I found myself staring, mouth open at my computer screen at the $-24.09 highlighted in red in my bank account. Overdraft.
I know what you’re thinking:
“What an idiot!”
“Don’t you check your bank account?”
“How irresponsible can you be?”
“That would never happen to me.”
Those same thoughts crossed my mind. I, also, didn’t think it would happen to me; I thought that I was so good with money. I rarely made a large purchase, and when I did, it was for good reason — like celebrating a new internship with a new pair of slacks and shoes. After bearing witness to the carelessness that got me a big red negative sign (almost like getting a big red F on a test…), I started paying closer attention to my bank account. I checked my balance daily. That’s when I noticed that it wasn’t the big, once-in-a-while transactions that got me; my daily spending on small items was out of control! The iced coffees took $35 a week out of my account. I was starting to go out to eat more with nicer weather and a busier schedule. Those outings, which were supposed to be far and few between, started costing me $45 a week. I started to become more careless as I started working more hours over the summer. Instead of saving that extra money, it was going right to ordering decor items for my new apartment and purchasing one-time outfits for going out amongst SO MANY small, pointless purchases.
My excuse was that summer was supposed to be fun and carefree. But, with school about to start, I knew it was time to buckle down and put the kibosh on my carefree, summer spending.
I live in a small space, so I try to pursue that minimalist persona. I have to accept that I don’t need more clothing or shoes. I shop weekly for the food that I know I will finish by the next shopping trip. The minimalist approach not only saves space and money, but it also prevents waste. By taking inventory of what I have and being thankful for what I have, it helps mitigate my “self-care” and “treat yo’ self” impulse to purchase. This self reflection was essential to start budgeting.
Cash Budgeting
This hands-on budgeting trick, versus just looking at a spreadsheet that you’re not actually following, is the only thing that’s worked for me. Every week, I take a stipend out for my spending. Depending on your needs and income, your stipend will be different, and the goal is to reduce the stipend over time. I leave my cards at home and only use cash to spend money. Using cash allows me to see how much money I’m spending and makes me think twice about spending it.
Something cool that I’ve done, instead of spending money on coffee, is save my stipends to buy an espresso machine. Now, I can have coffee whenever I want at home, and I am not using a plastic or styrofoam cups anymore. Including the price of the machine, beans and milk (for a latte), it only took one month for the money I spent to pay for itself. It’s been three months since I’ve been to a coffee shop and I’m saving money because of it.
I’ve also been thriftier. Instead of going to the mall, I’ve been going to nonprofits and second hand stores to shop for clothes, decor or furniture. I can exercise my creative side by upcycling items. Also, thrifting is trending. For some additional profit, I’ve been taking out-of-date clothing to stores that buy back. Online shopping isn’t an issue; if I buy something online, then I subtract it from my stipend that I’ll take out the next week.
By saving up stipends for something you really want, it makes that product more meaningful and exciting. Since the money I take out on Monday has to last until the next Monday, I won’t be spending it all at once. I have to save it for the weekend! This has helped mitigate buying unnecessary snacks or meals during the weekdays, because I know I’ll want to spend that money out with friends on Friday or Saturday night instead. Since I know that I will be making literally everything that I eat, it’s improved my grocery shopping and meal prepping skills.
With a card, I’d often run into the problem of having bartenders or servers up my tip — sometimes as much as $4! I also get so annoyed with the $10 minimum that most places have for using card. With cash, I don’t have to worry about either of those problems when I’m out on the town.
If you’re looking for drawbacks:
- If you eat at the dining halls, they recently stopped accepting cash. But that’s why students have Wiscards. Include the Wiscard in your stipend!
- Carrying cash isn’t secure and can be annoying if you have loose change.
That’s all the cons I can think of.
The pros are immense, and I think you’ll find that too. I’m a lot less stressed now that I’m budgeting like a boss. It’s a powerful feeling to take control of a vital part of life.