Planned, principled spending.

[oak]

Hey!

Thanks to my contingent job, my finances will be fairly stable for the next month. I am really grateful for my income. I have struggled with underearning for about ten years.

Underearning and overspending have been a terrible burden on me, particularly in the years before I started to get help.

But!

There are two ways to get into debt: underearning and overspending.

Now, that I have some money to work with, I want to be wise with the income I do have. I am not getting rich, but that is no reason to continue to act and be poor.

Three years (2009 to 2012) of being working poor taught me a healthy frugality.

Here, in this thread, I will document my efforts to wisely channel the out flow of my income.

I dearly want to use principles and values. And have fun.

I want to meet all my needs, and strategically meet my most desired wants.

My desires include beautiful clothing (noticed I didn't say "expensive": a man can shop at a discount store, consignment store, and thrift store and look gorgeous), one or two fancy meals a week (perhaps $10), and dancing (I can fake my way through ballroom but must admit to being a very graceful swing dancer. I am a very strong, confident lead.).

If you will indulge me (and dare I hope for kind and encouraging accountability?), I will share my actions designed to reduce my mental burden.

I have five ways of looking at my current, evolving financial reality:

1. My current checking balance, on my phone app. This is the most important, at least that it stays over $0 (and $0 would be an okay place to be, as demonstrated below).

2. Tracking my spending (source: Jerrold Mundis): I write down every cent I spend. On Sundays I put it into a spreadsheet.

3. A few weeks into my spending-tracking, I can plan my spending (ie budge). This is where the fun begins. I had no idea budgets could be such a blast!

4. Zero-based envelope system for cash (source: Dave Ramsey). Before I get each paycheck I will plan (ie budget) my income based on my principles, values, desires, and needs. I will balance all this with the realities demonstrated in my spending-tracking. In practice I don't use cash much. I prefer debit, which is easier to track. But that's just me.

Ergo, if I have $20 in the envelope for food that week, I can CHOOSE to go get a $15 dinner on Sunday and leave a $5 tip IF I am okay with having $0 for food for the rest of the week.

(Of course I would never do that, but see what I what I am getting at about being clear about my choices? And living by them?)

5. Check registry for debit. Me and credit broke up in 2006 when I joined the blessed Debtors Anonymous.

Nowadays, many transactions are de facto easier/necessary to use as debit. For me, debit is de facto cash. Since I trained myself to track each cent spent, it is easy, natural, and fun to write down each debit expense in my registry. If I forget (and I am human), the transaction will immediately come up* on my phone bank app.

(*Except gas purchases, which take a few days.)

Needless to say, in the bad old days of 2006 (shiver):

I did not know what my bank balance was.
I did not know what debit expenses had cleared.
I spent money on shit I didn't care about.
Heartache. Burden. Guilt, shame.

Nowadays, in these happy days, my goals and dreams are:

Live (read: spend) according to my values.
Have crystal clarity about how much $ comes in and goes out.
Meet all my needs.
Achieve wants strategically.

So that is my plan. I hope you will indulge me sharing about my actions.

[manuel_moe_g]

Hi Oak,

Jesse Thorn has a blog http://putthison.com/ that is all about high men's fashion on a budget. More info on Jesse Thorn http://www.maximumfun.org/jessethorn

I really admire all you are doing. I hope there is a large component in your current life for compassion for yourself, because you deserve to treat yourself with compassion, because of your intrinsic worth and what you are able to contribute to the world.

All the best, cheers!

[oak]

Thanks Manuel Moe for your encouragement. I was afraid that this topic would be too narrow, and too detail-orientated to be of interest to anyone else.

Before I get to my first plan, a brief word to explain why $0 in the bank is okay, and even good.

$0 in my checking is fine, and even a goal, provided these two criteria are met:

1. I know all the expenses outstanding. That is, that my check registry and bank balance have no surprises, or forgotten entries.

2. I use a zero based spending plan. That is, my week's income should be spent on paper before I receive the income.

Although most times I won't be at zero: I'd like to have a prudent reserve, because one never knows. I could get an odd annual fee or somesuch. On the other hand, I don't want to use a prudent reserve as an excuse for a lack of clarity. Plus, I don't want to tie up too much money into such a "miscellany" category. I'd be more clear and honest to put it into an emergency fund.

Which leads me to my next delicious option:

Two of my highest priorities are smartphone and car insurance, per my job search when my current contingent job ends.

Since I track my spending I know my phone is $47 (prepaid, no contract, ergo no surprises) and car insurance is $49 (long story). Since I know they are due monthly, and they are a priority, I can plan the following options, as decided by *me*. (Feel the power in that last sentence? I do.)

1. I can plan the whole $47 into my upcoming income, ie once a month, or

2. I can split the $47 into four $12 weekly parts.

In the bad old days (which is as recent as this summer), I didn't have a plan, options, or power. I had to hope I could pay my phone. Sometimes I did, sometimes I didn't. So long as I continue to received blessed income, I want to wisely direct my outflow.

Update!

(More updates to follow this weekend as my planning, spending, and tracking continues to evolve.)

So I have spent my next check on paper according to my values.

On the kind advice of Manuel Moe, I have decided to spend some money on myself, tonight, to show compassion for myself.

Ergo, I went to the iTunes store and bought that fun. song "We Are Young" and of my heroes, The Black Keys. Of theirs I bought "Ten Cent Pistol", "Next Girl", and "Ohio" (they are from my hometown).

