Is your spouse really “disinterested” in the finances?

Or is that actually an example of personality differences? Just because your spouse doesn’t want to spend endless hours going over spreadsheets, charts, and forecasting, doesn’t mean that they are disinterested in the finances. Or at least that’s the case in our household, where we both had money management systems in place when we got married. I could also imagine that one spouse being intimidated by the other spouse’s financial knowledge could resemble “disinterest”, but I don’t want to speak to that since that wasn’t our situation.

As I said in a previous post: one of the lessons I’ve learned so far about married finances is that the tools and systems that worked for each of you single are not necessarily the same tools and systems you should use when you are working together as a couple. It’s important to take into account both spouses’ preferences when you’re figuring things out.

My husband’s system when he was single was pretty simple. He had Mint connected to all of his accounts and looked in on it every few months. He maxed out his 401(k) throughout the year and had a portion of his paycheck direct deposited to Vanguard directly. He contributed the full (Backdoor) Roth IRA contribution at some point in the year when he felt his cash position had some room to spare. He carefully researched purchases before selecting items. A month or two after his bonus(es) would hit his checking account, he would rebalance his taxable Vanguard account. He would occasionally check in on things and exclaim about exciting milestones! and round numbers!

Does that sound like someone who doesn’t care about his finances? No, not at all.

My systems, in contrast, were pretty complicated. I started tracking my money before Mint started in spreadsheets, and then in software custom built by myself. I would excitedly download my pay stubs every pay day, as soon as I got the email notification a day or two in advance and update my tax spreadsheet with the exact numbers to the penny. (An ex-boyfriend was worried I lived paycheck to paycheck because I was SO excited about pay day!) When I got a raise, I would re-calculate what % I needed to contribute to my 401(k) to max it out with my last paycheck of the year and I would adjust it. I checked in on my 401(k) transactions every month, to make sure they happened as planned. There were months where I would adjust my 401(k) contribution allocations every month, which was completely overkill. I was never a fan of splitting my direct deposit, preferring to split it myself exactly on pay day so I could allocate the updated balance of my savings accounts to that month. I budgeted down to the penny every month for years, checking in on my spending daily for years until I slowly reduced it to weekly, biweekly, and then mostly monthly. I allocated my bonus(es) within a day of them appearing in my accounts, preferring to allocate manually rather than set up automatic savings or investing other than my 401(k).

My level of caring about my finances constitutes a hobby. I like to compare it to exercising. How much time do you need to spend exercising to be reasonably healthy? Anything past that becomes a hobby. If you average 20,000 steps a day and go to the gym daily, exercising is more in line with being a hobby for you than being strictly necessary to be reasonably healthy.

Compromise in any relationship is important! No spouse should dominate the decisions and both spouses preferences and dispositions are important. I was always slightly jealous of unmarried couples who split expenses by both partners regularly updating a spreadsheet! That is not us. I am the spreadsheeter and my husband is not.

Our first attempts at tracking our spending together resulted in me doing my exact single systems for our joint spending and for my own personal spending, which turned out to be a lot of work. I was spending far more time than ever doing the manual work of entering receipts weekly (one hour) and reconciling and pulling into a spreadsheet once a month (at least an hour). It turns out that two people can make a large number of transactions – not a day goes by without us making at least one transaction. We’ve averaged 160 transactions per month (which counts a transfer as two transactions) through April of this year in YNAB, which works out to 40 transactions a week – no wonder it was taking me an hour just to enter them! That was a huge time commitment for very little value. YNAB is far more helpful at accomplishing the parts I do value with less time commitment than our previous system was.

My husband’s employer switched from paying him monthly to biweekly recently, which caused me to suggest that we allocate new money more often in YNAB. My husband said that our current system of allocating new money on the morning of the 1st of every month seems to be working, so we should keep with that. Since we can fund the whole month on the 1st, that seems like a reasonable compromise to me (more frequent fidgeting is fun, but not strictly necessary), though it certainly is difficult to watch the “To Be Budgeted” stay really full for a couple weeks now since all of the May income actually came in around mid-month. I am patiently waiting until the 1st because I would rather allocate the money together than do it by myself now without my husband’s buy-in. In my parents’ relationship, for example, one of them does all the budgeting with no buy-in from the other spouse, which results in the other spouse just spending freely and “blowing the budget” every month, to the frustration of the budgeting spouse. That’s not how we want our relationship to work.

