Well, I’m Not Actually on a Budget. Instead, I Ask Myself These 4 Questions Before I Buy Anything

I know. The blog’s name is Butch on a Budget and I’m an avid You Need a Budget (YNAB) user. But….I really don’t have a budget. At least not in the traditional sense of the word.

Sure, I have a general idea of how much I would like to spend in various categories and I track and categorize my spending regularly. However, you won’t find me checking the budget before a purchase to see if I there’s enough left in the budget line for that month.

Since I’ve gotten my finances under control, I don’t have to worry about overspending on any of my accounts. For the most part, I just spend as much as I want on what I want. The important part is that even with that spending mindset, I still spend below what I make each month.

The secret? I ask myself four simple questions before every possible purchase. These questions help keep my spending well within my “budget” and they make me way less stressed.

If the answer is “yes” to all of these questions, I spend the money, budget be damned. But, if the answer is “no” to one or more of these questions, I don’t spend the money. These four questions (and meal planning) make sure I’m always sticking to my “budget.” This means I’m never left feeling deprived when I decide not to spend money on something.

It’s not necessarily a “no” because it’s not in the budget, but instead, it’s because it’s not a priority.

Sure, the system isn’t fool-proof, and since I’m still newer on this journey, I’ll occasionally make a purchase that doesn’t pass my four-question rule. But for the most part I stick with it. And every time I don’t stick with it and end up regretting a purchase, it gives me more confidence in sticking with the system the next time.

1. What is the feeling I am trying to buy, and is this the best way to get it?

Often, when we buy an item, we’re actually trying to buy a feeling: love, relief, excitement, or relaxation, to name a few.

When I find myself wanting to spend money on something that isn’t a need or regular cost, I try to pinpoint what feeling I’m seeking from that purchase. Once I’ve answered that question, I can usually decide if this purchase is the most efficient way to get that feeling.

When I’m tired after a long day and want to order take-out, am I really craving that specific food or do I just not want to cook or do dishes? Will a frozen pizza or burrito satisfy that same feeling, or do I really want Indian food from that one restaurant?

If it’s Friday and I’m feeling jazzed for the weekend and want to go out for drinks, do I really just want to socialize and not think about work for a little bit? Do I have to spend money going out for overpriced drinks, or will I be just as satisfied inviting friends over for a game night and drinks at home?

2. Is this worth [insert number] hours of my life?

Time is finite and when we work, we trade it for money. Whenever I want to buy something I have to determine if it’s worth the amount of my time I would have to trade at work in order to purchase it.

If I want to buy something that is $16, and my real hourly wage is $16, it better be worth me trading at least an hour of my time for it. If I want to buy something that’s around $300, I better think it’s worth about half of my week’s work.

When we think about purchases as paid for by our time, it can help put the cost into sharper perspective.

It’s important to calculate your real hourly wage (taking into consideration the hidden expenses of time and money spent on working) to answer this question properly. If the idea of a real hourly wage is new to you, I suggest reading Your Money or Your Life by Vicki Robin and Joseph R. Dominguez — but here’s a brief summary to get you caught up in the meantime.

3. Will I remember this purchase positively in a week/month/year?

We’ve all had buyer’s remorse. We buy something and a few days or weeks later, we actively regret it. But there are also times when we buy things that have no real effect on our lives. They don’t benefit us and we forget we even bought them until we find them dusty in the back of a closet during spring cleaning.

Essentially, you’ve spent your money on nothing — or worse, clutter. And that kind of sucks, right?

This can happen with non-material things, too. We all remember splurging on a fancy dinner out to celebrate a special occasion, and hopefully we have fond memories of the evening. But how many times in the past year have you gone out for a meal that you don’t remember?

Sure, you got food out of the situation, but you probably could have gotten food for half the price, rather than spending extra for an unremarkable meal.

4. Does this spending align with my priorities?

This is a big one. Sit down and think about what you want to prioritize in your life. Is it time with loved ones, travel, delicious food, giving, stability? Whatever it is, write it down. It doesn’t matter what your priorities are, as long as they are yours.

If the purchase doesn’t bring you closer to living in alignment with your top few priorities, consider if it’s worth the investment or how that money could be used instead toward your priorities. Maybe it’s saving for your dream vacation, a down payment on a house, your retirement, a baby fund; surprising a friend who’s been struggling with a check during the holiday season; a fancy restaurant you’ve been dying to try.  

