I’ve been a consistent budgeter for over 6 months now. In many ways, I’m still a total novice. However green I still am at this, one area I can be helpful is sharing what my financial life looked like before and after budgeting and the insights I’ve gained along the way. Here are three ways budgeting has benefited my life so far:
- Awareness into myself and my spending
- Financial empowerment
- Freedom from guilt-ridden spending
Awareness into Myself and My Spending
Prior to starting my journey, I never would have thought budgeting would bring such a depth of self-awareness to my life. But it’s done just that. Tracking my spending by hand has forced me to be real with myself. There’s no hiding from the unnecessary Amazon purchases that add up to financial stagnation.
Spending money eating out has been a big struggle area for me. It wasn’t until I realized the emotional ties behind the habit that I was able to understand why it was so difficult for me to cut back. What I realized was that friendship and socializing were high priorities for me, and I often used restaurants, bars, and coffee shops as places to gather with my friends. Going out with friends to eat provided an important nourishment to my soul that went far beyond the cost of the food or drinks. I had to acknowledge that first and foremost. From there I was able to make a small but substantial change by committing to only spend money eating out when it was to see friends. I stopped going to coffee shops by myself and ordering meals out by myself just because I didn’t want to cook. This small change has decreased my food spending substantially. Of course now that COVID has closed down many places this goal has become easier, but I was seeing notable change in this area of my spending before the lockdown.
It might sound cheesy, but for me budgeting has not only been a financial journey, but a personal one. It’s lead me to realizations about myself that I may not have come to without getting close and personal with my numbers.
Financial Empowerment
Oxford dictionary’s definition of empowerment is “the act of giving somebody more control over their own life or the situation they are in”. For me, budgeting has given me that control over my financial situation.
Prior to budgeting, I didn’t really know my numbers. Not knowing my numbers kept me uninformed and therefore disempowered. It kept me living in a sort of fantasy land where I spent money based on informed feelings. Of course I would check my bank accounts, I knew roughly what my income would be each paycheck, and I paid my bills. Aside from that, I didn’t have a good grip on what was going on with my finances. This lead me to being in a bumpy relationship with money. Some days I’d feel fine, a few days later (usually after my credit card balance was paid) I would feel stressed about money. I thought I had to keep a large buffer in my checking account because I didn’t know what deductions might be looming ahead. Budgeting has forced me to contend with all my numbers. To see all my bills, debt payments, variable expenses and savings goals laid out in front of me and to make a plan each paycheck. Knowing my numbers empowers me to choose what to prioritize in life.
In the process of budgeting, I’ve realized I have specific and obtainable financial goals for myself. These goals include getting out of debt (and staying out of debt), building an emergency fund that gives me peace of mind, saving enough to travel abroad, and working toward financial freedom. Since finishing my emergency fund, my next priority is to pay off all my debt by the end of 2020. Working toward these goals has made me feel more financially empowered than I have ever felt before in my life.
Freedom from Guilt-ridden Spending
This was a surprise benefit that I began to notice a few months into budgeting. At some point, the heavy weight of guilt that used to accompany my spending vanished into thin air. I think it went away around the same time disempowerment left. Since I began assigning a purpose to every dollar that gets deposited into my bank account, those dollars that are meant for spending will be spent in peace. I’ve particularly noticed this benefit in the context of sinking funds. Sinking funds are small savings set aside for specific purposes like birthdays, holidays, and other events. In the past, I used to guilt-spend my way through these events and then struggle to pay it off on my credit card later. I cannot overstate how satisfying it is to spend money on something you want, knowing you have saved for that exact purpose. To know that you’re not spending impulsively or undercutting your bigger goals to get it. I know people with far larger salaries than my own who have been racked with spending guilt simply because they do not know their full financial picture. Freedom from that guilt and stress is achievable, and for me I found it through budgeting.
If you’re a budgeter, what benefits have you seen in your own life from your budgeting routine?
budget with julia 