Have you ever been on a budget or trying to save money, but then had a day where you just splurged on a shopping trip or a big impulse purchase?
Yup. I have!
I used to think that budgeting and saving were SO boring and restrictive.
The first time I created a monthly budget, I spent hours creating color-coded categories for my rent, bills, car payment, food and all the essentials.
And in two months, I managed to save $800.
But the day my account hit $800 was also the day it hit $0 again 🤦♀️
Here’s how it happened:
I was 20 years old and I had just moved out on my own.
I used to babysit for 30-40 different families in my town, so I had to keep track of every single dollar I was earning and spending.
Normally, I would start each month with $0-$100 in my bank account, and then work my way up to the total I needed to cover my expenses.
Once everything was paid for, I’d start the next month with nearly nothing in my account again.
I was living paycheck to paycheck.
But I wasn’t earning a low wage.
It’s just that I would spend any extra money I had on fun things like shopping and eating out with my friends.
That was until the day I decided I should be more ‘responsible’ with my money.
I sat down and created my budget – and I was excited to get started!
I was going to be a ‘saver’ not a ‘spender’!
But… I failed.
Because I made TWO mistakes with my budget (and these are mistakes I see a lot of people make).
❌ Mistake No. 1
I cut out all the fun and ‘non-essential’ things from my budget and my life.
No more morning cappuccinos from Starbucks.
No more meeting my friends at my favorite sandwich shop, Urbane Cafe.
And definitely no more shopping!
(Because I thought THAT was what it meant to be ‘responsible’ with money.)
After a couple of months on my strict budget, I was so bored… and I also had the most money I had ever saved just sitting there in my bank account ($800).
So when my friend invited me to go out shopping and have lunch with her and some friends in Santa Barbara for her birthday, I was SO in need of some fun.
Plus… I was in the mood to shop.
“Screw this!” I thought. “I have all this money that I worked so hard for and I deserve to have some fun! What am I even saving for, anyway?”
My budget? Out of the window.
Which brings me to…
❌ Mistake No. 2
I didn’t have any clear financial goals and I hadn’t assigned a purpose to all the money I was saving each month (something I talked about in my last email).
That’s why, that day in Santa Barbara, I spent every single penny in my account (AND added a few dollars to my credit card) buying beautiful things, eating out and having a wonderful time with my friend on her birthday.
Of course when I got home with multiple bags full of cute outfits and saw my colorful budget staring back at me from the wall, I closed my eyes and thought, “Oh crap… I spent all my money…again!”
You see, creating a budget isn’t the problem for most people.
The REAL problem is that we often believe that budgeting and saving means cutting out the fun ‘non-essential’ things from our lives – as I used to.
And it’s not your fault if you think that.
Because maybe that’s what your family, your friends, and financial coaches have been telling you you should do.
But my philosophy as a financial coach is that fun and joy are ESSENTIAL to our lives, and that your budget HAS to consider these in order for it to be sustainable.
So to help my clients create a non-restrictive, values-based budget, I always start out by having them think about and write down their values and financial goals.
Because for your budget to work for you in the long term, it has to:
- Align with the things you truly value in your life
- Be a facilitator that empowers you to reach your financial goals
- Make space for things that bring you joy
That way you’ll actually WANT to stick to it.
I KNOW you can do this. Because I’ve done it myself and now I help others do the same. Even when they feel overwhelmed or convinced it won’t work for them.
Next, I’m going to talk more about how to keep the fun and joy in your life while you’re budgeting, and share an exercise that will help you create a values-based budget (with ‘fun money’ included!).
I’ll share this with you via a free email series on finances – if you’d like to get these free finance emails with tips and tricks to actually make budgeting work for you, sign-up below: