Budget not best way to manage money

I’m not going to lie, I haven’t been managing our money very well. I keep saying I’m going to put us on a budget and pay off our debt, but I think I’ve probably been saying that for far longer than I care to remember. But then I think to myself, “I’ve been good lately, I haven’t bought clothes or shoes or splurged on anything.” Then why do I never seem to have money left over at the end of month?

So the other day my fiancé mentioned that we needed to get a new camera lens adaptor for our business’ camera. “How much is it?” I asked and he replied “$40.” I said, “Well, can it wait until after the holidays, we’ve spent so much money already,” to which he replied “Of course. It can wait.”

Then yesterday, he dropped me off at the airport to go visit my parents for the holidays. (Long story why he can’t come). Anyway, as usual I was there early and as usual there was no line for check-in, nor for security. So I had a few hours to kill before my flight was to begin boarding. For some reason, when I am traveling and I have time to kill, my first instinct is to go to the bar and get a glass of wine somewhere. Well it was already noon, so I figured, why not get lunch with that glass of wine as well? The only place with a bar in that terminal was a sit down restaurant so I got a table and ordered a spinach salad with chicken. After tip, my total came to $25. I left the restaurant and proceeded to the nearest terminal coffee shop where I ordered a flavored latte. Total? $5. So in just an hour and a half, I managed to squander $30 just on food and drinks for myself, only.

That’s when I hit me that my senses around spending are all skewed.

$40 seemed like a lot to spend all at once on something we needed for the business, yet I didn’t hesitate to drop $30 on stuff I won’t even have anything to show for!

This made me really see how I can shift the way I think about spending money. I read a great book earlier this year called Your Money or Your Life by Joe Dominguez and Vicki Robin (not an affiliate link). The tagline is:

Transforming your relationship with money and achieving financial independence.

Pretty relevant to what we’re all seeking right?

One of the 9 steps in the book is to identify your core values. So first, determine what is truly important in your life.

Once you’ve done that, the next step asks you to track every penny that you spend for one month, then categorize those transactions. Now, you can categorize them however you see fit, and once you’ve gotten everything categorized, it asks you see what percentage of your money you are spending in each category. (This is very easily done with software like Quicken, which I am attempting to get back into using).

Ok next you want to see if the categories that you spend the majority of your money in correspond with any of your core values. Barring necessities like rent/mortgage and utility bills, chances are a lot of it doesn’t.

The point is, once you make yourself aware of what is important in your life vs. what you think you want or need, you can view the way you spend money in whole new light. Maybe you are already on track with this, but I have a feeling that you’re not if you’ve read this far already.

The best part about this exercise is that you can really feel good about where you spend your money and see that it doesn’t have to feel restrictive like a budget usually does.

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14 Responses


  1. Eric on 27 Dec 2010

    Haha I had to laugh Marianne, because what you wrote sounded as if I was talking to myself!

    My wife and I were the exact same way- we could drop $60-$100 bucks on dinner and drinks because we had a shitty week at work or felt like we’ve been good so time to splurge, but we would be left to juggle the remaining dollars to necessities.

    We even tried the envelope budget only to rob from the other envelops to pad our entertainment envelop. That didn’t work.

    So we did exactly as you mentioned, we determined whats important to us, which is our son and traveling and now dictate most of our spending towards those goals. Great PRACTICAL advice to anyone struggling to budget!

    Eric

  2. marianney on 27 Dec 2010

    I’m glad you could relate Eric! I find that it’s really hard to keep the amount of money you spend on things in perspective. Even in the grocery store, I find it difficult to spend $17-20 on some nice organic steaks (no, we are not vegetarians) to cook at home, but yet it doesn’t seem to be a problem to drop $35 on food alone when you go out to eat! Why is that??

    • Eric on 27 Dec 2010

      Oh you’re so right, it’s a major clouding of perspective.

      I’m sad to see my coconut water isn’t 10 for $10 at Wholefoods, but have no issues dropping $3 on a great micro, because hey “it’s happy hour!”.

