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During college, my friends designated me The Hobby Fairy. That’s because I’ve had many hobbies over the years.

As a kid, I made do with what I had and explored my interests within my limited resources. My parents set the boundaries. As an adult with disposable income, hobbies became a way more dangerous category of spending. Even as a college student with not-really disposable income, I spent a good chunk of money on hobbies.

I know some people prefer free or inexpensive hobbies, but passions are tough to find, so if you find one that costs money, I’m all for investing in your happiness. What you shouldn’t invest your money in are fake passions you don’t follow through on, so before I spend money on a hobby, I try to ask myself these five questions:

Do I really want to do the thing or do I really just want to be occupied by the idea?

Many of my hobbies started out from admiration. I saw someone somewhere doing the thing and thought it was really cool. Pinterest and Instagram make it easy to see the photogenic end result of a hobby someone has worked multiple years to be good at. Photography, cooking, ceramics, knitting, climbing, yoga, the list can go on forever.

If you’re caught up in the dreaming or the idea, you just might make shopping for your hobby the actual hobby. We think to ourselves, if we can just figure out the best tools to help me do this thing, then I’ll become the best by using the best! It’s like we’re looking for a guarantee when the only guarantee is practice.

One big danger of spending on hobbies is over investing monetarily in a hobby before actually committing to it. I’ve naively fallen into this same trap many times.

Take the time I was in college and started watching an art student’s youtube videos on sewing her own clothes. I became obsessed with the idea of making my own clothes. I spent months researching different sewing machines and their various features. I also spent a ton of money on fabric and sewing tools like self healing mats, pins, and cutters. I only ever made one clutch and now all the stuff I bought sits at my parents house. I don’t even remember the Youtuber’s name.

What is the cheapest way to explore my interest?

There’s a difference between “just knowing” you’re going to love something and actually loving it. When you’re attached to the idea of how much more creative or healthier or stronger you’re going to be if you were into an activity, you’ll cheat yourself into believing you already know you love it. All you really know is that you would love to be more creative or healthier or stronger, which of course we would all love to be.

Spending money on a hobby that has the potential to make you better might feel like you’re putting your intention to work, but really all you’ve put to work is your hard earned money.

I’ve regretted all the times I skimped on actually verifying my interest. It’s important to know the difference between trying something out and investing significant financial resources in it because you already love it.

I’ve found Groupon, single classes, or even a friend who can give you a tutorial is a great way to inexpensively explore an interest.

I first got into rock climbing by going to a gym and getting a day pass. After I realized I really enjoyed that single session, I waited until I found a discounted one month membership through Groupon instead of automatically signing up for a monthly $100 membership. I even bought my first pair of climbing shoes for $30 off eBay because I didn’t want to invest $80-$100 on brand new shoes for an activity I might lose interest in a month later.

Have I shown my commitment to this hobby in the past?

There are times when an opportunity arises to spend more money on a hobby. When it comes to spending on a hobby you genuinely enjoy, a rule for myself is spending based on how much time and commitment I’ve already invested. I will spend on a hobby even if it’s not an absolute necessity.

I’ve spent money on multiple pairs of climbing shoes even though I haven’t worn through each pair. I’m ok with that because I commit 6-10 hours doing this activity every week. I plan entire vacations around climbing.

Compare this to painting. Painting is something I occasionally enjoy doing, and I own 6 tubes of paint. Sometimes when I’m wandering around Blick Art Supplies, I find myself gravitating towards buying more colors. But I can never justify the purchase because painting is something I do only once or twice every three months!

What does my support system look like?

A couple months ago, the assistant instructor at the aerial hoop class I attend asked me to sign up for an upcoming aerial hoop competition. The competition cost $90 to enter. Up until that point, I had been attending class once a week for 5 months with a regular gym membership. I was terrified. Who, me? Performing in front of people? On a real stage? Doing graceful showy things?

Self choreographing a routine seemed way over my head. I didn’t want to spend $90 just to realize I suck half way through and quit. Though it was a hard decision, I ultimately went through with it because 6 other people from my class signed up, and we set aside dedicated time Fridays, Saturdays, and Sundays to practice and help each other. I would’ve had an impossible time figuring out what to do if I had to do it alone.

Did you know marathons can cost $100+ to sign up for? I didn’t! But I’ve had friends sign up for races they didn’t even show up to. You know why? Because it’s really hard training for a marathon by yourself. It’s a huge commitment of time and energy to go it alone even if you love running.

What value will I get from spending on this hobby?

We value the things and experiences we spend money on. We can get the value in a number of ways. We can get it from experiencing more fun by doing something different or we can get it from pushing through a greater challenge.

There are tons of ways to get value from a hobby, but the focus of this question is figuring out what you’re really in it for. When I decided to enter that $90 competition, I wanted to confront my fear that I could never be graceful or put together enough to be a performer.

When I bought new climbing shoes, I wanted better fit and performance so I could climb harder. When I bought my blog hosting plan, I wanted to share my story and reach people who are as confused about their first steps into personal finance and their career like I was.

After answering these questions, I have a much better sense of what I’m trying to get out of my purchase and the likelihood of following through on making use of the purchase once it’s been made.

How do you decide when to spend money on a hobby? Do you struggle with over investing in them?

The post 5 Questions I Ask Before Spending On A Hobby appeared first on Millennial Money Diaries.

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I often hear people say “I know I should have a budget, but they just don’t work for me”. In this sentence, I almost always hear two sentiments.

Rules suck!

Being an adult means I don’t have to listen to other people tell me how I should run my life. Now you’re asking me to impose rules on myself?! Stop telling me what to do.

Sometimes rules suck. Like when Comcast tells you they have a rule that says they absolutely have to charge you a cable box fee even though you just want internet! But other rules are there to help you.

The rules in a budget are meant to limit spending, but also to free you from the guilt of wondering whether you’ve spent more than you want or can afford. A budget has your goals built in for you, so even when you forget why you’re resisting an opportunity to spend money, your budget doesn’t. And no one is making you do anything!

Failure sucks!

I tried to budget and it was hard. I couldn’t stick to the goals I set up for myself and now I feel like a failure.

I get it! Failure does feel terrible and shameful! But learning is good, and failure is self defined anyway. Missing your budget doesn’t have to mean failure. For example, when I lived in the NYC and shamelessly spent all my money, I never once thought I was a failure, at least not in the money management realm.

Yet this year in my goals, I proclaimed I was going to try and save 55% of my take home pay. Well, one month passed and I only hit 50%. I felt shame and failure even though compared to me 5 years ago, I was doing 1000x better. If we don’t set a bar for ourselves, it’s technically not failing if we overspend right? That type of thinking is wrong and everyone knows it.

