Budgeting Is Dull At First But With Time It Goes On Cruise Control
In 2011 I started thinking about budgeting, never actually started it. And in years past I had connected with Mint to see what I was spending money on.
By end of 2012 I was using YNAB and I’ll admit that it was tedious but at least easy and intuitive. At that time I had nearly 30 budget categories.
This post is to encourage you to budget if you are hoping to optimize your spending, because as time goes by and your experience grows, your savings blossom and life gets less hectic, your budgeting too will become easier.
You know the single most transformative change in my personal finances was that I had no clue how much money I was bleeding, the realization shook me up a little. I made my categories based on what I remember and every few days, months I had to add more categories… it took over a year before I finally was done adding new categories.
The reason I needed so many categories was simply because I had a ton of expenses. I made a list of my categories back then from what I recall:
- rent
- HOA dues
- property taxes
- utilities
- home maintenance/remodeling
- Amtrak travel
- car payment
- car insurance
- car maintenance
- car registration
- auto mechanic shop expenses
- medical license and DEA
- medical website subscription
- 2 magazine subscriptions
- cell phone
- computer repair
- food purchase for nurses
- groceries
- alcohol
- donations
- dining out
- clothing
- home cable/internet
- online website subscriptions
- gym membership
- tennis coach
- cleaning lady
- dry cleaning
- dental care
- personal hygiene/cologne
- Netflix/Pandora
- tech products
- contact lenses
- storage space
- CSA produce delivery
- entertainment
I’m not shitting you, that’s how I used to spend money. I never was the frugal sort. My nature is to be inquisitive, to try new things, different things. I used to love dabbling into different hobbies, wear fancy clothes and drive nice cars.
I still do, if I were to take the breaks off I would be buying some pretty fancy shoes, a muscle car and a big ass house with a ton of space to work on cars, weld, build furniture and have parties at. The difference now is that even though those things preoccupy my time they didn’t ad to my happiness.
Now I don’t own a car and buy clothes from a second-hand store, I live in a 350 sqft condo but I’m living it up, having a blast doing the things that I truly enjoy doing while slowly working my way towards my goal of freedom. Along the way I have reconnected with someone who always was wonderful with me so I’m sure together we will have even happier moments.
I’ve talked about frugal vs cheap before, can’t find the post now but it’s buried here somewhere in the nearly 300 posts I’ve thrown up. Some people are naturally frugal, some are just plain cheap and others, like myself, are hardened spenders.
The reason I push budgeting is because it’s such a 4-letter word. Having to sit there and account for every single expense… but how can a person achieve a specific financial goal efficiently without budgeting? How can you achieve your desired weight without counting calories?
By BMI is below 25. After many years of keeping track of it, and because I’m also one vain mofo, I can guess my weight fairly accurately. I no longer need to count my calories. I know that the day I polish off a whole pizza will net me some positive weight and so the following day I will cut back on what I eat to maintain my weight. It’s intuitive and I can actually feel it. I don’t need to keep track. Interestingly I also am very in tune with how I feel, as my weight goes up in an unhealthy fashion I feel more groggy, I think slower and my mood drops.
Dare I say that I’m the same way with expenses? Sure, fuck it… I, Dr. Mo, have finally reached a point with my expenses that I have a predictable sense of what my expenses will be for the month, what my savings will be and whether I’m on/off track to reach my financial goals.
I don’t care if I’m getting on your nerves, this shit is important to hear. If you have a specific financial goal or a goal that requires a dollar figure then you owe it to yourself to plan it out and in order to do so you should consider budgeting.
My decisions making process has become less complex. If all of a sudden I start jonesing for a big-ass house with a pool, centrally located with new appliances and a 2-car garage then I know exactly how this new expense will change my financial picture. I have been budgeting so I know exactly how much I spend, I know exactly how much I’m able to save and I know how much this move will affect my financial goals.
The title of this post is that budgeting gets easier. I say that because as you learn to budget correctly you start becoming more in tune with your expenses/income/investing. After a few months you no longer think of your income as money coming in and your expenses as money going out. Instead you start shifting your expenses/income to achieve a more important goal… financial freedom.
I have asked several colleagues how much they make, how much they keep, how much they save and how much is contributed for them on their behalf by their medical group. Few know the answer.
That’s why I boast about YNAB so much, it changes your thinking when it comes to your money. Of course, deciding on what your goal is in life when it comes to your financial freedom is up to you. You could probably achieve the same with a spreadsheet, don’t see why not, as long as you follow the system as YNAB.
Perhaps more important, when you decide to start budgeting it’s something everyone in the household can agree to. YNAB’s system is so smart that it forces you to work with what you got. If you are making $5k every paycheck then you have 5,000 soldiers to assign to your goals. If you fuck up and overextend in one category you will need to pull from another to cover your losses… for you pacifists just think of them as 5,000 rooks heading out to protect your king.
I still budget, YNAB and I have been going strong for some time. It wouldn’t be hard to go on cruise-control and I’d probably do fine. But a good platform will keep you on track even when times get rough. Once I reach all my financial goals I might stop budgeting.