      We purchased (not vegetarians either;-) our grain fed beef from a rancher here locally and we spent $350 for some good stuff, but that perspective monster hits and I was like damn- $350 for meat! In reality that is a great price and saves us from going to the store, but if we spent $350 on some new tech device we feel we got one hell of a deal!

      And to tell you the truth I don’t know why the hell that is… My brain hurts now;-)

      • marianney on 27 Dec 2010

        haha! actually we are going to buy 1/8 of a free range, local, organic cow ourselves once we can buy a freezer to store all the meat in. we live near an indoor year round farmer’s market (have you heard of this in Baker?) and the guy there sells them for $225. That ends up being $2.99 a pound. That really is a great deal and I can justify spending that since we probably spend way more than that in a year anyway buying it individually.

        So actually, you are probably justified in doing that Eric since you are spending lesss in the long run.

        • Eric on 27 Dec 2010

          I think I have heard of it, is this the link:

          http://www.denverurbanhomesteading.com/market.htm

          I haven’t ever been, how is it?

          I get my eggs from the guy I buy the beef from, now looking for some nice produce and chicken breasts. I like Red Bird chicken that’s here in CO, but damn it’s expensive so looking for some cheaper, just as good, options.

          Would they have that there at the indoor market you think?

          • marianney on 27 Dec 2010

            yes that is the market! it’s nice. it’s getting bigger and bigger which is nice because you have more options.

            for chicken, we buy some organic chicken from costco. i forget what kind it is, but it’s a pretty good deal (for organic that is).

            as for having chicken there, I am almost positive someone has it, but i can’t tell you for sure. it’s been a little while since i went last.

            definitely check it out though sometime.

        • DrJudyC on 27 Dec 2010

          Not only spending less in the long run, you are investing in your best asset: your health.
          Remember, it’s not just about money, it’s what we “invest” it in. Same as time, emotions, and values.

          • marianney on 28 Dec 2010

            So true Judy! It’s important to distinguish the difference. But if we align our spending with our true values (one of which for me is Health) that money is in fact “invested” in ourselves.

  3. DrJudyC on 27 Dec 2010

    what great insights you’re getting! and your awareness is expanding, which will bring you higher!
    I love the “squander” story and have taken it to heart.

    For NEW YEAR 2011: Let’s make every penny we spend return to benefit us somehow, either by health and nutrition, more money to support us, or as help to a friend, and other joys.

    You’re wealthy in SO many ways, Marianne! You just need cash flow instead of out-go!
    🙂
    JudyC

    • marianney on 28 Dec 2010

      Now those are some resolutions I can live by!

  4. AnotherdayinParadise on 28 Dec 2010

    Nice blog, I can’t wait to see what else you have to write about.

    I can not relate to this story because I would have spent the money on the equipment and would have been eating my home-made sandwich at the airport. I guess I am a step ahead of you on this subject.

    Good luck with your goals.

    • marianney on 28 Dec 2010

      Haha thanks mom. Apparently i did NOT learn from the best 😉

  5. Erica on 01 Jan 2011

    Great post, Marianne! Sorry I just got here. I really resonate with this. It is so easy to spend a fortune on going out to eat, and then tell yourself you don’t have the money for something that would promote your business.

    The price on beef is really very good! At Whole Foods I pay $9.99/lb for what they call ‘flap meat.’ It’s really good stuff and my daughter loves it. But sheesh, the price! Even ground beef is $3.49/lb for 85/15. A whole organic chicken at WFM is around $10. That said, though, the meat is so much more flavorful than regular grocery store meat, and I can feel better about it, knowing that it’s not from CAFOs.

    Great posts. Keep them up, I’m enjoying!

    • marianney on 01 Jan 2011

      Thanks Erica! And you’re so right about the cost of meat, but it makes such a difference and I really try to eat only organic foods because we are trying to get pregnant.

      Btw if anyone is interested, the place we are going to order from is at http://cowpool.org/
      I am not sure if you have to live in CO though to get it delivered, although for the sake of carbon footprint (via long distance travel) it might be best to find something similar in your area.