For us, the best money system is one that both spouses contribute to, not just one spouse.

I still have fun with spreadsheets! I occasionally do budget forecasting, but I never save it unless we were doing the budgeting together. I update the net worth spreadsheet on the 1st of the month, rather than throughout the month like I used to. This means a lot less time spent on spreadsheets and a lot more time spent reading books and exercising. Every month, I show my husband the month’s updated spreadsheets and charts and ask him what his favorite of the charts is. In February, the chart he thought the coolest was the one that showed we had lost tens of thousands of dollars of our investments in the stock market.

I spent the time researching mortgage rates and presented all of the options. We made the final decision on which new mortgage to pick together, but I did all of the research. There are plenty of other times that my husband does more research than I do, e.g. the hours he spent researching which new camera lens to buy recently and the hours he’s spent researching a barbecue that he still hasn’t decided between the final two options after many hours of research over the last six months because he just isn’t sure it’s worth spending $X more for a specific feature. To me, it’s perfectly reasonable for one spouse to do more of the research, but both spouses should be on board with which funds to actually allocate their investments in or which mortgage type to choose in the end.

Readers, how do you compromise with your spouse on your money management systems?

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Married Finances: Budgeting 2018 with YNAB

I talked previously about how something had to give after our expensive 2016 and 2017 years. My husband has never budgeted, but I used to have complicated budgeting spreadsheets. Trying to mesh those two strategies resulted in us not really staying on top of our spending as life changed over the last year, so at the end of December, we set up YNAB.

One of the lessons I’ve learned so far about married finances is that the tools and systems that worked for each of you single are not necessarily the same tools and systems you should use when you are working together as a couple. It’s important to take into account both spouses’ preferences when you’re figuring things out.

My spouse and I have similar money values (living below our means, saving for retirement, index funds, high-interest debt is bad, etc.), but we have very different personalities. For us, I am very detail-oriented, worry about money, and check in on it regularly while he is very easy going, likes automatic payments and checks in on things on a less specific pattern. His form of budgeting has always been to carefully consider purchases and then buy things he values and plans to get good use out of. That means that we respect each other’s purchasing choices fairly well, which is good, considering how different our money personalities are!

Our previous systems all involved a bunch of manual reconciling into spreadsheets by me. Mint didn’t work for us because we didn’t want to associate say all of each of our Chase credit cards – we just wanted to partially share credit cards. PC was better in that it let us pick which specific accounts to associate from our Chase logins (as an example), but I didn’t like that you had to wait until transactions posted for them to appear in the app. Neither of these tools were very good with the various special assessments our condo association has been doing or the fact that no month is really normal for us, so I was left with a lot of spreadsheets and manual tracking. Last year, I had a spreadsheet that I used to manually track against our budget for the year, but there was no system for when we eventually started going vastly over the budget, other than every time the checking account balance could no longer pay the credit cards at the end of the month, we put in a few thousand more dollars. The good thing that came out of our method of budgeting last year though was that my husband learned that I’m not going to stop buying groceries just because we used up the grocery “budget”, so he was cool with us trying YNAB. Needless to say, our cash flow needed some improvement.

We have now used it for two full months and it really feels like the best tool we’ve tried so far! It marries all of the features we had liked about the previous systems and (for us) minimizes the cons of each of them.

iPhone app

We both have the app on our phones and iPads, which is a huge improvement of visibility versus my husband not wanting to damage my spreadsheets.