This turns the question of spending from a “yes” or “no” question into a “this” or “that” (and importantly, “why”) question, which is much more fun and useful.

This four-question strategy works for me, and taking control of your money is all about finding a system that works for you. Sure, some of the changes and lifestyle cuts might not feel super comfy at first; that’s why you have to have a strong “why” behind reducing your spending and increasing your savings. You have to keep that why at the forefront of your mind (perhaps by keeping these questions or a list of your top priorities or savings goals on a note card in your wallet).

Once you can master that, the cuts that left you feeling deprived when you were trying to stick to a capital B “Budget” will suddenly become easier decisions that you feel good – not guilty — about. And as you start to watch your net worth grow, you may even find yourself getting excited about not purchasing something, because you know that instead, that money is going towards buying a future of freedom.

PS — The YNAB link is a referral link, which means that if you sign up for a subscription at the end of your free trial, I’ll get a bonus free month. I wouldn’t recommend YNAB if I weren’t enthusiastic about it, and I think you will be, too! You can sign up for your free trial of You Need a Budget here.

8 Ways Building Community Can Fast Track Your Savings

One of the things I value most is community.

For most of my life, I’ve had a large community in one sense or another. Growing up, my family lived near my large extended family, and during the summers we’d spend every day at a different cousin’s house (I have around 40 first cousins).

When it came time to choose a college, I landed at a small, public liberal arts college. The smallness allowed me to find a new kind of extended family. My social calendar was always full and I made close connections with staff and faculty around campus. I was an involved student and took advantage of all the close community that college had to offer.

Some of the hardest times of my life have been when I’ve been missing that community piece — when my family moved across the country, away from my extended family just before I started high school. When I moved to a new state right after graduating college and only knew my now-wife.

All of these experiences have made me a community builder. I plan ways for the important people in my life to get together. I love cooking for others and introducing new people to each other, expanding their connections.

I’ve recently realized that this habit of mine isn’t just benefiting my social life and mental wellness; it’s also benefiting my wallet. Your community network can have powerful effects on your net worth. By focusing on building a strong community you not only enrich your life, but you also create incredible opportunity to save (and make) more money.

This is a list of 8 ways that you can improve your finances while also strengthening your community.

1. Share Your Stuff

Whether it’s a Netflix password, a pitchfork, or a winter coat; borrowing and sharing things among your family, friends, and neighbors saves you money. Next time you think you have to buy something that you may only need or use once, check to see if anyone in your network has one and is willing to let you borrow it for a short amount of time. This is also more sustainable, if you’re looking to improve your environmental footprint.

2. Barter Skills and Services

Bartering or exchanging different services among your friends is a great win-win situation for everybody.

We and our neighbors take turns watching each other’s dogs when we go out of town; this helps each of us out by not having to spend $35 per night boarding our dogs. I’ve gotten haircuts from friends and my wife, had friends pick us up from the airport to avoid parking fees or an expensive Uber ride, taken many a photo for my friends’ holiday cards and engagement announcements, and once, even let a friend use our yard to have a yard sale. I put some stuff out as well and ended up making some extra cash!

Bartering services can be a great way to save money, as long as it’s not just going one way. You don’t want to take advantage of your friends’ kindness or not compensate them in some way for valuable skills, but you can usually find a fair exchange that costs less than paying a stranger, plus it usually involves getting to hang out together!

3. Entertain on a Budget

Having a good community lends itself to the possibility of a lot more fun for much less money. Inviting people over for a game night and make-your-own pizzas is a lot less expensive than getting dinner and drinks out — and is often a lot more fun.

In October, we usually invite a bunch of people over each weekend for an outdoor Halloween movie screening. We do the same thing in December with Christmas movies. Our friends look forward to these events, and they barely cost anything. People bring their own chairs and their own drinks; we supply a few snacks and some hot chocolate.

We routinely end up spending an evening hanging out with our neighbors around the fire, talking, laughing, and sharing a $3 bottle of wine. Much better than spending $10 a glass out — and a lot cozier.