When I dropped my computer science major in college, I felt like a failure. As cliche and annoying as it sounds, failure isn’t real until you quit for good. 3 years after I dropped my major, I went back to programming professionally. Then 2 years after that, I circled back around and went to a coding bootcamp. Now I work professionally building websites, which is what I always pictured myself doing as a high schooler.

Did I fail? Some might call me a failure because it took me 3 years longer to end up where I would have if I just stayed with my CS degree program. I learned so much about work, life, and play during that time. In no way do I view that time as a failure. It takes screwing something up to get it right. Trying things that don’t work lead you eventually to something that does which is why I’d like to share how my budget has changed over the years.

My Budget Evolution Kid/Teen Budget

Let go of the idea that a budget needs to be a sophisticated spreadsheet of numbers. Even as a kid, I kept a budget. It was unsophisticated. I call it a Threshold budget. A threshold budget just requires setting a number you won’t allow your piggy bank balance to fall under. Of course as a kid, I didn’t have many expenses so budgeting was easy. I skimmed off the cream in my piggy bank as long as I was still left with the threshold.

As a teen, I combined the threshold technique along with budgeting on top of that by saving for aspirational or large purchases. I was aware of how much money I had and if prom was coming up, I prepped in advance for all the expenses associated with it. I would estimate ticket costs + corsage + dinner out on prom night and make sure I had enough of that above the threshold.

I know many adults today who still use this method and it works really well for them! My friend who’s just as avid a saver as me uses this method for determining her spending money. She keeps her super liquid emergency fund in a checking account and never let’s her spending dip into it.

College Budget

Because of my work study job in college, my threshold went up. Before if I never wanted my piggy bank to dip below $100, in college the threshold was closer to $300. I only had a debit card until senior year, so it was really easy to see how purchases affected my checking account balance.

First Job in NY Budget

During the time I was unemployed, I continued to use the threshold budget. After I started my first job, I felt it was time to get my finances together so I started direct depositing part of my paycheck straight to a high interest savings account. I allowed myself to spend the rest freely. This is a pretty common budgeting technique actually!

This was also my first encounter with Mint. At the time it didn’t work that great for me. I didn’t have many expenses, and I only had 2 credit cards so it was still super easy to keep track of my spending (or specifically that I wasn’t spending more than was in my checking account). I gave up a few months after on Mint because I didn’t really feel I needed it. I never put in the time to figure out how to get Venmo to show up correctly. I also didn’t have my budget categories set up correctly so Mint would double count the same transaction. Every time I tried to do greater analysis on how I was spending, I would quit from frustration.

New Career in SF Budget

After completing my bootcamp in SF, I picked up Mint again because I found that I was saving way less than I thought I should. Clearly my old budgeting methods weren’t working anymore. After finding a job in SF, I had multiple credit cards to keep track of along with way more Venmo payments to friends than before. Mint helped me immensely this time.

I still direct deposited a set amount into savings, but I also thought I’d be putting leftover money from checking into savings at the end of the month. There was rarely any leftover money, and if there was, it wasn’t much. It’s true what they say, you spend what see and you save what you don’t. With so much more I could afford, I said yes more—to eating out, shopping with friends, ordering Ubers, and seeing shows.

There’s nothing wrong with saying yes, but I didn’t stop and ask myself if it was a good use of my money. I treated all the money I spent as if it were spent in a vacuum. There weren’t any real life tradeoffs to spending that money (like not meeting my savings goals). I couldn’t balance the spending among all these new categories.

In order to truly see how I was spending in every category, for the first time, I turned to creating a budget for every major spending category. I had little confidence that automatically direct depositing more into savings alone would fix my spending. I was afraid I’d be left pinching pennies the last two weeks of the month from not knowing how to even out my spending over the month!

This time I committed time to set up my Mint budget properly. Everything became super easy. Mint fits my lifestyle and budgeting needs at this stage in my life. I figured out how to to track Venmo. I figured out how to categorize things so transactions weren’t double counted. I also figured out a system for setting up rules that would properly categorize without leaving me constantly recategorizing the same things over and over. If you want to learn how I’ve been using Mint, you can sign up for my free Mint class below.

3 Reasons Why People Fail to Follow Their Budget

  1. They don’t track all their expenses
  2. They don’t make adjustments to their budget
  3. They don’t set realistic goals for their budget

In this course, I will teach you:

  1. A foolproof system for complete expense tracking
  2. How to setup a customized budget that fits your income, bills, and spending habits
  3. An easy system for quick budget adjustments and accountability
And more...
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What changed between my life in NY and SF? What changed between college and NY? Why did Mint suddenly work for me when it didn’t before? I’ve heard so many people hate on Mint, and then immediately translate that to hating all budgeting apps.

Not all budgeting apps are created equal. Not all people are the same. Mint, YNAB, envelope budgeting, spreadsheets, what’s most important is trying different ways of budgeting until you find one that meets you where you are.

So if you’ve failed so far at budgeting or some budget app didn’t work for you, don’t give up. Don’t hate budgeting forever! Don’t hate the app forever! Try to figure out what is and what isn’t working. Does the budget system not work well with your on the go lifestyle? Do you like seeing your spending everyday? Do you want something more low maintenance? Don’t blame yourself. There’s no one right way to budget.

What’s your favorite budgeting method? What other methods did you try before you found one that worked?

The post Stop Running Away From Budgeting appeared first on Millennial Money Diaries.

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While I was traveling from Las Vegas back to Oakland over New Years, I overheard a heartbreaking story of a woman telling her story to the couple next to me and my boyfriend at the food court in the airport. Her story had to do with job relevance and the impact it had on her financial freedom. I’ve always had some sense for the relationship between job relevance and financial freedom, but hearing someone tell their personal story is completely different.

The woman must have been in her 50s, and she was a janitor for the food court in the airport. She was overweight. She had handfuls of pills she had to prepare and take for various ailments during her dinner break. She prepared her medication with such standard routine it was hard to imagine how long ago she began acquiring each ailment.

The woman had been a janitor her entire life, but she very distinctly pointed out to the couple she was talking to a turning point in her life when that had become her career. She had started out doing janitorial work just to make it by and support her family. The job had enough flexibility so she could send her children off to school in the morning as well as be home to make them dinner and help them with their homework.

At one point in time, she considered transitioning to office work and working as an office assistant. However, the commute to this job was so far she would need to leave extra early and return home extra late. She wasn’t willing to trade time with her children in order to work an office job even if it would require less physical labor. So instead she stayed at her job.

