Budget Archives - Page 9 of 11

Your Obligations May Actually Be Choices

Wedding obligations bride costs money choice — *Here comes the bride… And the obligations.*

This is a guest article from Stefanie! She’s trying to find ways to stretch her budget in one of the most expensive cities out there, New York City. A graduate of New York University’s drama and psychology programs at the height of the financial crisis, Stefanie discovered the world of financial planning out of necessity. Thanks for sharing your insight!

Almost everything you spend money on is by choice. Yes, you have needs, but you choose those needs. Yes, there are expectations, but you choose which expectations you care to meet.

With the exception of taxes (and health insurance), you don’t have to spend money on anything. Yet, people say it all the time, “…but I have to buy…” But no one is forcing you to buy something. See, you have to recognize that you are the one choosing your spending priorities.

I hear a lot of the “I have to” justification of spending when it comes to social, cultural, and familial obligations. These obligations are typically a duty or commitment to which you feel bound, not something to which you are bound. This is an important distinction.

I know that my personal feelings of obligation and commitment fall on a spectrum. For instance, when invited to a friend’s birthday party, I don’t feel that I really have to attend, but it would be nice. With a wedding, I’ll start to feel more of that sense of obligation. The sliding spectrum continues, and if it’s my sister’s wedding, I feel completely tied, obliged to the occasion. But no matter how I feel about those events, I can’t unquestioningly commit to attending until I’ve assessed the monetary reality.

Let’s say my best friend asked me to be a bridesmaid. I would feel a strong sense of commitment, but not be able to accept until I understood the full financial implications. Would I be expected to purchase a dress? Accessories? Attend other bridal events? What would be the total cost? Now, if I were to assume an average, which according to weddingchannel.com is $1,695 to be a bridesmaid, I would have to decline regardless of my sense of obligation. Unfortunately, that’s a choice many people fail to see, and it impacts their future financial success. Their sense of obligation overtakes everything else. If you can afford it, fantastic! If you can’t, that could be downright dangerous.

The environment, society, and larger culture that you are a part of may harbor even stronger expectations. I’m going to continue to use the wedding industry as an example. It’s a relatable illustration of how we allow the sense of obligation to justify extraordinary overspending.

If I ever get married, there’d be a host of expectations surrounding the big day; especially, as I am part of a strong cultural group with deep rooted traditions. But as strongly as I, my parents, friends, and community feel about those things, the thought of spending $28,400 (the cost of the average wedding in 2013) on one day feels exceptionally wasteful. The funny thing is, a lot of people would agree that the number seems insane, but when they get down to the actual planning and fulfilling the requests of mom, dad, grandma, the girlfriends, the church, etc., suddenly the spending seems justified. Meeting expectations of others, regardless of how impractical, overtakes sound financial decisions.

My challenge to everyone, and to myself, is to never use the phrase “I have to” when it comes to spending my money. At times, I may feel a strong sense of commitment to myself and others – feeling obligated, but at the end of the day, the things I spend on are my choice. If we all accept that truth, perhaps we’ll all be a bit wiser about weighing our financial reality against our sense of obligation in the future.

Have you ever felt obligated to participate (a potluck, wedding, etc.)? How have you dealt with it? When do you feel you can choose something?

The Debt Breaking Point: A Student Reforms His Budget

By Frugaling 5 Comments

Budget College Graduate Student Loans Debt — *If your budget looks anything like this truck, you’re in trouble*.

As a student, we are presented a nearly blank check in the form of student loans and financial aid packages (aka, more student loans). It can be hard to resist taking out more than you actually need. But once you open the intravenous drip of federal funds, it can be hard to quit it – hard to reduce your liabilities.

A close friend of mine confided in me that he was broke. The credit card debt had taken over. It wasn’t supposed to work out this way. He had student loans, but he knew better. Something had happened; sort of inexplicable, really. His expenditures soared, but the income was stagnant.

After realizing his budget couldn’t right itself, he scrambled to find help with friends and family. Fortunately, they supported him financially and he’s been fixing his broken budget. The following are some excerpts from our conversation (via email), as he’s learned a lot about what drove him to this level.

Romantic relationships and money

Our conversation ran the gamut, but for a moment, he focused on the impact of relationships and money. Implicitly, there’s a pressure as man (whether there should be or not) to treat and offer to pay – to be a provider.

I like the thought too about expectations, the impact on relationships (if one partner has to suddenly cut back). Part of my expectation (related to gender role socialization) has made it tough for me. I’m so used to being able to buy nice things for Susie, to pay for her dinner, to treat her to nice surprises (fuck, even for little things like buying flowers).

He ran out, and in sharing this with his partner, she was surprisingly accepting, supportive, and helpful. It can be difficult to admit budgetary defeat, and the longer it goes unnoticed, untamed, and denied, the deeper the hole can become. Here are some things he learned from confronting and sharing this realization:

…She’s been great about the whole thing. I think she’s honestly relieved a bit. She’s been much better at being frugal than me (more self-disciplined and better at handling money) from day one. I think she’s been very aware that marrying me means joining with my maelstrom of ego-driven impulse buys, not effortfully considering the true cost (long term) of my purchases, whether I can afford things in reality, and my staggering student loan debt.

