Last week a friend and I were talking over coffee. She said that she didn’t know how I could live on a budget, or afford to do all of the things that I do – like go skiing, play team sports, travel, buy concert tickets, and even save for retirement. She said that the few times she tried budgeting, she felt deprived and irritated, so she stopped (a feeling I could absolutely relate to). I told her that the only reason I can afford to do anything is because of budgeting.
Some people are just good with their money. They know how to spend less than they make, without having to use money tracking software or a big Excel spreadsheet – but not me. I’m bad with money – always have been (which is how I got into debt in the first place). And that’s why I personally need to account for everything that I purchase, as well as every dollar that I save.
It’s difficult trying to explain budgeting to someone without getting preachy. And for someone like my friend, who has never been able to successfully put together a budget, it can be overwhelming. It was especially hard because I’m not yet comfortable talking about my struggles with money with people in my real life. I tried to explain as best I could that being on a budget does not automatically mean you have to cut out every single fun thing you’ve ever done, or will do in your lifetime. It is about taking control, understanding where your money goes, and realizing what you value in life.
When I was in debt, I spent money I didn’t have because, like her, I didn’t want to feel deprived of anything. I wanted to experience everything, and have fun. Everybody else is in debt, so why should I be any different!? Whatever I couldn’t afford, I always found a way to justify the purchase to myself, and bought it anyway. Obviously I didn’t think about the repercussions … and then one day I woke up and realized the extent of the mess I had created. I was literally spending my future away.
My friend and I ended up chatting about how we live in a society where we want everything quick and fast and now. And the reason so many people are struggling with debt is because debt repayment is slow and cumbersome, sometimes exhausting, and very difficult for most people who are used to getting everything immediately. Instant gratification, right? Not so, when trying to get out of debt. But you know what’s weird? Since I’ve started budgeting, I’ve probably cut my discretionary spending by more than half, and I felt more deprived then – when I was spending money on whatever I wanted – than now. It is absolutely amazing how fast those little purchases add up (most of them I barely remembered buying). And at the end of the month, did I really appreciate those items that I had bought? Or could I have saved that money instead, with little impact to my life.
I used to absolutely hate the feeling of being broke. And I was broke. A lot. It was a desperate, extremely stressful feeling having to count the days until my next pay cheque. I always say that the turning point for me was when I realized I didn’t even have $10 to my name in cash or credit in order to buy bus tickets – and I had to ask my (then) BF of only THREE WEEKS to borrow some cash. I’m still mortified to this day about that phone call. And it was the motivation to avoid that desperate, extremely humiliating feeling that made me want to change. Understanding that I didn’t have to ever feel like that again was what made my brain click into a completely different mindset. As soon as I realized that budgeting wasn’t about deprivation, it was about empowerment – my entire life changed.
Instead of “I can’t afford Item X,” it became, “I am choosing not to buy Item X.”
Instead of being reactive and saying: “how did I spend $458 on clothing last month?” I became proactive by saying: “I know I have $100 to spend on clothing this month.”
It was about changing my mindset from letting my money control me, to me being the one in control. I decide where my money goes, and that’s a very liberating feeling.
So to my friend, I hope you get a chance to read this. I know I probably didn’t make much sense during our talk, but this how budgeting has affected my life in the most positive way possible.