shopping, then navigate over to your cart, see that huge total…and then you hold your breath and press purchase anyway? Or that feeling you get when you’re having a great time at a fancy cocktail bar, and then you close out, and then just looking at the total suddenly sobers you up a little?
Tracking expenses would mean looking at those numbers again. It would mean revisiting those moments of reckless abandon and accounting for them.
Ignorance is bliss, huh?
Reminds me of this lyric from this Arctic Monkeys song:
“Quick let’s leave before the lights come on.
‘Cause then you don’t have to see,
‘Cause then you don’t have to see what you’ve done.”
The anti-tracking money expert
During the two years I was paying off my student loans, an article came out in the New York Times. It was by a woman named Kristin Wong. Kristin wrote a book about money called “Get Money: Live the Life You Want, Not Just the One You Can Afford.” In the article she talks about how she decided to track her expenses for a month. At first, Kristin didn’t think she needed to:
“I figured I already had a pretty good idea of what my spending looked like. It’s not like I’m some shopaholic who can’t walk past a J. Crew without whipping out a credit card, and I know enough about my expenses to know when I have enough to pay the bills, and when I’m in trouble.”
But one day she decided to look at her transaction history and what she’d spent on various categories and vendors using the budgeting app Mint.
“In the previous three months, I’d spent a whopping $636 on Amazon alone. And what did I have to show for it? According to my purchase history, a few travel books, some shoes and a water pick. These purchases weren’t necessarily bad, but I underestimated how much they had added up.”
So she finally gave into this pretty boring, pretty self-conscious money habit I’m peddling today. She took out a pen and paper and started tracking her expenses.
“Spending is often the default for most of us — the first solution to any given problem. Need to get in shape? Buy a treadmill you’ll never use. Want to feel better about the way you look? Head into Bloomingdale’s and buy some self-confidence in the form of a new wardrobe.
There’s nothing inherently wrong with spending, but it can become so second-nature that we often don’t even realize we’re doing it, and it’s especially easy when you shop online.The simple chore of writing down every purchase, physically, with pen and paper, forced me to think before buying.”
Spending consciously
I’ve been meditating for the last decade or so. Most people new to meditation think that thinking while meditating = bad.
But the goal of meditation isn’t to stop thinking — it’s to be aware that thinking is taking place when it’s happening. It’s to reduce the amount of time between having thoughts and noticing that you are having thoughts.
Similarly, the goal of tracking your spending isn’t to stop spending — it’s to be aware of your spending when it happens. It’s to reduce the amount of time between spending and noticing what you’re spending your hard-earned money on.
Allowing space for awareness and reflection after a purchase actually helps you create awareness before a purchase.
Again, it’s not about not buying something expensive if it’s something you want. It’s about buying that thing because:
a) you have the money available to buy it
b) you’re sure you want to buy it, considering your other money goals
For me, tracking expenses isn’t about judging your purchases. It’s about aligning the goals of your present self and your future self. It’s like putting your purchases through your own b.s. filter. You’ll be able to easily justify this cocktail/water pick/Target haul to yourself when you take a second look at that purchase at a later point in time.
Can tracking your spending lead to miserliness and an over fixation on being frugal?
Yes. I think Dave Ramsey’s insistence that people tithe or give while paying off debt is pretty genius because it helps to inoculate against going the way of Scrooge McDuck. (But it’s still something to look out for).
Will tracking expenses mean you can never get a fancy cocktail again?
No. It will mean you will feel totally comfortable doing those things because you’ll have set aside money in the budget categories that correspond to those expenses you care about. Then again, if after some reflection you realize you don’t really like drinking cocktails — maybe drinking booze feels truly awful after 30 — tracking that expense will allow you to reflect on the purchase and whether it’s still worth it to you to keep buying cocktails in the future.
Will tracking expenses take time?
Yes, but I would argue that that’s a good thing. In my very humble opinion, taking a little bit of time to reflect on whether or not the things you buy align with the life you want to live is worth it, especially if you’ve never done it before.
I’ll keep diving into the specific features of my debt-payoff budgeting system — and why they exist — in subsequent posts. I will also show you a sample month and some strategies that kept me on track.
Thanks for reading, and I hope it’s been a helpful ride so far.
-Bethel
ETC.
If your financial trauma were a person - HeyBerna
“The Buddhist monastic rules that advise renouncing liquor, renouncing sex, and so on are not pointing out that those things are inherently bad or immoral, but that we use them as babysitters. We use them as a way to escape; we use them to try to get comfort and to distract ourselves. The real thing that we renounce is the tenacious hope that we could be saved from being who we are.” - Pema Chödrön, When Things Fall Apart
“Whenever I see people defend the 40-hour workweek, I think back to this quote by David Cain:
'But the 8-hour workday is too profitable for big business, not because of the amount of work people get done in eight hours (..) but because it makes for such a purchase-happy public. Keeping free time scarce means people pay a lot more for convenience, gratification, and any other relief they can buy. It keeps them watching television, and its commercials. It keeps them unambitious outside of work.'
-Katie Jgln on Substack Notes