Dinner Budget Student Loans Debt — *Shopping and going out can be easy – too easy.*

Last May, I realized I was sinking, and attempted to change everything because I didn’t want my debt to destroy a loving relationship. Seemingly, by confronting and asking for support from others (emotional and/or financial), the way back can be made easier. My friend decided he needed to start from scratch and analyze the budgetary gaps where money was disappearing.

The sink is shipping… How do I take back control?

For me, I had a similar experience to your 7 day challenge. I had so many little expenditures I didn’t realize (holes in the hull of my “finance boat” if you will). I had far less variety in food while I was getting the hang of it. I made rice & beans and had it for like 6 meals. I changed a few things up, would add cheese or salsa. I would wrap it in a tortilla or just have in a bowl. And I would intersperse a McDonald’s dollar menu purchase to balance it out. But it was tough feeling like I’d failed. Tough having to tell myself no, you can’t have it. I think it helps knowing I can’t “cheat” when I have these either-or decisions to make.

As he traveled through the joys of cutting back and realizing what needed to go, the budget was pretty clear; all or nothing, he had to change. The spending couldn’t be sustained. The credit cards were maxed. The student loans were tapped.

When I had literally $0 mid-way through December, I started to realize what had to be done. And magically, I was able to change my expectations, get a roommate, cancel many unnecessary things (gym membership, no more buying expensive proteins, no more consumer reports, got Comcast to lower my cable bill, etc). I’ve been able to set up a budget and stick to it. I’ve been able to track every expense, because I finally HAVE to do this. Years of attempts and failures, but finally having “skin in the game” lead to success.

Changing, fixing your budget is more difficult than it sounds

To spout out the mantras and trite cliches that simply say, “Change your budget to take in more than you spend,” can sometimes be more difficult than it sounds.

Adjusting my budget wasn’t a small change, it’s a giant lifestyle change that’s hitting nearly every area of my life. I needed to change my workout routine since I cut my gym routine. I have to get a roommate and change my living situation. I have to get used to rarely eating out. I have to change leisure time since I can’t really afford 20$+ to take Susie and me to the theater. My choice was to bottom out with no money in May again, or finally get my shit together. And for now, I’m on the get your shit together path.

Like many who’ve participated on this site, asked me, or debated online, the line between frugality and simply stingy/cheap is sometimes a gray area. Being cheap can sometimes elicit a value question.

A big question a lot of this leaves me with is how to be frugal without being cheap. I think there is some overlap, but that they are different. Frugal to me means cutting back, often not being fully satisfied at the reward of more savings. Cheap to me often reflects a self-interested style of frugality. In my mind, I think of friends who would leave little to no tip at restaurants, try to get everyone else to pay for them, continually try to ask “are you going to finish that.” As I’m making huge changes, maybe I’m trying to find a way to stay congruent with my values in the process.

By sharing my friend’s hard lessons learned and insights along the way, I hope it gives you a window into a world. What you do with that window is yours.

Special thanks to my close friend and confidant. Really appreciate being able to share your growth and story with my readers. All names have been changed, but you know who you are!

Becoming A Runner Saved My Budget

By Frugaling 8 Comments

Kali Hawlk is a freelance writer and blogger with a passion for helping twentysomethings learn to manage their money and live well on less. When she’s not out on a run, she blogs about personal finance and more at CommonSenseMillennial.com.

Although I hate to admit it now, the truth is I used to be far from frugal. I frequently gave in to the desire to accumulate more stuff, material things, clutter, and junk. Remarkably, I never went into debt, but I certainly didn’t have anything left over at the end of each month to save. I coveted what other people had that I couldn’t afford.

Kali running article — *Photo: Kali with husband*

I was miserable without what I thought I had to have, but even when I went on a shopping spree, the happiness was quick to fade. Before the day was done, I would be back to being bored, sad that I didn’t have what someone else had, or feeling bad about the way I looked and wondering when I’d have enough clothes to make me feel good about myself.

I used shopping and spending as a cure for boredom, a way to relieve stress, and to improve my mood and confidence. Unfortunately, at the time I didn’t understand that I was choosing a really bad coping mechanism for dealing with my problems.

I wish I had some sort of financial epiphany that made me see the error of my ways (it would be a fitting story for a financial blogger with ideas about what twentysomethings should know about money). But what turned my spending around – and what ultimately saved my budget from being annihilated every month – was a habit I gained: Running.

It was this simple activity – something that we’re all born to do – that allowed me to kick the comparison habit, stop wanting what I didn’t have (to start appreciating everything I already had), and helped me develop a greater self-confidence. Running gave me a purpose I didn’t have before.

