In May 1976, my mom enjoyed drinks with her close friend for $2.65. She paid $7.10 for breakfast with my dad in October 1980, and later that month she bought a card for Jenny for 80 cents. When she married my father in November 1982, she had $30,000 in savings. He had $30. My mother studied spanish literature at UCLA, and she taught at an inner city elementary school. Her eighth grade math class curriculum included how to balance a checkbook.
When my sister and I discovered our mom’s old notebook, we laughed at the careful account of every cent she spent during her 20s. We were young, and didn’t understand salaries, savings, and the connection between them. I wanted a pony, my sister wanted a BMW, and neither of us wanted to face the reality of living prudently. Then I went to college, started working part-time at an office, and found that I couldn’t tell you why each paycheck vanished within two weeks. I thought that I lived well within my means, yet I hadn’t saved anything.
So I started to write down every dollar in, every dollar out. Sure, my mom attended college and purchased a home during an era in which you could (potentially) support your education with a minimum-wage job, but I could still apply her wisdom to my situation. I found a lined journal in my desk, divided expenses into distinct categories, and started tracking every swipe of my debit card. Personally, putting ink on paper makes me feel more accountable and mindful, but an Excel spreadsheet or a budgeting app might work better for you. I began with certain restrictions, setting a target for groceries and trying to stay within a range for entertainment and personal expenses. I observed my spending habits for a month or so prior to setting limits, so I wasn’t imposing unrealistic restrictions (on necessities).
When you’re tracking every dime, it sometimes gets embarrassing – I initially included drinks under “food,” and spent over $400 on “food” when I had budgeted $240 for the month. I wasn’t pleased, and now I remember that feeling whenever I order a beer, and haven’t gone over my food and alcohol budget since. Looking at my spending records, I saw where I clearly needed to allocate more of my earnings, and where I could slash unnecessary expenses. A “financial diet,” to borrow TFD’s wording, is no different from any other diet— you can’t count calories for all your meals except the snacks, and then wonder why you aren’t losing weight. You have to fully commit.
I tracked my spending religiously, à la my mother in the 70s and 80s, and I realized I was good at imposing discipline while buying food, but spent too much on clothes. I always pick the wheat bread that costs 40 cents less, and I make coffee at home. I cook nearly every night, and pack lunches for work. But I dropped $219 on a Scotch & Soda jacket in May 2014. I’ll walk three miles instead of paying $2.75 for the subway, but I walked myself to a $73.15 haircut in June 2014. We all have different priorities, and I needed to reevaluate mine.
I also realized that while I adequately budgeted for big chunks of living expenses, like groceries, I forgot that little supplies add up. It sounds obvious, but shampoo doesn’t buy itself. Toilet paper runs out quickly, and that box of tampons won’t last forever. You have to keep these things in stock. Another area of under-budgeting was transportation. I bought a bike almost two years ago, and I ride around New York as my main mode of transportation. Before I honestly assessed my budget, I thought of biking as “free.” But, that’s not as true as I expected. I had to replace a broken chain, and fix the kickstand. Also, I’d take a cab in an unpredicted snowstorm, or refill my subway card because I couldn’t ride my bike in 95 degree heat to an interview uptown. And every time, I’d be taken aback by what I spent on transport. Last July, I had three flat tires in one month, and each cost about $18 to fix. My bike is not a $116.50 unlimited Metrocard, but it’s also not free, and I need account for it in my monthly budget. I learned to include a larger transportation allowance for bike repairs, and occasional subway rides.
Finally, I learned to expect some “unexpected” costs. Life doesn’t consider your pretty pie chart budget, and suddenly your laptop hard drive breaks. Yesterday, my only pair of jeans wore thin and tore right across the butt. A ripped pair of jeans is a silly problem to whine about, but it is a recent bump in my tight budget. Medical bills and apartment repairs are often non-negotiable costs, since I can live without a specific type of pants, but my front door has to lock properly. Something inevitably pops up each month for me. Truthfully, I’m still figuring out how much to allot for unexpected costs.
Writing down every penny passing through my wallet forced me to take a realistic look at my personal finances. Knowing where I do need to spend helps me create a sensible budget and stick to it. I rarely go over my budget in any given category now, and this encourages my savings progress. I used to feel so frustrated when I overspent on transportation, but now I’ve done the math, and budgeted in advance, which keeps my savings on track.
Last fall, I started saving fairly aggressively, depositing a portion of each paycheck into savings. This plan worked well for me, and I reached my goal for an emergency fund. I even had enough to road trip around the United States for a full month after graduation, visiting parts of the country I had only seen online, and indulging in beignets for the first time. (Full disclosure: I am incredibly fortunate to not have any student debt. I do not have to factor loan repayments into my budget, and this privilege allows me to focus on other aspects of my financial life.)
I still write down everything I spend and everything I earn, but I slip up occasionally. When I moved around the block this summer, the stress overwhelmed me. I couldn’t keep up with calculating costs and it felt like IKEA ate my bank account. But I got my budget back on track, and I am slowly saving up toward shiny new dreams, like expanding my emergency fund and working for a ~future dog fund~. Writing down every single expense makes me so much more aware. In the 1970s and 80s, my mother budgeted meticulously, and was able to save for our family, before she even knew she was going to have a family. While inflation rates may have changed, and school curriculums no longer teach us how to balance a checkbook (they should), the principal of jotting down expenses in a notebook will, in my opinion, never get old.
Bridget is an editor, writer, and art person. She lives in the Lower East Side and will adopt your unwanted plants.
Image via Pexels