It has manual entry with the phone app, which even has geo-tagging for where you were when you logged the transaction. That means that both of us enter the transactions on the go at the time of purchase now and subsequent times you go back to a place, the entry is usually even easier since it populates the category and account info based on what you used on your last transaction at that merchant. This beats our previous system of me collecting all of the receipts and spending an hour or more manually entering them every weekend. It also beats Mint/PC not knowing about checks we wrote (we write about 25 per year) or getting the wrong amount at the gas station or being full of pending transactions that never post. New con of this: receipts now pile up in my wallet for months since I never check on them.

I like how the app has an “inbox” of tasks you should do, which covers approving scheduled transactions, approving imported transactions that it matched to ones you had manually entered, and categorizing transactions that you did not enter.

The app lets you pin categories to the top of the budget screen. I pinned most of the food categories so that I can easily see them since those are the main categories I spend on while out.

Cash flow

We learned that a lot of our cash flow this year is in the first half of the year. Hopefully with YNAB, we’ll feel less of a cash flow crunch at the beginning of 2019 since we will use our low spending months at the end of the year to set aside for the expensive things at the beginning of the next year. Why is more stuff due at the beginning of the year? Car insurance comes due in January and July, but we hadn’t been setting aside money to pay for the January car insurance, so we had to pay the full amount in January. Property taxes are paid in April and October, but we only started setting aside the money in January. Utilities are more expensive in the winter months. Condo and umbrella insurance is due in July. This year, we only planned on trips in March and July, aka they will be mostly paid for in the first half of the year. Our theater subscription renews in May. Our condo association did a small special assessment that is due in June.

I like that it’s really flexible and forces you to cover your spending you didn’t plan for, before rolling over to the next month. That’s a key piece that was missing from our previous system. It does roll over positive category balances to future months, which is great. It wants you to “roll with the punches” as you overspend, but so far, we have determined we would rather keep a $1,000 buffer in the checking account and then deal with the overspending at the end of the month unless there was something big since that way, we can both sit down together more easily to look at it instead of just one of us dealing with it throughout the month.

YNAB has significantly reduced my stress about where the money is coming from to pay the bills because now I know that we will be ready to pay the county the over $2,000 for property taxes next month and all of the credit card balances are covered by the checking account because it’s all accounted for in YNAB. I do really hope it is a long time before we have a $10,000 credit card payment again like we did two months in 2016 and one month in 2017, but if we do, it’ll be accounted for with far less stress.

To me, a budget is less about being restrictive in how you spend your money and more about managing cash flow. Our end of month checking account balance in 2017 averaged $5,659.12 and now it’s almost $20,000. No wonder I am a lot less stressed about paying the property taxes this year!

Import and automation

Even though YNAB suggests you manually enter your transactions, the online version which we are using automatically imports transactions from the banks you connect to it, which means that it if you forgot to enter a transaction, it brings it in for you. It also means that it automatically clears our manually entered transactions when it finds them through the bank, which is awesome. That used to take me so much time logging into each bank to check on the transactions!

Scheduled transactions, even recurring ones, are awesome. My manual system didn’t have recurring transactions, though it did have scheduled transactions. I also like that YNAB makes you “approve” a scheduled transaction when its day comes, reminding you that you are still paying for this thing. We don’t have a ton of recurring transactions, but it is useful.

Budget categories (and groups!)

We both love that you can name category groups and categories however you want. Mint, for example, doesn’t let you make new category groups, just categories and you can’t make new categories from the app. PC doesn’t have category groups, just categories. I really like to be able to see all housing items together, for example. We each have our own category group for personal spending and then we get to make our own categories in there as we prefer.

I like how for each budget category, you can set a separate goal. This is great because we made a budget category for each specific thing. So for example, in our “Housing” budget category group, we have the mortgage, condo fees, cell phones, and internet with monthly funding goals. The property taxes have a target balance date goal, so right now we are setting aside 1/8 of the bill each month; in May, we will set aside 1/12 of the bill; in November, we will estimate an increase for the 2019 year. For the utilities, we budgeted for the estimated winter bills and then in May, we will start setting aside an average for the year. For the condo insurance, we are setting aside 1/7 of the bill until July and then after that, we will set aside 1/12 each month. This sounds somewhat complicated describing it, but YNAB makes it really simple and I don’t have to do the constant different fidgeting with formulas that I did before. Plus, now I can see all of these things in the app! This all is especially awesome because I find that no month is really “normal”. I also like that all of these balances just build up until we actually need them and don’t require much effort to work towards.

