Andrea: My financial diet
So, it just has to be said … I’m really bad at being poor. I love clothes, I like to eat out and I have no patience whatsoever for sifting through bargain bins. I worked full-time for two years before I started uni and I massively underestimated how hard it would be to give up my full-time income. I re-jigged my budget and while I knew I wasn’t about to become the next Richard Branson, I didn’t think I was doing too badly. What I wasn’t willing to admit to myself though, was that my ‘budget’ worked a little something like this…
Pay goes in, automatic transfers come out (to savings, to pay for bills and rent etc) in a very responsible, adult fashion. I then quickly spend what’s ‘leftover’ by going out for dinner/getting fuel/buying a shirt (or several dresses…). I then transfer money from my bills and savings accounts back into my spending account with the promise that I’ll return the funds later. Funds are never returned. Next payday rolls around and the cycle continues. It’s kind of like a real-life version of that trick magicians play, where they put something under a cup, shuffle the three cups around and poof, it’s gone! Just picture the ‘something’ as my entire income and the cups as my bank accounts and there you have it. Hocus pocus and I’m back to being brokus.
Week after week my ‘budget’ left me shuffling money from one place to the other with nothing to show for it. I was not a cent closer to my goals of travel or re-furnishing my unit. Deep down, I knew I wasn’t doing well with my money but it was easy to blame it on my status as a uni student and tell myself that I was doing the best I could given the circumstances.
Then my partner and I decided we wanted to move in together, and after scouring the net for months, we finally found THE perfect unit. It was all going fabulously until we sat down to crunch the numbers and realised we didn’t have enough money. Well, I didn’t have enough. Between us we’d be able to cover the week to week expenses and the bond but we didn’t have enough up our sleeves to cover the initial costs of furniture and appliances. While my partner was happy to cover some of the extra costs, I felt guilty about him having to cover my share of the expenses as well. To say I was disappointed in myself would be an understatement. I felt childish, guilty and angry that my inability to manage my money was the only reason my partner and I couldn’t live together. This time, it wasn’t just me missing out, I’d let him down as well.
Being the lovely human he is, he suggested we give it a few more months to get things together and keep an eye out for some bargain furniture in the meantime. Before he could even finish getting the words out of his mouth, my tears had reached the level of full-on snot-crying accompanied by wails of ‘But I’m 21! I have no money! Hooooooow did this happen? I’m so bad at being an adult!’.
Once again, his mature adult glory prevailed and, after letting me cry-snort my frustrations, he suggested we sit down and revisit my personal budget. My first thought? Absolutely, positively, most definitely not! I knew it was bad but I had no interest in learning quite how far into denial I’d fallen. It’s like when McDonald’s decided to add kilojoules to the menu boards and tell us all EXACTLY how fat we were about to get. Ignorance is bliss, people. Ignorance is shopaholic, big-mac-eating bliss! That’s when my man threw me this philosophical gem:
‘You’ve got two choices. Keep doing what you’re doing and end up exactly where you are now. Or, let me help you work out where you’re going wrong and start getting some money in the bank.’
I know right. Amazeballs. So I sat back and watched as he formatted Excel spreadsheet evidence that I was living a life I couldn’t actually afford. Cue snot-crying episode round two!
From there, we broke it down. Instead of just allowing for rent and some savings here and there, we actually factored in all the things that were chewing up my income. Hair appointments, car insurance payments, coffees, make up and toiletries, phone bill, gym fees and all the major events I have coming up that I need to save for, like weddings and family holidays. It wasn’t an easy process and, after ending up in negative figures more than once, we finally decided to take out saving for travel until I was earning a better income. It’s a pretty impressive document and the best part is, it leaves me with enough wriggle room to have a night out here and there without blowing the whole thing back to Brokeville.
I like to think of it as my financial diet, learning to appreciate all the things I love to spend my money on in moderation. I’m not starving, but I’m not bingeing either.
While it was possibly one of the most un-glamorous moments I’ve ever had in front of my man, my snot-crying episodes started a really important conversation about money and forced me to own up to myself and my cup-game of a budget.
It’s easy to let your finances slide when you’re at uni, especially if you’ve got a full calendar and limited time to actually get in some paid work. In my case though, I work four days a week and actually make a fairly reasonable income for a student, so there was no excuse for me to be so far behind with my finances. All I needed was a little reminder of what I really want, aside from my degree, and now I’ve got proof that I can be well on my way to achieving those goals while I study.
My advice? Enough with the cups. If you’re struggling to make ends meet despite having a regular income, sit down with someone you trust or a finance professional and be honest about where your money goes. After all, if you change nothing, then nothing will change.