4. Motivation and Accountability

Community is also great at holding you accountable and helping you stay motivated when you’re working towards larger goals (such as FI)! By sharing your aspirations with your friends, you often create more momentum to stick with them.

I’ve even gone so far as to create an accountability club with some friends. We meet once a week (well, we try) to touch base on long-term goals and set three action items we each want to complete that week. Often, at least one of the long-term goals is related to finances.

By speaking our goals out loud and discussing them with others, we are able to ask for help, think of things in new ways, and celebrate our smaller accomplishments.

5. Learn New Skills

Building a community of talented, smart, and skilled people opens up countless opportunities to learn new skills — and have fun doing so.

My wife has helped multiple friends learn the ins and outs of social media marketing and ad design. I’ve helped friends with money questions. I have a friend who’s helping another friend out with a home renovation so that she can learn DIY skills that will come in handy on her future home. We have plans in the works for our neighbors to teach us sailing.

I love the idea of sharing knowledge and learning from our friends so much that I’ve been wanting to start hosting “Brunch and Learns” where members of our friend group could sign up to teach the group different skills or talk about a topic they’re passionate about, all while we enjoy mimosas that don’t cost $10 each. Sounds like a delicious win-win to me.

6. Knitting a Web of Opportunities

A major way that building your community can help build your net worth is through future income potential.

Experts say that between 70–85% of all jobs are secured through networking, and I know that this has often been true for both me and my partner. Since many jobs aren’t even posted online, the larger your network, the more likely you are to learn about (and be recommended for) a job.

So, if you’re looking for a new job, let your community know! Just maybe not your work community — check those social media privacy settings!  

7. Discovering Local Resources

Staying involved in your local community can also lead to learning about resources you never knew existed.

Check out your local library’s calendar of free events or your city’s list of annual events. Sign up for Eventbrite emails and get notified of the free social and educational events that are coming up in your neighborhood. Follow local online groups, join Meetup, search for local events on Facebook, or volunteer — basically, find a way to get out there and meet new people. Where I live, there are tons of free lecture series, classes, tours, and activities going on, and every time I go to one, I learn about several more.

8. Happier Kaylie; Happier Wallet

I’m an extrovert, so getting to socialize and hang out with my friends boosts my energy and my happiness. When I’m happier and have more energy, I naturally end up spending less. I have the energy to come home and cook food rather than opting for the convenience of takeout.

Feeling happier and more satisfied with my life, I’m not looking outward at what else I think I need in order to be happy. I start to desire fewer material things and instead, end up focusing more closely on the people I’m with and experiences I’m having. The caveat, of course, is that you should plan your socializing around less spendy activities (see item #3).

Of course, saving money is only one of the many benefits of building community. Having a strong support network and giving back to your circle improves your happiness, health, and general wellbeing.

The fact that it may also improve your finances is just a sweet, sweet cherry on top.

My 2020 Intentions

Cassie’s not a fan of New Year’s resolutions, so instead I make 2020 intentions. They’re not big life changes I’m trying to make, or something I expect to perfectly execute (and when I don’t, give up on in a week); they are just things I want to be more conscience of and intentional about.

Even though I fully understand that the start of a new year is ultimately an arbitrary marker of time passing, there’s something that I like about sitting down, reflecting on the past year, practicing gratitude, and thinking about things I want to work on for myself in the new year.

So, here are the three intentions I settled on for 2020.

1. Develop habits that promote increased energy and focus

*(and actively build an environment and systems that contribute to my success in building these habits)

My partner and I are both pretty busy with work, social activities, side hustles, traveling, and creative pursuits. It’s not a bad busy, and I think we do a good job of balancing the busyness of work and play by also taking days to just relax.

However, I still have found myself over the past year going through periods of very low energy and less-than-great focus. This is something that I want to actively work on this year.

I know this is a large and somewhat vague intention (which usually aren’t successful), but I do have specific and concrete things that I think will help with both the energy and focus.

But if I learned anything in 2019, it’s that you can’t just rely on willpower for this sort of stuff. (Sorry, past self, but it’s just not strong enough.) So, my plan is to create systems and alter my environment slightly to promote these new habits.

Though I have a whole list, I’m only going to work on one new small habit each week until it starts to stick easily. My habit to focus on during the first week is drinking more water (especially in the morning). So, I set a water bottle on my nightstand before bed, which naturally will help me drink a serving of water first thing when I wake up.

