Do you get too restrictive with your money?
It's okay to loosen up and live your life. Well, within reason.
“I’m budgeting too tightly and feel disappointed when I overshoot my categories. Help!”
There are two possible issues.
You’re using the wrong budget! You should look into other budgeting styles to see what’s going to work best for you.
It could also be that the budgeting style isn’t the issue. It’s possible that you’re being too aspirational as opposed to being realistic about how much you need to spend in certain categories.
Go grab a few highlighters in different colors and print out bank and credit card statements from the last few months. Assign the areas that you overshoot different colors and start highlighting away. You can first look for patterns. If none seem to exist, figure out your monthly averages on this categories and see if you’re consistently off within a similar margin. You need to decide if you want to reallocate funds from other areas of your budget to give yourself more wiggle room in the categories where you tend to overspend.
Finally, remember that it’s okay for your budget to change over time. In fact, our budgets should evolve as our lives change. The budget I use now looks nothing like the budget I used a decade ago when I was 22. I was into a non-cash version of the envelope method and tracking every penny in my early twenties because quite literally every dollar made a difference. (Hello earning less than $25,000 in NYC!).
These days, I’m in a hybrid camp of zero-sum budgeting (assigning every dollar a job) and having a set amount I can spend literally however I want each month. Peach (my husband) and I both get our own money that is put into separate accounts each month. Call it an allowance or slush fund or fun fund, whatever, we can spend it in any way we choose! It helps release that pressure of a feeling restricted by a budgeting style and gives each of us some financial autonomy in our marriage. (And yes, that means less nitpicking at each other about spending habits.) This doesn’t just need to be an option for couples. You can give yourself permission to have a “fun fund” just because you like the flexibility.
Want other budget ideas? Here’s a video I did circa 2018 that talks about a few different budgeting styles.
Other helpful reading:
I’m afraid to save for fun stuff. It feels like I could reach other goals faster if I don’t. What are your thoughts on balance?
This question really spoke to me because I’ve been here. I’ve been you. I’ve been in this scenario. It took me a long time to figure out how to effectively give myself permission to spend (the aforementioned “allowance” money being one way). It also was important for me to identify the fact that I do have a scarcity mentality around money. My brain is wired to believe my money – especially income – could dry up any moment, despite all the evidence to the contrary.
I know it’s cliche, but in a lot of ways the pandemic really helped shift my mindset around living life while pursuing big financial goals. Everything fun that I love and used to splurge on like going to see plays and stand up, getting to travel and the simple joy of being with friends was all stripped away. Living in that deprivation for so long (especially living in NYC) really made me focus on the importance of being present, investing in the now, and enjoying myself along my financial journey. At the height of the pandemic, Peach and I actually started putting money aside into a savings account for “living it up” once it felt safe to do in-person activities. We wanted to be able to say yes to pretty much everything without stressing over our budget.
After getting vaccinated, I was back on planes to go visit friends and went to so many shows! I actually had a friend that I hadn’t seen in two years comment on how I seemed more relaxed about money.
“Revenge spending” (aka overspending once pandemic restrictions lifted) aside, I do believe it’s important to allow yourself a release valve. If you don’t allow yourself some level of fun and a few little indulgences, then the burn out is coming for you. The consequences of budgeting burnout and finance fatigue could result in a big swing in the other direction towards overspending. We aren’t designed to live lives of constant deprivation, which includes our finances.
One strategy is to give yourself an amount to spend monthly on exclusively non-essentials. It could be as simple as treating yourself to a lunch or dinner out once a month. Just give yourself some permission to spend on the journey.
Other helpful reading:
To recap:
Your budget should change as your life evolves.
If your budget feels really restrictive and you routinely overspend, it could be that you need to change the type of budget you’re using.
It’s okay to spend on enjoying life while also working towards big financial goals. It helps release some of the pressure!
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