A significant amount of time passed, and I can only imagine her children were grown, when she attempted again to transition to a career in the office. This time there was something different. During that time, technology had taken over the workplace, you needed knowledge of how to use a bunch of different software on the job. She expressed how she never learned to use tools like Microsoft Word or a calendar application. She remembered 10 years earlier feeling the ease of picking up new skills, but at that moment she felt the entire landscape of the working world had shifted. She no longer saw herself as adaptable enough to keep up. She didn’t know where to begin learning these new complex technologies. And so she stayed where she was, stuck with a very limited set of options.

I’ve seen many less extreme examples of this same phenomenon. During the financial crisis of 2008, I heard about many friends of friends parents who lost their 10-20 year career at the same company, laid off and unable to find a new company that would hire them. While they spend 30-40 years working to build valuable employable experience and skills, the new economy designated those same skills and experiences as outdated and irrelevant.

Two things really stood out to me while reflecting on this woman’s story.

Job Relevance Is Unpredictable

No matter what skills are desirable today, we really have no idea how a number of factors—technology, politics, economics, and more—will influence the skills that are valuable tomorrow. Working in tech, I see this emphasized every day. Every few months there’s some new technology that makes it easier to do my job, except if I don’t know how to use it, it makes my job hard. It’s not enough to just code well, I also have to keep up with these new technologies and learn all of them to stay relevant.

There are even companies working on automating my job. I just read this article about a company in Copenhagen that’s using machine learning to turn application mockups into raw code!

This really emphasizes the importance of working towards financial independence. Regardless of how much I enjoy my job, we really have very little control of where our industry may move 20 or 30 years from now. We also have very little control over the types of government programs like Social Security or Medicare that may assist us financially in the case that we aren’t able to work anymore. That’s why I learned to project the numbersI need in order to become financially independent, and you should too. I’ve made financial independence a goal.

Cultivate That Growth Mindset

Something that struck me about the woman in the airport was the turning point of her confidence around learning. The point where she lost the feeling of her own adaptability. I don’t want to assume anything about the things that happened in this woman’s life that brought her to the point of feeling resigned to where she was.

But I also realized that the mentality surrounding adaptability and growth needs to be trained. It’s like a muscle that atrophies if you don’t use it. It was a huge leap for me when I moved to San Francisco without a job to learn new employable skills. But it had also only been a year and half since I last transitioned careers. And it had only been two and a half years since moving to an expensive city without a job at all. In a way, I was used to having to adapt. If I imagine maintaining a stable career for 10 years then suddenly moving to a new city and training for a completely different role, compounded with potential financial and health complications, I could see it being terrifying.

We can feel a little better about the new and unfamiliar if we continue cultivating and reinforcing our ability to change and grow. Even if it means continuously doing something small or seemingly immeasurable, we can slowly build an internal portfolio illustrating our capacity to learn and grow that will boost our confidence in times of uncertainty.

Have you ever worried about the lasting relevance of your employable skills? Do you feel limited in your career options and why? Does the idea of change terrify you?

The post Heartbreaking Lessons From The Story Of A Woman At The Airport appeared first on Millennial Money Diaries.

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Here in the personal finance community, we talk a lot about financial independence. Financial independence can roughly be defined as having enough money to live life on your own terms. Financial independence equals never having to do what you do not explicitly choose to do. For many, financial independence also equals early retirement. An important question that comes with the idea of early retirement is WHY do you want to retire early? You’ve reclaimed your time, but what do you plan on doing with it?

I haven’t given much thought to this question. Though I love the idea of early financial independence, I know for certain I don’t want to have a retirement that just involves sleeping in and being lazy. If you’re in the same place as me and craving that freedom, spend some time really reflecting on what mission that freedom will serve for you. I’m still figuring out what that freedom would look like for me and what my mission will be, but I absolutely figured out how dangerous it is not to know.

I went home for the Christmas holidays at the end of last year for 7 days. I usually work remotely during the business days overlapping Christmas so I can at least physically be at home with my family during the holidays. This year I was super lucky that my new company had the last 6 business days of the year off. This left plenty of time to just be at home, sleep in, and laze about. Well, that got tiring and depressing really quickly.

Laziness Begets Laziness

Initially, it felt wonderful to have no obligations. Most of my old friends from high school weren’t in town. I hardly had anyone I needed to see other than my family. I didn’t have to work. It felt great to go to sleep until I felt refreshed. It also felt great to finally live slowly and not need to hustle to get anywhere or do anything in particular. However, what was initially a positive restorative lifestyle quickly devolved into an indulgent cycle of laziness. I was sleeping until 11 am, eating lunch, and taking a 2-3 hour nap until 3 or 4 pm! I started going to bed later and later until I was sleeping at 2 or 3 am.

The rushed feeling I felt while working revolved around trying to cram everything I wanted to do in a day. While I eliminated that particular sense of restriction by sleeping as much as I wanted and clearing my calendar of anything I had to get done, the feeling began manifesting in a different way. I started feeling that same restricted feeling because I knew I was sleeping away my precious time! I felt rushed not because I had so much to do but because I had so little to do yet I couldn’t seem to find the time or motivation to do it.

This entire time, I had so many aspirational work I wanted to get done. I wanted to get ahead of my blog posting schedule. I wanted to read this very long book I had just started and brought home with me. I wanted to find time to be creative and draw. Yet I hardly did any of these things. It was a nightmare. I couldn’t motivate myself to write or read or draw or anything really. None of these were out of reach but I no longer had the structure I needed that reinforced my motivation to push forward.

I found myself defaulting to the “easy” things like scrolling through my Instagram feed. I watched tons of mediocre rom coms on Netflix. Not to say I didn’t enjoy all of these things, but I was overindulging in them. It robbed me of a lot of the momentum I built while working!

Structure Your Mission!

After this experience, I realized how easy it is to become unmotivated and complacent even when you have all the time in the world to do the things you’ve always wanted to do. Wanting to do things and starting to actually do them are entirely different. Structuring time to complete your mission matters! In some ways, it was actually easier to fit in more of the things I wanted to do when I was working. It was easier because work is time blocked and everything else gets planned around it. It makes it more obvious where and when everything else you want to do should belong in your schedule.

When your calendar is a blank slate, as it would be in retirement, you can often times be left with decision paralysis. I know I personally ended up spending hours just deciding what to do, and by the time I actually made any kind of decision, it was too late to actually do anything! This was especially true when I was at home and sleeping in so late—I felt I hardly had any operating hours that overlapped with the normal waking world. Oh, finally made up my mind to go write after dinner? Well, now it’s 8 pm and all the coffee shops are closed!

I felt so much better towards the tail end of my vacation when I forced myself to leave the house. I made it an obligation. I hit up a local coffee shop with my laptop and actually got writing done! And because I forced myself to go in the afternoon, I even had time leftover to climb for 3 hours at the gym afterwards before dinner!

