4 Things I Learned From Sifting Through 5 Years Of Budget Spreadsheets
Over the years, my sister has applied her professional training in museum studies to archive family photos. Because I’m not into haircuts, makeup, or clothes (I have other spending habits to keep an eye on), there’s this uncanny effect where after I turn 16 or so, I kind of always look the same in photographs while everyone else around me grows and changes. I know I have evolved, drastically, over the almost two decades since I reached my adult height. But how will history know? What record is there of my life and growth?
Weirdly enough, the most detailed record of my adult life… is my budgeting spreadsheets. They’ve kept a detailed account of not only my daily activities but also how I’ve learned to take better care of myself and become a responsible adult that I can respect and trust.
As we step into 2020 and I take this a trip down Money Memory Lane, certain themes emerge, and with them tips that I hope you can apply in your own life.
1. Getting started with a little help from your friends
Where does this archive of my life begin? As is often the case, this journey was not something I started all on my own. When I got out of grad school and was at my first career job, I felt completely incompetent at work and was dealing with independent finances for the first time. I’d been with my boyfriend for seven years. We had the kind of intimacy where I felt no shame around my adulting failures (something I didn’t feel with anyone else at that time). When I was struggling to feel in control of my finances, I just openly asked him where the hell I should start.
He shared a Google Sheet with me with his own finances. There was no judgment toward me and my ignorance, and no arrogance on his part. He matter-of-factly walked me through how he monitors his spending and earning, sets up the spreadsheet formulas, and I was able to build a template of my own.
My own attempt only lasted about 4 months — the statistical average for keeping a New Year’s Resolution. Nevertheless, I think the essential lessons of managing money stuck with me: track everything you earn and spend, calculate the difference; know where your money is going. Even though I didn’t keep using this particular format, I kept the core functions for years to come.
TIPS: If you’re lost in your finances, don’t be afraid to ask a trusted loved-one for help. And if you feel like you’ve learned some financial life strategy that works, be willing to talk frankly about it with people in your life.
2. If nothing else, automate
After the initial shared spreadsheet, there’s a long gap where I did no financial tracking or budgeting. It’s not surprising that this gap appears during the period when I was losing my mind at work and being reckless with my romantic life. I ended up ending the relationship with the guy who sent me that initial exemplar budget, my college sweetheart and best friend.
This was the period when I realized I was going to have to rewrite the story of what kind of person I am and what kind of life I was going to live. I had real soul work to do and I did not have the emotional energy to look closely at my finances.
However, because I had a job that paid well and offered a retirement account (including matching contributions), I was still building my financial health on autopilot. I’d also set up automatic payments to a savings account at a separate credit union (where I’d have to physically show up to withdraw my money) for a true emergency fund. In the 5 years I was in NYC, I put away $10,207 in savings and earned $21,919 in a retirement account. It only took a couple days of mental clarity to do this life admin work that earned me thousands of dollars during the years I was putting the pieces of my life together.
It takes me a while to open up about my personal life, so the breaking up was already drawing to a close when I finally told a friend. Her first response: “Are you okay? How are you paying the rent?”
The issue of paying my rent had never occurred to me once during this dissolution.
Because my boyfriend was paying off student debt while my parents had covered all my college expenses, I’d never asked him to contribute to housing costs. My rent was about half my take-home pay, $1,200 a month — a high percentage, but common in NYC. I lived in a large apartment, but on the very outer edge of the city, far from everything except work.
The friend who asked about the financial fallout of the breakup lived in a nice apartment in the coolest neighborhood possible (where she would always entertain friends graciously sharing the perks of the area, making the most of it). If she and her partner ever split, I don’t think her salary could afford that place.
I can’t really praise myself for financial savvy in choosing my housing situation, but in the end, living somewhere I could afford on my own income alone ended up giving me a safety net I didn’t know I’d need.
TIPS: If you have the opportunity, make your saving and investing automatic. And if you can, try to keep your biggest fixed expenses, like housing, low. Find ways to make your financial health resilient to the darker seasons of your life.
