My Two Cents

When I first thought about starting this blog, my intention was for it to be a supplement to a book I wanted to write.  "My 'Growing Up' book," I called it.  See, I had entered into the adult world (not the porn industry, in case you're wondering) a bit too naive.  I went from working a full-time job, living with my parents, and not having many bills to contend with to living on my own. 

I wouldn't change 99% of the decisions I made.  There were just some things that I wish I had known prior to my grand exodus from the island (which I still technically live on).  I thought that my tough lessons would benefit other people, so they wouldn't have to make the same mistakes, but I've sort of given up on the concept of a "growing up" book.  Too many people met me with too many confused stares.  I still want the message out there though.  So for any of you poor schlubs who actually read what I write, here are my two cents on my two cents.

1. Budgeting is the devil. 
Before I moved out, I worked out the math.  I made a list of every bill I would have: rent, food, phone, cable & internet, gas, electric, and student loan.  I made sure that this list, subtracted from my monthly earnings, still produced a positive number.  Savings, I thought naively. 

Before I begin on what was wrong with this list, I'd like to just note that insurance and transportation are automatically deducted from my paycheck so that never had to be taken into consideration.  Also, water and heat are provided by my landlord.

Now, problem #1 with this budget, as I quickly learned, was that I didn't budget for cleaning supplies.  And I clean my apartment a lot.  Fueled by nightmares about cockroaches, I keep my apartment pretty darn spotless.  (Organization is a totally different beast.)  Dish soap, Brillo pads, Tilex, Pledge, Windex -- I didn't plan for any of that.  I bought a vacuum, but that was pretty much it.  Obviously, you don't have to buy Windex every month, but a minimal allocation to a miscellaneous budget would have been better.  Maybe $5 to replenish cleaning supplies.  Not a huge mistake, but a mistake nonetheless.

Problem #2: I didn't budget for fun.  Here's a little tidbit for you: if you are single, you're going to spend more money than if you are dating someone.  Just a fun little fact for you.  When I moved out, I was dating someone.  We rarely went out, so I thought things would pretty much stay the way they were.  Shortly after moving out, I was single and was now going out and doing things and, unfortunately, spending money I didn't have.  Not a lot, mind you, but still money that I shouldn't have spent.  When making a budget, it is so absolutely important to be honest with yourself.  If you drink 2 beers every night, budget for that.  Don't move out thinking you're suddenly going to be healthy and cut back on drinking.  That's not what we do, so put a little bit away for the rainy, drunken nights to follow.

Problem #3: Things wear out.  Before I moved out, I made sure I had everything: plenty of clothes for work, clothes for hanging around, shoes, things I needed to be a person.  A year later, my entire wardrobe has been worn down to mostly rags.  I've walked holes into my shoes (and pants) and worn a hole into pretty much everything I own.  While this speaks volumes about the quality of products produced in our modern society, I'm still left with the dilemma of what to replace first?  Around the house I don't really care what I wear, but my work wardrobe is unprofessional at best.  But is it more important to wear nicer clothes to work or shoes that don't have holes?  Quelle énigme.  Still trying to figure that one out, but add about $100 to your miscellaneous budget just to be safe.

Problem #4: Sadness.  With such a tight budget, I've gotten very good at saying no to myself.  No, you can't have new shoes.  No, you can't go out tonight.  It's tiring to hear no so much.  When you constantly walk past stores and remind yourself that you can't possibly buy anything or get anything new, it's pretty depressing.  You do need a treat every once in a while.  Not every day or every week -- maybe not even every month-- but once in a while you need to say yes.  Tight budgets don't let you say yes though.  So add $30 to your antidepressant miscellaneous budget.

Problem #5: I need a freaking haircut.  Ugh!

2. Your credit card is not your friend.
Before I got my credit card, I saved money with every paycheck.  Why?  Because I had to have money in the bank to pay for whatever I wanted to buy.  Anything equal to or greater than my weekly check wasn't doable.  With a credit card in my pocket, I suddenly had the freedom to lay out money as I saw fit.  Want new shoes?  Buy them!  Want that new dress?  Buy it!  Want to go to Brazil?  BOOK IT!  My credit card made me a consumer whore.   I loved him and he loved me, but our love was not to be.  (::cringe::)

It seems innocent enough.  You put your groceries on your credit card.  Then your bills all go through (because you thought it was a good idea to put all your utilities on there).  Next, I promise you, something will break.  Either your deadbolt, or your tv, or your leg.  Something always breaks when there's a balance on your credit card.  Next thing you know, you can't pay it off and you're stuck with a balance for months. 

Sometimes you just forget you bought something with your credit card and since it's not directly taking money out of your bank account, you spend the same amount twice.  I've definitely fallen into this trap more times than I care to admit.

My two cents: pay with cash as much as possible.  Hook your bills up to your checking account.  It will force you to be more careful about how much you spend since getting spanked with overdraft charges is worse than late fees nowadays.  Use your credit card only in dire straits or when you already have the money in your other accounts to pay it off immediately. (Y'know, for the points.)

3. Pay your student loans back, then move out.
Smooth move, Ferguson. 

I'll try to mock up a little table to make budgeting easier in a little bit.  Hope this helps someone.