I totally get the desire to be free from the traditional 40 hour work week. Sometimes you just want to wake up, take all the time in the world to make coffee and breakfast, and work out at 10 am in the morning. Sometimes you just want to spend the afternoon cooking a great lunch and not have to meet some deadline set by someone else after. But I’ve also learned that some scheduled obligations actually make our own free time more manageable and valuable.

Why Are We Even Retiring In The First Place?!

Experiencing for just 7 days what it would feel like to retire without a plan or any structure led me back to my original sentiment—why do we so desperately want to retire early? Why is early retirement the holy grail? What are we reclaiming that time for?

Certainly a large reason is to escape the so-called rat race. Some people may want to travel. Others may want to escape the hard labor their job requires. Maybe some people hate their jobs so much they can’t wait to leave them as soon as possible. But I can’t help but wonder even if we left our current 40 hour obligations, how would we fill those hours?

Answering by saying “going to the beach” or “traveling” don’t feel like conclusive answers to me. When I was traveling in Vietnam, I had no idea how to fill my time. I spent my time going from coffee shop to coffee shop. I took in the scenery, but I couldn’t have sat there taking in the cultural differences of a new place for 40 hours.

While the possibility of early retirement is still a long ways away for me, I think it’s important not only to start thinking about what I would like to do during that time, but how to structure my time in a way that will force me to complete what I would like to do.

What do you think of early retirement? Does it appeal to you? Why?

The post My Glimpse At An Unmotivated Retirement appeared first on Millennial Money Diaries.

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Marketing driven holidays are always a funny thing. I’d be lying if I said I was 100% above holidays that seem to exist just for the sake of trying to get into your pockets. Valentine’s Day is as commercial as they come. I just learned in South Korea they celebrate on the 14th for 3 months straight! February 14 is the day women give gifts to men. March 14 is the day men give gifts to women. April 14 is the day singles commiserate their singledom by wearing black and eating black noodles.

But even with all the commercial drudgery the day brings, I still think it’s nice to celebrate the day and acknowledge your partner with something special. For those of us who are money conscious, we definitely want to find creative, inexpensive, and low key ways to celebrate it.

I’m sure you can do a simple search on Google and Pinterest and find tons of listicles of frugal date ideas that include having a picnic at home or going to IKEA to visualize your dream home together or even just cooking dinner together at home. Honestly, it really doesn’t matter what you end up doing as long as you get to spend time with the other person. But to really amp up the occasion even if you’re going to be staying home, cooking Blue Apron, and watching a movie together, I suggest you do at least these 3 things beforehand.

Clean the Apartment/House

Ambiance is everything! And I’m not referring to the typical low light, mood music. A couple Valentine’s days ago, Valentine’s Day weekend overlapped Presidents Day. Since it was a long weekend, my boyfriend and I decided to drive down to Monterey Bay for a scenic weekend. The two of us are pretty last minute people so the entire trip was super spontaneous and unplanned. We ended up calling a bunch of restaurants off Yelp on Valentine’s Day to see if they had any reservations available. Thankfully we ended up stumbling upon one that did!

The restaurant, space and service all ended up making it a pretty nice place, but the general ambiance was terrible, namely because all the other couples there. It seemed as if we had stumbled into one of the only restaurants where every couple seemed to hate each other.

The dining area of the restaurant was dead silent as every couple just ate in silence across from each other. It was honestly just depressing, especially since that was our first Valentine’s together! Meanwhile, everyone probably hated us because we got a little toasted on some key lime pie martinis and were laughing like we actually enjoyed each other’s company. The point is, whatever you do, even if it’s making dinner like you always do at home, make sure the scene is as right as possible.

One small tweak like this in the setting can make a world of difference in making the night feel more relaxing. My boyfriend and I are far from neat freaks so I can totally see us try to pull off cooking a dinner together in a completely disorganized kitchen and sitting down at a table covered with a bunch of mail and books. No matter how romantic we try to make the effort of preparing a wonderful meal together, the clutter of the environment is going to take away from that. Lighting a candle on the mess would just be a fire hazard.

Make A Plan

Don’t get me wrong, spontaneity is great and all, but if you’re like me and seem to cave under pressure right at the moment of needing to come up with a great idea, you should make a plan. For me personally, if I don’t have a plan, I end up caving to the easier routine which is usually being wishy washy and spending 30 minutes picking out a movie after spending 30 minutes before that picking what to eat.

I’m a complete believer in making something special just by amping up the daily routine a little. The easiest way to do that is through planning. If you’re going to be staying in and cooking a dinner at home, plan what dishes you’ll be making. It’ll make the grocery shopping way easier even if you decide to pick up the ingredients on the day of. Having a defined grocery list also leaves room for a touch of spontaneity since you can add some additional goodies that might catch your eye.

Similarly, if you plan on watching a movie after dinner, pick out the movie in advance. I hope it’s not just me who starts feeling like I’ve already seen everything worth seeing. You don’t want to be stuck feeling ambivalent about your options. And if your actual plan gets derailed by a different movie that suddenly interests you, you’re still committed to watching something you feel great about.

How I’ll Be Spending Valentine’s Day

While plans haven’t been completely finalized yet, my boyfriend and I settled on the night in option. We’ll be scheduling a delivery with Postmates from one of our favorite Chinese restaurants in Berkeley, and since we don’t usually “eat out” on weeknights, this will be a special treat for both of us.

To top it off, we wanted to do something a little different than the usual dinner + movie option, so we decided to order a 1000 piece puzzle to work on together. If we find enough energy after a delicious Chinese dinner, we’ll be taking a nice evening walk along the lake near our apartment with some hot cocoa and tea. The lake is cheesily perfect for the holiday because it is entirely bordered by overhead bulb lights, and its shoreline is shaped like a heart!

Do you keep things frugal for Valentine’s Day or do you go all out? How do make the day special?

The post My Plan For A Frugal Valentine’s Day appeared first on Millennial Money Diaries.

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Ah, the age old question of modern heterosexual dating. Who should pay on the first date? This always seems to become a hot and contentious topic whenever it comes up. Everyone has their own perspective on the question. Exchanging stories with various friends of what must be at least a hundred dates, it seems like there truly still exists a spectrum of expectation and answers surrounding this question.

I’ve even seen all sorts of ridiculous questions about it on the internet like “Should I go on a second date with a guy if he didn’t pay on the first date?” or “What is the best way for screening out free loading women prior to the first date?” I can see why these questions could be considered both valid and invalid. I’ve even changed my mind about the topic more than a few times.

When I was fresh out of college, I moved to New York City and started working at a 4 month internship with 6 other female new grads. The majority of us were single ladies, new to the city, and eager to test the waters of the post college dating scene. One of the first topics to come up was the question of who should pay on the first date?