Suddenly, every afternoon I had a task to complete; I went for a run, cross-trained, did strength training, or took a rest day and went for a walk instead. A less-than-stellar season on the high school track team that ended in multiple injuries and embarrassing showings during competition left me feeling as though I had something to prove, so I was extremely motivated to work hard and succeed.

Becoming a runner made me healthier in every way: physically, mentally, and fiscally. Though the physical benefits were an obvious plus, I was surprised when I realized I had made positive financial changes, too. I quit going shopping for crap I didn’t need. New clothes didn’t make me feel confident; my belief in myself and what I could do made me feel that way. I started saving all the money I previously would have spent on more stuff that was supposed to make me feel happy, but didn’t.

Before I started running, I’d often feel drained and miserable. Becoming a runner made me feel energized, inspired, and motivated to work hard in every aspect of my life. I realized how much I had the ability to save, and I made a plan to stick with a strict budget and make the most out of my small income. I started setting ambitious goals and then throwing myself into making my dreams into realities. Without a doubt, I wouldn’t have found the drive to start up a blog, pursue a career as a freelance writer, and start making plans to quit my day job to travel full-time if I never found myself as a runner.

Now, when I am bored, I go for a run (or at least a walk) or work out instead of riding in my car to the mall. When I feel sad, I go for a run instead of sitting on my butt in front of the computer for a marathon session of online shopping. When I am stressed, depressed, or confused about something, I go for a run instead of lying in bed, staring at the ceiling and moping.

Whenever things are bad or not right, I go for a run and everything is okay.

What do you do to save your budget and reduce your spending?

Cut Costs On Your Daily Commute With These Gas Savings

By Frugaling 9 Comments

Gas Savings Commute Russia Gif — *At least your commute isn’t this bad*

This is a contribution from Syed of The Broke Professional! He runs an up and coming personal finance site for working professionals. On top of that, he’s a practicing doctor. Thanks for the article, Syed!

Cars give you the freedom to go wherever you want – anytime you want. It’s a climate-controlled environment, built for listening to music and rocking out. But, convenience has a cost – cars are no exception. Car insurance, maintenance, depreciation, and gas can quickly devour a healthy budget. Luckily, there are some easy ways to save some money when filling up your tank.

Drive slower

As with most things in life, the middle ground is usually the right way to go – conserving gas is no exception. Most modern car engines work most efficiently when cruising at 55 mph. Going any faster will force the car to burn off more gas than it needs to, which translates to a lower overall gas mileage.

Plan ahead to find a good price

Use websites such as gasbuddy.com and/or billshrink.com to find and get alerted to the best gas prices in your area. You can also simply take notice of cheap stations when driving around and use them when you are in the area. But beware not to drive too far out of the way just to save a couple of cents off a gallon as the time and gas spent going to the station can negate your per gallon savings.

Consider a rewards credit card

The best way to use reward credit cards is to use it on stuff you already buy. Gas is a must. By using a rewards card, you’ll receive cash back and points on purchases you’d be making either way. Likewise, a lot of cash back cards offer rotating, 5% categories on gas purchases throughout the year. If you use rewards cards wisely, you should always be saving on gas purchases.

Check your tires

Tire pressure should be checked regularly, as it can fluctuate with outside temperature. It’s important to make sure your tires are filled to their optimum pressure not only for the longevity of the tire but also for your gas mileage. According to the US Department of Transportation, under-inflated tires waste about 5 million gallons of fuel every day. A poorly inflated tire has to work harder to produce the same speed as an optimum inflated tire, which burns more gas. Tire pressure can be checked by a simple pressure gauge which can be found at any auto parts store or at most gas stations.

Replace your air filter

The air filter is responsible for keeping out useless stuff from the environment such as dirt and bugs. These things can really hurt engine performance. If the air filter is in need of being replaced, that can affect gas mileage because the engine is not working as efficiently as it should. According to a survey by Advanced Auto Parts, a dirty air filter can reduce gas mileage by as much as 20%. Most filters should be replaced every 5,000 miles, but your cars manual should have the exact information.

Fill up late

It’s interesting to see when people start feeling uneasy about the level of gas left in their tank. Some feel the need to fill up when the empty light is on, while others like to fill up if half a tank is gone. For gas mileage purposes, it is better to fill up as late as you can, because having less gas will make your car lighter and more fuel efficient. Just don’t wait until you are stranded on the side of the road!

Ferrari Supercars Gas Savings Tips — *Photo: Axion23*

Consider a fuel efficient car or a hybrid

Many people drive cars that just are not very fuel efficient. Consider trading in for a fuel efficient vehicle and/or hybrid. ConsumerReports.com has comprehensive lists of which cars have the best mileage.

Drive less

Many people can’t think of another way to get to work or school other than driving. While not practical for everyone, some people can use services like public transportation, carpooling, biking, or simply walking to get to their destination. Not using your car helps the environment and your health.

Most people spend hundreds of dollars a month on gas. Enlist these tips for quick, easy gas savings! What do you do to save on gas?

Your Obligations May Actually Be Choices