Next week I’ll be trying to go to bed at the same time each night. To help me do that, I’ll set an alarm on my phone for an hour before bedtime to remind me to start finishing things up and preparing for bed. Sure, it probably won’t be 100%, but even if I get to 60%, that’s a lot better than nothing.

2. Spend less time on my phone and social media

Cassie and I take turns calling each other out for using our phones too much by asking, “What are you doing Scrolly McScroll Scroll?” And I gotta say, I probably earn the title more often than she does.

I don’t like feeling so attached to my phone. It’s a bad habit that I want to kick for my own sake, but also definitely before having kids, even though that’s still a few years off.

I know willpower won’t be enough (see previous note to self), so I’ll be deleting a lot of apps from my phone — at least for the duration of January — and moving all of my apps off of my home screen. I’ll still be able to check on things via the computer, but I’ll set it so that I have to manually log in each time, which hopefully will keep me from mindlessly, automatically going to those websites.

After a month, maybe I’ll see if I can handle having the apps back on my phone with a time limit, or if I’d rather just keep them off indefinitely.

3. Actively adore my wife

It’s my first year being married! And this year will be our fifth together as a couple. We have a good thing going and we already spend intentional time on our relationship, but it’s important to not get too complacent and to remember to put the work into your relationship that it deserves.

Like I said, we get pretty busy with work and life, but setting aside weekly time together is always a priority that keeps us feeling connected while also giving us the chance to touch base. Plus, I just love planning surprise dates.

You might be thinking this isn’t really about money. And you’d be both right and wrong.

For one, I’ve already talked about how my mood affects my spending, so by working towards increasing my happiness and energy, I’m more likely to feel more in control of my spending.

But more importantly, even though the blog is called Butch on a Budget, I think of it less as a blog about money and more as a blog about intentional living and working towards happiness and more control of your own time. Money just happens to play a major role in all that.

My First Full Year Working Towards FI: A Recap!

Even though it was my first full year really focusing on saving money, I didn’t feel deprived in the slightest. In fact, 2019 was a pretty big year that left me feeling really grateful for the life I have.

I switched jobs, traveled internationally twice (with some domestic travel in between), spent quality time with family and friends, saw great concerts and speakers, ate a lot of delicious food, AND got married. I had a very full, exciting, and joy-filled year, and saved a pretty good chunk of money at the same time. So, that’s cool.

Turns out, spending your money more intentionally (rather than mindlessly) leads to having more intentionally awesome experiences and a lot less stress. Who knew?

Here’s how I ended the year:

2019 Overview

Cassie and I got married right at the end of 2019, and don’t plan on joining our finances for a little bit (aside from a joint savings account for a down payment). This means that these numbers just represent my financial situation, perhaps next year the update will include the full family finances.  

My Income

Started the year off with a salary of $39,500

  • Earned a $500 bonus, and raise of $1,500 part way through the year
  • Switched jobs in July
    • This gave me a small pay bump ($2,000)
    • Higher 401K match ($980.20 extra, compared to previous match)
    • Cheaper Health Insurance
    • 457 plan available (tax advantaged savings available pre 59 ½)
  • Took up dog walking on the side starting in June ($3,896)
  • Dividends (~$250~)
  • Made all purchases on rewards credit cards (and paid them off in full each month) ($214.88)
  • Sold items we no longer needed, rather than keeping them around to take up room (~$200~)
  • Small amount of photography side work ($200)
  • Moved emergency fund savings to a high interest savings account mid-way through the year ($61.38 in interest)
  • Used the Ibotta app for cashback on groceries (especially alcohol) ($37.70)

My Net Worth

Net Worth on Jan. 1, 2019: $2,409

Net Worth on Jan. 1, 2020: $20,040

2019 Net Worth Change: +$17,631

Breakdown of My Net Worth:

–$2,358.32Car loan and balance on my two daily credit cards that the autopay hasn’t paid yet.
$14,221.94Invested (403b, 457b, Roth IRA, and taxable accounts)
$4,014.89High interest savings account for emergency fund
$3,061.65Checking account for monthly expenses and sinking funds
$1,100High interest savings account for down payment

