Here’s a quick snapshot of my current monthly budget goals. I really like using percentages as a guide for dollar amounts rather than just assigning a sum of money (an idea I first saw on Bargaineering). This helps me keep my spending on non-essentials in proper proportion to the essentials which take up the bulk of my income.
Debt includes minimum payments to my three consumer credit cards. Health and Beauty includes my gym membership, a monthly subscription to Birchbox, and, until this month, my birth control prescription. Loan should actually be plural, since that reflects what I’m currently paying on my student loans. Meals refers to what I spend eating and drinking out with friends (as opposed to Groceries); Recreation includes what I pay for my Disney park pass, and maybe $20 to spend on whatever comes up. Transportation is for gas and insurance. Utilities and Rent is where I’m really lucking out – my rent includes water, electric, and internet, so my Utilities are my phone, Netflix, and Hulu.
Are there things I’m accounting for as Needs that are really Wants? Sure. Would I see faster results by doing a full-on Spending Fast? Without a doubt. But at this point in my life, I need to do more than simply cut all of my Want spending down to zero. That would reinforce the sense of deprivation that I already occasionally feel, which for me, causes either impulse buying and overspending, or withdrawal and isolation in my social life. The cycles of deprivation and indulgence apply to every kind of consumption, not just overating.
What I’m looking for instead is a sense of balance within my budget and my life.
Before I analyzed my income/expense relationship this way, I was simply giving myself
lots all of my leftover cash as recreation/eating/drinking/shopping/whatever money. Over the summer, I was spending about 18-20% of my monthly income at restaurants and bars!
I’ve had to deal with sudden changes over the past year (giving up my side-hustle of teaching, and setting up a new solo household in the face of divorce), so I allowed myself a few months of flat out spending. The deprivation that I felt over the loss of my relationship, my dog, my home, my life, and my future made me feel like I deserved to indulge in anything I wanted. But I know throwing away 18-20% at restaurants is not compatible with my long term goals of paying off all of my consumer and student debt.
Honey Smith over at Get Rich Slowly perfectly elucidates the kind of balance that I’m seeking – right now it’s not just about spending less. I could cut my Wants spending down to nothing, but I’d definitely be spending more nights at home, and at this time, that would be terrible for my mental health. I need to be social because, in the words of my counselor, I have unlimited capacity to play on my own. I’m an introvert who could (and sometimes does) spend hours working on some project in front of the tv. I’m seeking a balance between spending enough money to stay socially active, while not venturing into overindulgence territory, be it food, drink, or just things. In other words, I need to make my cutbacks not feel like deprivations. This is how those little luxuries help.
Certainly, the price of these little luxuries add up. However they not only enhance my recently upended lifestyle, sometimes they actually help me reign in spending in other ways. Netflix and Hulu have been my cable substitutes for a very long time, and I don’t even consider them expendable any longer. For the cost of one tube of mascara at CVS, I get samples of high-end cosmetic products in the mail every month with my Birchbox subscription. The little surprise boxes keep me from impulse buying cosmetics at the drugstore because I know I have better quality products coming in the mail. The Disney Seasonal Pass probably seems like the most extravagant luxury, but honestly it’s a bargain. The one-day one-park ticket is now close to $100. For under $300 annually, I have access to all four of the parks at all but the busiest times of year (and who wants to go then anyway). I live very close to the parks, so they become my go-to recreation when there’s nothing else going on. Essentially, with the pass I’m simply subsidizing the bulk of my recreation in one fell swoop. (And yes, it is possible to go to the parks and spend little or no money inside.)
For now, it seems I’ve struck a good balance. There are still some kinks to work out with this budget, but it’s enabled me to enact several Buy Nothing days each week without making me feel deprived of anything. And that’s something I can raise a glass to!