One of my coworkers declared that the man should always pay. It was the man’s responsibility to prove himself to her. She also indicated that she never offered to pay because she found it disingenuous if she didn’t want to pay in the first place. She wasn’t the type of person to offer to pay without the intention to pay. I respected her honesty, that’s for sure! Being near penniless at the time after moving to one of the most expensive cities in the US with less than $1000 in my bank account, I found plenty of reasons to see her point. I came to the conclusion that it was the man’s duty to pay. After all, I considered myself a considerate and giving girlfriend, so eventually the man would reap the rewards of a happy relationship.

At that time, I went on a lot of OkCupid dates. I met my last boyfriend on OkCupid, and while I suggested a wonderfully free first date, we ended up hitting it off and grabbing a bite to eat afterwards. Well, guess what happened when the check came to the table? I awkwardly sat there and didn’t make a move as he put his card down and paid the bill. After we were in a relationship, he recalled how rude it was that I didn’t even make an offer to pay. He had even specifically recalled this detail to his mom after the date ended. D’oh. At the time I felt entitled to it.

After that relationship ended, I dated completely differently. I’m sure maturity had something to do with it, but economic advancement definitely played its part too. When my last relationship started, I was still trying to make it with my internship and second job at the shoe store! By the time I was dating again, I had been working as a salaried employee for a year and a half. I didn’t expect the other person to pay. I always offered, and I appreciated it even more when my date paid. Even so, I have to say it feels very nice and even normal when the man pays for the first date.

There’s obviously some social conditioning at play here! Why do we put so much weight on who does or doesn’t pay? Why do we care whether the person not paying at least offers to pay? I’m very curious what the financial part of this equation really means because issues around money usually go deeper than money. I polled a bunch of friends and coworkers on their reasons and expectations when it comes to this loaded question! The results are in:

Reasons The Man Should Pay

The Man Needs To Prove His Character To The Woman

A man proves himself as chivalrous and generous when he’s able to demonstrate the ability to put someone else above himself. By giving up financial resources, he is literally sacrificing a resource with the potential to bring value to himself exclusively, and giving someone else a valuable experience. This isn’t to say he gains no value from it, but he also pays for the other person’s half of the experience as well.

While this argument makes sense, I find it interesting that the man must demonstrate his ability to sacrifice on behalf of someone else through financial means, but it isn’t generally expected that the woman prove this generosity the same way. This is a complete generalization, but I think women are more often expected to prove their feminine qualities like nurturing and empathy. These are not easily proven through financial sacrifice.

The One With Less Opportunity Pays For The Company Of The One With More
This one makes dating sound super transactional, and I think sadly in the age of online dating, it can become that way. In every article about online dating, I often read that women on dating apps receive way more messages than men. This gives women the advantage of being ones with more opportunity in general. In this case, it may not necessarily be the man is paying, but more the person with less opportunity is paying as a way to show appreciation and genuine interest for the busier person’s time.
The Person Who Asks Should Pay, And The Person Who Usually Asks Is The Man

I feel like the question “Why are men expected to ask the woman out?” could be an entirely separate article, but it would be too far removed from the theme of this blog! I would say from my own experiences and observations that it is generally true the man usually asks the woman out, and he also picks the venue.

I think barring a date that is really inexpensive, it makes sense that the person who asks also pays for the date, and I can only imagine this is how it usually works out during the dating phases of same sex couples. The person who asks and picks the date venue is indirectly setting the budget of the date. It might be rude to assume your date can pay for half a very expensive date when she had no say in where it would take place.

Women Pay Upfront In Personal Care, So Men Should Should Pay For The Date Itself
I’ve heard this argument a few times. Women pay a lot for personal care products. They have to shave, do their hair and makeup, buy all sorts of outfits that make them look good on a date. There exists a level of expectation of how a woman should appear on a date, so the man is paying in order to subsidize this upkeep.
Women Pay In Emotional Labor In The Future, So Men Should Pay Upfront For That Now

I think this mentality is highly influenced by our previous relationships as well as the dynamic between our parents growing up. In my family, my mom definitely did more of the emotional labor (not to mention the physical labor of actually popping the babies out). Not only did she have a full time job as a teacher and was an equal financial contributor to my dad, she also did the majority of the work when it came to cooking, cleaning, and raising the children. My dad was in charge of the repairs and technology portion of the household.

Even living in a time when both men and women are more progressive in their beliefs about the division of financial, physical, and emotional labor, I think we still subtly fall into the gender roles outlined by society and our upbringing. If a relationship works out and women still do the majority of the labor, then it seems a small price to pay for the man to pay for the first date. This aligns more closely with how I was thinking about the topic right after college.

Gender Wage Gap
We’ve probably all read the statistics about the gender wage gap. Men are paid about 20% more than women in equivalent roles. If that’s the case, all men need to be subsidizing this difference!
The Man Is The Provider And It’s His Responsibility To Take Care Of The Woman
Men have long been considered the protectors of the family. When it comes to protecting the family, or more specifically, a potential future partner, it’s the man’s traditional responsibility to take care of all her needs. The needs may be physical protection, they may be emotional support, but they may also be financial needs. I was actually pretty surprised to learn this is how my boyfriend used to think about paying on the first date!
Reasons The Woman Should Pay

There seem to be no societal expectations around a woman paying for the date. The only time there is potentially the expectation for the woman to pay for the date is when she is the one who asks the man out. Again, this has to do with her being the one indirectly setting the budget for the date.
Reasons To Split The Bill

It’s Antiquated To Expect Otherwise
In the past, women were not allowed to own property or hold a job, so they were completely financially reliant on their husbands. Some restaurants even carried different menus for men and women. They provided a “ladies menu” which didn’t have the price on any menu items because it was not considered the woman’s responsibility to worry about the cost of the meal! Since women can both work and own property now, there’s no reason not to split the check because men and women are economic equals.
You Don’t Want To Ever See Each Other Again
I would absolutely not want my date to pay for me if I already know I don’t plan on ever seeing him again. I recognize that even people I don’t get along with work hard for their money, so I absolutely don’t want them to spend any money on me if I know I can never make it up to them by treating them the next time. Surprisingly, I’ve heard this reason a lot from others as well!
It’s Insulting To Imply A Woman Can’t Pay For Herself
I’ve heard many women say it’s insulting having a man pay for her when she is financially independent enough to pay for herself. It feels good to know you can pay your own way and afford it.
It Demonstrates Both People’s Progressive Values
Every type of person still exists in the dating world, including those with traditional mindsets around relationships. If you’re specifically looking for a partner with progressive relationship values, splitting the bill can help identify these people. Of course, splitting the bill and traditional values aren’t mutually exclusive, but it can sometimes be a helpful indicator.
Neither Person Feels They Owe The Other Anything

No matter how much we would like to believe otherwise, money clouds our judgment. Having someone else pay for us can create a feeling of indebtedness. Or it may indirectly shift the way we perceive someone. It has the power to subtly make us think more positively of someone, after all they are, in a way, sacrificing for us when they don’t even know us! Splitting the bill can smooth out the influence of the financial factors and allow both people to judge the true quality of their connection. This is the mentality I’ve personally adopted when it comes to why I always offer to split the check.

