In 2016, I started a new job, and I started making way more than I ever have before. I’ve always been pretty conscientious about my spending, but when you start making 2.5x your old salary and you let your guard down just a teeny tiny bit, you’ve got a case of lifestyle creep on your hands.
While I didn’t go all out and upgrade my life (that would have been far more than just lifestyle creep!), there were small things here and there that I wasn’t as stringent about anymore. It generally came down to:
- Ubering + Lyfting way more than before (even at Pool/Line prices!)
- Eating out way more than before/less intention when deciding to eat out
- Shopping way more
- Travel + Splurging on some adventures I wouldn’t have before (no regrets on this one!)
I knew roughly these were the categories I was overspending in, but I really didn’t attempt quantifying by how much I was overspending in each category.
Letting My Spending Guard Down
After my boyfriend and I moved in together in February, the unexpected expenses (tsk tsk) of moving (security deposits, moving truck, and a few new purchases) combined with us planning our 2 week trip to SE Asia and splurging on a super cool 2 day caving adventure in Vietnam combined with me owing the IRS $20,000 in taxes from the 5 months I was doing contract work the previous year all came to a head.
The issue was the entire month was kind of a wash due to lack of upfront financial planning and saving. It was sort of the perfect storm. I did have the money set aside for the taxes, but I didn’t have any money set aside for my move or my vacation. But the bigger issue was that it trained me to believe I was in an “exceptional” period of spending.
Except the spending didn’t end in February. It started trending a little lower, but I was spending more than I ever had before. In March, I hardly cut my spending despite being in SE Asia which is a dirt cheap place to travel for 2 weeks. I lost track of my budget. I was on and off with Mint in the past and hadn’t quite figured out a total foolproof system, so especially during a time where it seemed the money I was spending was unaccounted for anyway, I stopped checking Mint. Huge no no.
The Breaking Point
I sort of assumed the spending would stop once all the exceptional expenses did. Suddenly my spending month after month was almost double! I ran month after month over budget. I was still maxing out my 401k, but I knew I could do better with saving. I was hardly saving more than I used to when I made so much less. After the third month of hardly transferring any money into my savings account, enough was enough.
I popped open Mint again. I revamped everything. I redid my budget. I redid my categories. I created areas of rollover I could dump miscellaneous spending into. I made sure if I spent any money, I had a plan for tracking it.
Budget To The Rescue
Let me show you a nifty graph Mint generated for me from my spending data for the last 6 months:
February – April was the time period I was glossing over my budget. May (the same month I started this blog for extra accountability) to July has been on point. I’ve gone on trips, and I’ve had exceptional friend visits and with all of that, my spending is within a couple hundred dollars of each month and always within the allotted budget. And I’m spending less in general too! More than 20% less actually!
How My Budget Helped Me
- It helped me quantify the categories I regularly struggled with. Once I quantified these, I could come up with a realistic cut back dollar amount. I could see which categories counted the most. And I was able to cut back in the categories that counted.
- It helped me make micro-adjustments as the month went on. I set up my Mint so I could literally look at how I was spending every day. It took 2 minutes. I think many of us review our budgets once or twice a month, and it’s not nearly frequently enough to take action on our behavior.
- It gave me flexibility. I stick with zero sum budgeting, but the issue with the zero sum budget is certain months you’re under in some categories and you’re over in other categories depending on what’s going on. Mint allowed me to easily realize “Oh, I’m going over in Restaurants this month, but I’m totally under in Shopping”. That way, I can virtually move $100 from Shopping to Restaurants while still maintaining the zero sum budget perfectly.
How has your budget helped you? And do you notice what are the types of things in your life that cause you to fall off the budget wagon?
Become A Budget Master!
I’m sure it’s obvious I’m a huge Mint fangirl (if you haven’t caught on after this post or the one I wrote about 6 Reasons to Budget With Mint). I honestly couldn’t have reduced my spending the way I did without it.
In April, I finally sat down and figured out a system. I thought about what caused me to miss my budget. I figured out what were the points of friction between me and tracking my spending the way I wanted. And I figured out a system that has been working for me ever since!
Since there’s a lot to setting up the perfect budgeting system, I’ve made a free Budget Mastery email course that I’d love for you to take if you’re just a little curious about Mint (also free!) or if you’re looking to explore an alternative way to budget and track your spending!
3 Reasons Why People Fail to Follow Their Budget
- They don’t track all their expenses
- They don’t make adjustments to their budget
- They don’t set realistic goals for their budget
In this course, I will teach you:
- A foolproof system for complete expense tracking
- How to setup a customized budget that fits your income, bills, and spending habits
- An easy system for quick budget adjustments and accountability