3. Spending patterns will change over time
When my current self reviews my past self’s purchases, I’m often bewildered by my old spending habits:
“How much did I spend at Bed Bath and Beyond?! And how did I carry that much home on the subway?”
“What clothes were you buying once a month at $100 a pop? You don’t even like shopping for clothes!” “I have no memory of these trips to the zoo. How could I have spent over $100 at the zoo?”
Some of these purchases that baffle me today are because I’ve gotten a little older and wiser. I now unsubscribe from all promotional emails telling me about sales. And I’ve learned the hard way that sites like Groupon Goods don’t always offer real bargains when the goods themselves are crap.
Other purchases seem foreign to me because I no longer need a lot of stuff. I don’t need to buy glass containers for leftovers, because I now own them, and I use them every day. I don’t need to buy fancy dresses, because I’ve already bought them and can cycle through them as formal occasions come up. I’ve gone through different phases of my life where I needed to spend money on different things. And that’s okay. I can be grateful to my past self for buying the items that improve my life to this day. And I can be proud that I’ve learned from my shopping mistakes.
TIPS: When you’re a young adult starting out, you might need to invest in items like kitchen tools and professional clothing. Try to make these purchases things that will last for years to come. Or, see if you can buy items used, or even get them free from a friend or family member who’s downsizing.
4. Labels and attitudes matter
I have a weird thing for giving digital files quirky names that amuse me. When I finished my personal spreadsheet, “the Tragic Treasury,” the following year I called it “Tragic Treasury Revisited,” followed by “Son of the Tragic Treasury,” and “Tragic Treasury Strikes Back.” It made me smile to think of a budgeting spreadsheet as an old serial adventure film from the 1930s.
But when I ran out of silly sequel names, I came up with Oikonomia (ancient Greek for economy, literally “household rules”). The next year I borrowed a budgeting technique from a certain app and called my own (free) spreadsheet YHAB: “you have a budget.” My current document is called “For Future Me.”
“Future Me” is what I call the imaginary friend that I’m trying to look out for, or at least not screw over. It’s my cue to assume a wise and loving attitude toward my own long-term wellbeing.
When I review the names of these spreadsheets and how they coincide with the financial picture they represent, I have to say that the more positive the name, the more sound the financial health. Law of Attraction is too woo-woo for me. But the way I used to label my spreadsheets, I was giving myself a poor evaluation on money skills before I had any evidence to pass that judgment.
For example, as my spreadsheets evolved from a spending tracker into a budget tool, I was calling the difference between my spending and income DAMAGE in bold font, all caps. There was no reason to see my net income through such a negative lens, even during the months I overspent. I make less money now, but I no longer see budgeting as a glass half empty. And honestly, I think having a positive self image makes a difference.
TIP: A positive attitude alone won’t change your financial situation, but when you have the choice between self-deprecation and encouragement, it can’t hurt to talk to yourself with honesty and care like you would to a friend.
The next phase
My life, and my budgeting spreadsheets, are radically different from when I started using them consistently five years ago. I’ve since changed jobs and moved out of the city. My current job is a lot less stressful and I’ve found the time for exercise and therapy that keep me sane. On the one hand, I need budgeting more than ever to spend within my means and still find extra money to save. But on the other hand, I have the past experience and the mental clarity to be even more effective with my money management.
Today I swear by zero-sum budgeting and setting up spreadsheets based on four-week “months” and using that monthly bill funds in that extra 13th month as a mini emergency fund. I’ve also found that masquerading savings as a spending category, (since saving is spending money on that nice lady “Future Me”) has made saving more fun this year. I’m definitely looking forward to learning new strategies in the 2020 and the next decade.
Who is this person who waxes poetic about spreadsheets and the thrills of money life hacks?! Unlike the vacation snapshots of yore, my financial self today looks nothing like who I was financially 7 years ago. Now that I have the confidence to share my own money journey in public, I hope you can learn from my life lessons and wish you all the best in your next decade of caring for yourself financially.
Valerie is an adjunct professor in upstate New York teaching Latin and writing electives. When she’s not working or at the yoga studio you can find her on her porch binging podcasts.
Image via Unsplash