So what do you think? Who should pay on the first date? What are your reasons for thinking so? I’d love to hear any new reasons and perspectives too!

The post Who Should Pay On The First Date?! appeared first on Millennial Money Diaries.

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I’m a homebody at heart. On weekdays, I’m forced to be out in the evenings if I want to do any non-work related things, but on the weekends, I’m someone who loves being out and about during the day while staying at home in the evening. I generally love working in coffee shops or squeezing in an afternoon climbing session and having a good lunch/early dinner out. Outside of those activities, I’m generally not super drawn to being out at night. I don’t really drink. I don’t like loud or dark places, so it’s pretty rare to find me out in the evenings.

My most common Saturday date night has to be cooking dinner at home and watching a movie. My boyfriend and I have Netflix, Amazon Prime Video, and HBO Go so 90% of the time we end up watching a free movie or series. However, we do still like to rent movies when we feel in the mood to watching something new or different by “paying” to rent a movie.

When it comes to movie rentals, there are a lot of options. You can rent via Apple iTunes, Google Play, Youtube, Amazon Prime Video, and another large number of rental services. Most rental services have the exact same rental structure. You pay anywhere from $2.99-$5.99 for an HD movie, the newer the movie, the more expensive it is. Then once you actually start the movie, you have 48 hours to complete it before you lose access to the rental.

When I first heard about streaming movie rentals, I thought it was such a waste of money! Why not just opt to watch something for free on a service you already pay for? If you’re anything like me or my boyfriend, picking a movie is a huge trailer watching fest. We’re pretty indecisive because we want to spend a couple hours watching something completely worthwhile. When we turn to Top 100 lists and we finally settle on a movie, there are times we can’t find the movie on any streaming services we already pay for. Luckily, a friend told me about Google Opinion Rewards a couple years ago, and it’s become my source for movie money.

Before you ‘x’ out of this post rolling your eyes about yet another unbearable money making survey site article, hear me out! Currently I don’t use any other survey sites because I’ve just never found one that really worked for me. It’s always been really cumbersome figuring out how they work, how long the surveys take, and signing up only to realize I have to earn $100 in surveys until I can cash out.

Google Opinion Rewards is NOT like that. Google Opinion Rewards is a simple app (Android app here or iOS app here) that occasionally sends you short surveys on your phone and pays you in Google Play credit. The Play credit can be used on their Play Store, which anyone can use to rent/buy movies, books, music and apps. Even if you don’t have an Android phone, you can still use your Play store credit to get everything (though the apps are Android only).

The Way It Works

After installing the app and hooking up your Google account to it, the app will sit quietly in the background until a survey becomes available. When a survey is available, I get a little notification on my phone.

After seeing the survey starting screen disclosing how Google uses your survey responses, you can start the survey. The survey is usually 1-5 questions. I love that the app gives you a sense of where you are in the survey at the top (Question 1 of 5 or fewer, etc)

Once completing the survey, you will see how much that survey paid you in Play credit. It ranges anywhere from $0.10-$0.50. I have very rarely had a few surveys that didn’t pay anything.

Once you exit out of the payment page, you can see your current Play credit balance. You can also hit the menu and go to your Reward history to see how much you’ve earned. As you can see, I haven’t earned too much with this app—not even $100, which is why I think the credits I’ve earned are perfect for renting movies. The movies I rent are generally $3.99, so I’ve rented ~25 movies for free using my credit.

You can simply redeem your credit at the Google Play store. At the step when you would make your purchase, there’s a little checkbox under your credit card information opting in to use your Google Play balance.

What I Like About Google Opinion Rewards

1. It’s owned by Google, so I can expect very few headaches when it comes to actual usability. Other survey sites have so much going on visually and interaction wise that I don’t even want to spend the time to figure it out. You can figure this out in under a minute.

2. The surveys are SHORT. 90% of the time they are 1-5 questions and can be done in less than 30 seconds.

3. You can get the surveys on your phone. You get sent a push notification in your Notifications tray and as soon as you click on it, you’re taken right to the survey. No extra clicking.

4. It’s attached to your Google account. No logging into some app you hardly use with a username/password you can’t remember (my biggest headache, even since adopting LastPass to manage my passwords!)

5. You can use the balance immediately in the Google Play store. While you can’t redeem the survey rewards for anything else, you can redeem your money for apps, ebooks, and movies.

Things That Might Be Deal Breakers For Some

1. You don’t make much “money” from each survey. The effort for this app is low, but so is the payout. For 30 seconds of your time, you can look to earn about anywhere from $0.10-$0.50 for your work. This is definitely for supplementing your discretionary spending, not replacing your income.

2. There aren’t endless surveys. This app is usually dormant and there aren’t always surveys available. I personally get surveys sent to me anywhere from 5-15 times a month. I don’t mind this because the app is unobtrusive when there aren’t surveys and it doesn’t interfere with my day to day interaction with my phone.

3. You’re giving data to Google. I’m not someone who is paranoid about what Google is doing with my survey responses, but if I were, I wouldn’t be selling out my data for a few cents! They specifically note that they use survey responses to help tweek their ad targeting (you can still opt out of surveys that do so).

What do you think of survey sites? Is this too little money to entice usage or would you opt in for some free movies?

The post How I Rent Movies For Free With Google Opinion Rewards appeared first on Millennial Money Diaries.

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Have you ever stopped to wonder where your beliefs came from? It could be any belief, not just a financial one. You may have an idea that you have to outperform everyone at work for recognition. You may believe that you’re a great romantic partner. The point is, we all have some ideas about our identity that are formed from personal experiences. Similarly with finances, I’ve developed a certain set of ideas about money and its relationship to me.

There have been many moments in my life where I was just shocked by someone else’s beliefs. They always end up being jaw dropping moments where I wonder if I’ve set the bar high enough for myself. Last year at a holiday party, a guy was talking about his goals and dreams and stated he wanted to make 50 million dollars or and donate 90% of it to charity. I remember thinking it was a little crazy. I didn’t know him, so I don’t know whether he was the type who was actively hustling to get to where he wanted or if he was just a complete dreamer. While I can’t see myself in a scenario where I could ever care to make that much money, it also made me stop and wonder, what IF that was my goal? What would I be doing differently, how would I have to think differently, if it really even occurred to me that was within reach?