Tonight I have the option to purchase "Lonely Boy". I have the $1.29 in the bank, because I have earned that money. Or I could buy the song tomorrow, or perhaps give that money to watsi.org.

I am in the driver's seat: I am dictating to underearning and overspending, not the other way around anymore. Everything could fall apart tomorrow, but for today I am in control. I am making the decisions around here.

I'm the man in charge here.

[kitkat]

So good to read some positivity! I am definitely on board to follow your next step. As someone who is still loving pay cheque to pay cheque more or less, it's always interesting to read how other people deal with budgets. That and I love spreadsheets/charts like a weirdo.

That envelope cash thing is a great idea. I've seen it on budgeting shows and while I haven't use it myself, it does sound like it would work well.

What app are you using? I have Mint and I have been very happy with it. It tells me when student loans are coming out (uugghhhh) and you can make budgets on it, see where your money is going, and it also gives advice for people who use stocks and things. I'd recommend giving it a look. it really does help me spend less to see the charts.

Keeping that in mind, it is still good to spend some on yourself or you'll just get annoyed. I buy myself a coffee everyday and get takeout Friday and Saturdays, but I also have cheap lunches and eat breakfast at home, so treats sometimes are nice.

Good luck and keep us up to date!

[oak]

Much forum love Manuel Moe and kitkat!

I send vibes of happiness to you.

A quick update!

(btw, I use the words "budget", "spending plan", and "plan" interchangeably; they are the same, the companion to my spending tracking)

1. (pfft!)

That is the sound of my zero based budget for the week exploding, gently. In fact, I could have predicted it would do so.

On Thursday night I did a budget on an actual back of an envelope to be ready to spend it starting Friday morning. By noon Saturday I had bought things I needed and wanted (responsibly so, I did not overspend: I spent according to my values), buying things I needed that I had not considered in my budget.

Also, I lost the envelope that had my budget. (I decluttered on Saturday, which is an incredibly important part of my financial recovery).

This is solved by one of the many genius benefits of tracking my spending: my tracked spending will simply become my next budget.

Progress not perfection!

2. Much love, again to both Moe and kit: I consciously took your advice to spend money to love myself. I did so, and also realized that I need not emotionally overspend. Two examples:

a. On Friday I downloaded some music from iTunes. The Black Keys don't need my money, but I want to support them for bring me such joy. I download three songs, and had it in my budget to get more. I considered buy "Lonely Boy", but then decided I was happy at three songs. See, I used my values to make a decision, even though I had the freedom, clarity, and power to make the other decision. Next time I may well buy the fourth song IF I want to. I have reclaimed the power.

b. I eat frugally (but well) most of the week, especially by bringing my lunch to work. I do budget $20 a week for fancy meals (I find the word "meal" extremely grating, btw. It is like fingernails on a chalkboard to me.) Ordinarily I will spend $10 on an a meal of whatever I want: typically this is Friday night and early Sunday afternoon. It turns out that Saturday I went to Chipotle ($7.90) and was going to get something this morning, but I saw equally awesome leftovers in the fridge.

Thus, I did not spend $12.10 of my budgeted $20. Generally, my progress-not-perfection goal is to take that $12.90 and put it into a special savings account, an account that I will save for longer-term, specific goals. ie, I want a new laptop to replace my creaky old desktop for when I restart my job search next month.

3. My bank balance is out of whack with my check registry, but I know why, and to who, and by how much, to the cent.

I use a debit card to fill my gas tank, since I can't guess how much cash it would take. Also, iTunes doesn't post to my debit card right away. Thus I know I am really $25.89 and $3.87 down, though my bank doesn't show it. This lack of clarity is fairly annoying.

Of course, in the bad old days I had much less clarity about what had cleared, and I had to hope that I wouldn't overdraw my account. (Shivers)

I don't have to live like that anymore.

4. On a little lighter note, one of the ways I blew up my budget was buying a little attachment for my smartphone. My car's cd player won't play if it is hot outside, humid, or if my car hits a bump. During my long drive I'd listen to religious radio, which offers all sorts of triggers.

I saw this little attachment at the auto store, and bought it. It broadcasts my smartphone into a small-range FM transmitter. Thus I can find an unused FM frequency and listen to youtube. Fun!

5. I also spent money on an umbrella ($5) and items/clothes/accessories to improve my male beauty.

(Well, my male outer-beauty. My inner beauty, which is the far more important aspect of my attractiveness, has never been in question. But I do want to improve my surface appearance where I can.)

[stoptellingmetosmile]

These are such good ideas. I am in a financial hole too -- not because of credit, but because I have underpaid income taxes (I could either pay the taxes or the mortgage but not both). Being depressed on top of that doesn't help when it comes to paying bills, so I have a bill-paying service. I turn over most of my paychecks -- when I get them -- to the service and they send out the payments. I keep enough for groceries, gas and incidentals, and when that's gone, it's gone until I get another paycheck, but it isn't the end of the world. I also have about $200 in a lockbox that is strictly for emergencies (sick pet, car repair) and when I am feeling flush or come into some unexpected money I drop another $20 or so inside it. I don't count the money because I don't want to be tempted to borrow from it. It is also reassuring for me to know that if I ever wanted to splurge on something, I could. Knowing how long it has taken me to build the stash keeps me from wanting to spend it on something that will I won't even remember buying.