Big Purchases/Spending

  • Wedding Stuff (ring, proposal materials, custom suit, photographer, food, decorations & flowers, certificate/fee, etc.): $1,731.10
  • Eating out (hoping I can cut this one in half this year): $1,465.15
  • One-week trip to Ecuador with my two younger brothers as a graduation gift (Cassie and I paid for their trip, except their plane tickets): $1,308.77
  • 9-day trip to Phoenix to visit family: $863.05
  • Christmas: $531.37
  • London for the first week of the year (doesn’t include flights and first half of the trip, as that was in 2018): $443.72

Some Ways I Saved Money

Food
  • Cooking at home
  • Eating fewer meat-centered meals
  • Having easy/convenient backup foods for when I’m too tired to cook
  • Switching wines (thanks, $3 Whole Foods wine!)
  • Limiting ordering drinks out to special occasions (mostly)
  • Making my own coffee or snagging free coffee from the fancy apartment lobby where I walk dogs
Shopping
  • Stopped going into stores “just because” (looking at you, Target)
  • Library!
  • Scott’s Cheap Flights
  • Looked to buy used first via Facebook Marketplace, Craigslist, Offer Up, and LetGo
Other Ways
  • Building up my community
  • Moved my 403b investments to lower fee index funds to save longterm on fees
  • Bundling up in the colder months and living in a tank top in the summer to save on heating and cooling costs

Savings Goals for 2020

  • Save $12,000 towards a down payment for a house in a high-interest savings account, while still maintaining my regular investment contributions ($350 every other week).
  • Pay off the balance on my car loan by my birthday in March
  • Fully fund 3-month emergency fund with $5,400
  • Maintain sinking funds for known upcoming expenses

2019 was a pretty great year, and even though we are very early on in our journey to financial independence, we’ve already got a taste of the type of freedom it can buy you. One of the biggest changes from 2019 was that in October, Cassie left her job as the Director of Marketing at a software startup to start working for herself. There’s no way we would have felt comfortable making that shift without the solid financial foundation we had built up throughout the year.

Can’t wait to see what new adventures 2020 brings us!

Welcome to Butch on a Budget

Hi, I’m Kaylie! I’m 25 and I’m at the beginning of my journey to financial independence (FI). I’m starting Butch on a Budget to help keep me motivated and accountable, and also share my experiences as someone who is just starting to figure out this money thing.

I don’t work in tech or make a particularly high salary. I work for a public college and make less than $45K each year, pre-tax, but I love my job. The start of 2020 marks the end of my first full year actively working towards FI. There’s still a long way to go (but much less than 40 years), and plenty of room to optimize my spending, but I’m happy with how things have progressed so far and I’m excited to continue this journey and share my experiences with you.

Like many people, I was first introduced to the concept of FI/RE through Mr. Money Mustache. I dove in, reading through the blog in its entirety. Then I found new blogs, listened to podcasts, and read the classic personal finance books, plus some that were more recently published from leaders of the FI/RE community (all checked out from the library, of course).

My now wife, Cassie, was a little skeptical at first (I’ve been known to have some crazy ideas in the past that don’t always work out according to plan), but after many conversations and dreaming up the life we want to live, she’s as excited as I am. (Though she leaves most of the research, planning, and general geeking out to me.)

This blog is a place for me to share the lessons I learn, my updates, stories, recipes — pretty much whatever I feel like writing down that’s related to money and living a good life. While it’s mostly just something I’ll use to keep me accountable and on track (and start rebuilding my writing habit), I also hope that it might be helpful to others who are just starting out or thinking about starting their own journey to FI/RE.

Oh, and the blog name? Well, I’m (soft) butch, my wife is femme, and I’m on a budget. Sort of.

Welcome, I hope you stick around!

A Little Backstory: Me, My Wife, and Our Money

Cassie and my relationship with money hasn’t always been the smoothest. In fact, at the beginning it was a bit of a roller-coaster.

We started dating long distance, but nine months after moving in together we had $15,000 in credit card and medical debt between the two of us, were both unemployed, were down to one very old car…and then our apartment flooded. This stressful first year living together was the catalyst for us to get our finances together, turn things around, and overall just live a better life.

For the full story and lessons I learned, check out this article I wrote on The Financial Diet.