It made me wonder what role models did that guy encounter in life? What were his beliefs about money? In what other interesting ways did he define himself? If we feel we can’t make it to the level of wealth we want, what are the things holding us back?

Where Did You Develop Your Definition Of Wealth

Our first models of managing money are parents. But we don’t just adopt their money habits, we also adopt their mentality around building wealth and saving.

My parents immigrated to the US as graduate students. My dad started out working shifts as a night guard for our gated student apartment complex to make enough money to pay rent during school. My mom worked part time as a waitress at a Chinese restaurant. Thankfully they spoke English, were well educated, and ended up in stable careers after graduate school.

Growing up they often said no to trips my friends and their parents would go on. My friends’ parents were investing in rental properties while my parents felt fortunate just to purchase the home we lived in. They did it to save money instead of keeping up with the Joneses. I remember what a momentous occasion it was when my parents finally caved and got DSL and a family cell phone!

Due to all these small actions and deliberate decisions to upgrade their lifestyle only in certain ways, they subconsciously demonstrated how they had built their wealth only through saving. We only had what we did because my parents prepped so far in advance by saving for it, it was really their only option as moderate income earners. To this day, my parents make less than I do combined.

And it was only until a couple years ago that I realized there were 2 sides to the wealth growing equation. My parents spent their entire careers in jobs that had very rigid pay structures. They barely ever got things like raises, so it had never occurred to me that wealth could be built by making more money. Maybe that’s why salary just never really mattered to me pre-college graduation. I knew you could live a comfortable life on any salary by being good at saving. The issue with focusing only on saving is you can never really increase your savings rate beyond a fixed point. You can only keep cutting down your spending and expenses so far.

My boyfriend grew up in a household that more apparently demonstrated the other side of the wealth growing equation. For the majority of my boyfriend’s childhood, his father was the breadwinner of the family. His father is a lawyer, and through him, my boyfriend subconsciously learned the power of wealth building through a high salary career.

After he began working, he was always able to afford the lifestyle he lived, but he neglected the saving half of the equation. He believed if he could always earn more, then there was no reason to deliberately focus on saving. The issue with focusing more on the wealth growing half of the equation is that it doesn’t prepare you to ever stop working. Going back to school or changing careers can even put you in debt because you need to take out loans or can’t afford the lifestyle you used to live when more money was coming in.

By identifying where we picked up our beliefs about how to build wealth, we can then figure out which parts of the wealth building formula we’ve been ignoring, giving us an easy starting point to level up our finances.

Identify Your [Negative] Money Beliefs

Looking at how my parents first formed my initial ideas around building wealth, I also realized I picked up some other not so healthy ways of viewing money. Growing up, my parents always encouraged me to be a doctor because of the career stability and salary. But I didn’t want to be a doctor.

My parents were so focused on selling the idea of being a doctor that it became the only path illuminated to me. In my eyes, I saw only 2 options: being a doctor and making money or being anything else and not making money. I suddenly developed many ideas of money being evil, money being something you only earn if you’re willing to sell out for it. I also started believing that money doesn’t matter because I just couldn’t fathom a life of going to school for 8 more years, being in debt, just to be a doctor, a profession I just didn’t see myself in.

I saw money and doing something I enjoyed as mutually exclusive. This view of money became so ingrained in me that by the time I learned about many other lucrative careers, even careers I could genuinely enjoy, I couldn’t even conceive of enjoying them simply because I knew they paid well.

It wasn’t until many years later, and multiple years of work experience doing work I didn’t love for terrible pay, that I was able to disentangle the idea of doing work I enjoyed and being paid good money to do it.

Question Your Junk Beliefs

You may have completely different negative beliefs about money. Some people may feel working a second job to make ends meet is beneath them. Or others may believe they’ll never be able to change their career at some certain age. We use examples of how this is true to reinforce our junk ideas about money, and we make excuses for why stories that don’t are exceptions.

I wish I had forced myself to open my mind a little more about the possibilities. Did younger me seriously believe that out of the thousands of careers out in the world, there was not a single ONE that I could both enjoy and make money from? It’s statistically unlikely! I simply didn’t want to do the hard work of finding out which careers were at the intersection.

Similarly for any negative money belief, there’s probably at least some scenario you can realistically picture where your belief isn’t valid. It may take a ton of work to make that scenario happen, but it’s not as impossible as it may seem. Realize that there’s actually a huge difference between barely possible and impossible.

Dig Into The Experiences and Expectations Of People Around You

I remember in high school hearing stories about some kids being the first in their family to go to college or the first to be doctors. I remember wondering what the big deal was? Now I totally get it. It’s about the uncertainty. We take for granted so many examples that have been shown to us and the guarantee that things proceed in a certain way.

When you don’t even know how to submit a college application the “right” way, or you don’t know what the types of grades you should be getting to get into college, how can you expect it’ll be easy?

I saw this in myself when my friend said making $500k a year would not be enough for him. I realized later his expectations are so high because his father runs a very successful commercial real estate business. He genuinely expects to one day become a C-level executive or start his own successful business. I’ve never had such lofty dreams because it’s never even occurred to me that’s possible. The distance between our beliefs about money and our career are miles apart.

Even with this distance, I realized that we aren’t so different to warrant such a difference in our potential. I remember reading about athletes that would break world records and suddenly other top performances in the sport would break the same record shortly after. That breakthrough moment where the status quo is shattered is so important, and the best way I know to do that is to read and hear about the experiences of others.

Empower Yourself By Thinking Of Something Else You’re Great At

Last year, I went with my boyfriend to a Tony Robbins event, and one my main takeaways was an exercise we did called the Wheel of Life. The premise is that there are roughly 7 areas of our life that we want to constantly improve, these include physical body, relationships, finances, etc. And for this exercise, we were to grade ourselves on a scale of 1 to 10 on where we are today vs. where we want to be. We were then asked to share these with the people next to us.

It was really interesting seeing how we all have a couple areas of life we feel we excel in, or that we feel “on track” to our ideal target. Then there are some other areas that we feel negatively towards or avoidant of. The woman next to me, a doctor who came all the way from France, actually marked Finances as one of the top things she felt really negative about! When reflecting on why we were successful in the areas we felt good about, I remember being struck with the response well why wouldn’t I be good at x, I’m doing everything right? Yet when we were asked to think about why we were doing poorly in other areas, I had a million reasons that were stopping my progress.

Through the exercise you really get to see that at the end of the day, you do really well at what you’re currently good at because you sought out the correct strategies and never really wondered whether an accidental misstep could ruin your progress. I certainly realized how much doubt surrounded all the things I felt badly towards that I wanted to improve on.

Now if I ever feel something is totally impossible, I think about how I feel when I think about my finances (something I feel pretty damn empowered about!). I think of how I don’t ever doubt that I’ll keep investing through a recession. I never doubt that I’ll be able to figure out the right thing to do, even if I don’t know what that is now. It occurs to me that I could lose everything (financially), but it doesn’t really occur to me that I couldn’t figure out how to start over.

If finances is that one thing you feel you can’t get a hang of, think of something else you’re great at. Think about how you feel when you mess up in the context. Think of how you feel at the prospect of failing, do you even think of failing at all?

Do you have any junk financial beliefs? What are they? I’d love to hear how you overcame them if you have!

The post Clean Out Your Junk Financial Beliefs appeared first on Millennial Money Diaries.

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In mid-December, I started a new job. Along with that new job came a few very nice financial bonuses. A signing bonus. A larger paycheck from a pay raise. I had maxed out my 401k by December so both my last paycheck and first paycheck in December were larger than I had been accounting for in my monthly budget. I also cashed out a few vacation days from my old job. All in all, this summed up to a pretty hefty windfall.

Being the responsible personal finance blogger I am, I declared that I would save all of it. But the resolve and accountability pretty much ended there.

How I Blew My Windfall

So you might be wondering at this point how I managed to blow my windfall. Well I’m happy to report that I didn’t spend all of it. The issue was I did very little to track the other smaller bonuses that came in the form of larger paychecks than I was used to from not needing to contribute to 401k and my extra vacation payout.

Because I wasn’t actively tracking these smaller and gradual payouts and what portion of it exceeded my regular paycheck, I didn’t give that extra money a job so of course it ended up getting spent. How did I lose track of it? Quite a few ways actually!

  • I had no idea how much larger my last paycheck from my old company was because I have automatic deposits setup. The last paycheck got automatically split between Checking and Savings. I didn’t do the due diligence of spending 2 minutes to add up the deposits in both accounts and comparing it to my regular paycheck.
  • I had no idea how much of the extra money in my last paycheck was divided between vacation payout and excess from not needing to contribute anymore to my 401k. I also failed to do the due diligence of shooting off a 5 minute email to Payroll asking for my last paystub to see the breakdown.
  • I had no idea how much more my new paycheck was on a per paycheck basis.
  • I accidentally opted into my new company’s 401k early and ended up getting money deducted out of my paycheck. I had to ask Payroll at my new company to refund the money since my 401k with my previous employer was maxed. This caused me to lose track of the “real” amount my new paycheck + bonus was because the refund came 1 week later.

I’m disappointed to admit that I blew a significant portion of the non-signing bonus portion on a new phone, gifts, and outdoor gear. I also didn’t properly account for how much it would cost to tie up loose ends at my job and ended up having to get a temporary Verizon phone plan in order to transfer my original phone number off my company’s plan. This resulted in 2 cycles of expensive phone bills just for the privilege of buying back my phone number!

I should have known better. Even though I was good all year, I can’t say December is ever an easy month on the wallet. I do believe in splurging on gifts for the people close to you. And I had a hefty wishlist of items at this point I had been eyeing all year but holding off on. This all came to a head knowing I had this extra money. The little devil on my shoulder convinced me “What could it hurt dropping $1000 on these things you’ve been wanting?”

I call this opening the spending dam. When we have a budget and we’ve accurately projected our spending, we’re more likely to stay within the budget even if we go over by a small amount. But when we completely fail and miss our budget, it opens up a spending dam where we start thinking “What’s the point?” and money pours out of your wallet.

Why I’m Ok With Blowing My Windfall

Ultimately I’m ok knowing I blew part of my windfall. I set some aggressive financial goals for last year and I exceeded them earlier than I planned! While I do think we should be conscious of treating ourselves too frequently and feeling entitled to rewarding ourselves for a bad week [every week], I think an unaccounted for treat every once in a while for actually meeting/exceeding a measurable goal is totally fine! Life is meant to be lived, and honestly I don’t think I could have survived my winter camping in Red Rock Canyon without my 20 degree rated down sleeping bag!

I also feel comfortable with the fact that I didn’t exactly uphold my money tracking and planning principles during a few moments of weakness at the end of the year. Do you know why? Because I’m human! Psychologically punishing myself over an ultimately small amount of non-optimized spending isn’t going to make me feel empowered to actually do something about it next time. I’m completely cool with the fact that even though I’ve spent months on developing a money management process that works for me, there’s always room to improve and tweak it.

What Did I Learn From This Experience?

I was honestly disappointed the most by the fact that I completely lost visibility into my cash flow for the month, which hasn’t happened for a long time. I thought I was doing a great job by saving the entire signing bonus, but I realized I had no idea where the other money went.

You know how you can identify someone who doesn’t know how they spend their money in a given month? You ask them to break down their budget and where their money is going. Someone who doesn’t really understand their own spending will answer with their income as cash in, and they’ll answer with rent, utilities, fixed payments, and maybe groceries as cash out. They make no mention of how much they spend on eating out or discretionary fun.

Last month, this was me. I had no idea ultimately how much came into my bank account by the end of December, and I don’t really know how much went out of my bank account, especially in relation to my typical monthly budget. I do know I was about $1000 over in the Shopping category. It could have been $1500 over though. I just really have no idea (still!)

I learned how hard it is to adjust your spending and track your money at the same time when you’re not even sure what amount you can really expect. Man I feel for contractors and freelancers everywhere! I also realized how much I ended up splurging on things that had been on my mind for a while. I don’t have great insight into why I suddenly felt December was the perfect time to scoop up all the things that had been sitting on my mind, though I do believe knowing I had the windfall coming helped justify it in my mind.

What I’ll Do Better

The easiest solution would have been to decide upfront how much money I would allow myself to spend. While I didn’t know the exact amount of money I would end up receiving, especially how much of it would be taxed, I allowed that unknown to make me lazy in assigning a plan for it. I could have even used a spending waterfall technique to plan for how much I would take out of each paycheck to spend.

For example, my first paycheck came mid-month with my vacation payout and 401k excess. I could have immediately made a rule for myself saying I would allow myself to spend all of the extra money from this paycheck and not any more from the following windfall paychecks.

Ultimately it’s important to adjust your budget appropriately when a windfall happens. If we want to reward ourselves when a windfall happens, it should be prepared for!

How did you handle your financial windfall? Did you handle it with responsible diligence or did you break and go a little splurge-y?

The post I Thought I Saved My Financial Windfall But I Actually Blew It appeared first on Millennial Money Diaries.

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