If you have goals set up for your budget categories or scheduled transactions, then when you’re budgeting for the next month, you can select a number of budget categories and use the “Quick budget” functionality to cover those amounts, which makes having many small categories really easy to budget for.

My husband thought I was silly to suggest budgeting for driver’s licenses, trusted traveler programs, passports, etc. until we added up how much we should set aside for those and it added up to about $20/month for both of us combined, which surprised him.

Credit cards and accounts

I really like how it handles credit cards. It seems to confuse people on the subreddit, but it makes SO MUCH sense to me and is really how I handle them in my head. For much of 2017, I manually paid all of the credit cards on the 1st of every month to help me feel comfortable with the balance in the checking account, which was an annoying time sink. Now, I’m happy to let them go on auto pay again and not worry about it. (Though I did pay one in full recently when we got the statement and the card hadn’t had any activity in most of a month and its under $5 balance was annoying me.) The side effect of this is that our checking account now has a ridiculous amount of money in it (almost $20,000), but it is all accounted for, so I’m happy with that. Basically, they say that if you had $100 allocated for Groceries and you spent $50 on Groceries on a credit card, then they move the $50 allocation from Groceries to that credit card.

I like how easy it is to manually create an account for something, like the gift card balances on each of our Amazon accounts.

I like that YNAB mostly shows you the “working balance” for an account, so for example, your checking account with all of your uncleared checks already subtracted from it. PC wasn’t very good at that, which would bug me when *I* knew I had spent money, but the app I was using didn’t know about it yet!

Savings

The slightly weird thing to me is that they want you to assign jobs to all of your dollars that YNAB knows about, including to any savings accounts. We haven’t had a lot of extra monthly cash flow lately with only one income, but we do have a target category balance goal for our primary savings account to get up to three months expenses in our joint savings account. I also have a budget category for “Vanguard taxable” that we will soon assign some dollars to.

Reports

 

 

I like the online spending reports. They are generally sufficient for my interests. You can see a pie chart or a stacked bar chart of your spending for any date period you specify and if you pick the stacked bar chart, it gives you one for each month. You can also exclude categories from it. (I’ve excluded the mortgage payment, for example.) You can also get a pie chart or stacked bar chart for a category group too. The phone and iPad apps have “Age of Money” and “Net Worth” reports, which I care less about than the spending report, since I really prefer to only check on “Net Worth” on the last day of the month.

Time

The time cost feels way lower than our previous system. 30-60 seconds to enter a transaction at the source, especially with 3D Touch to get into the transaction screen of the app. I spend a couple minutes most mornings checking the “inbox” of transactions to approve and leaving my husband to categorize his. Now that we have things mostly set up, our end of February “budgeting meeting” took about 30 minutes to consider our February over spending and set up a budget for March. I try really hard to not tinker with the system other than that meeting. Every couple weeks or so, I log onto each bank and make sure that the balance on each account is the same as what YNAB knows about (which it usually is) and click “reconcile”.

Misc.

We both like that they are actively working on the software, which is not something that we have the time for with my homegrown software.

As always, this post is not sponsored – this is simply my review of how we’ve been using this system.

Unbudgeting in 2016: reflections halfway through

It’s no secret that I spend a lot of time tracking my finances and I love that! I realized though as grad school kicked into gear that I have too many systems that require me to perform some actions on a specific date, which is problematic when grad school is more important than micromanaging my finances.

So I decided to unbudget in 2016.

What does this mean? I still tracked my spending via the normal ways, but it won’t be time sensitive anymore. I’ll be able to track my spending a month or two later with no effect on anything.

My spending has been relatively consistent since graduating from college. If I throw out the highest year (the year I bought my condo), my spending averages out to $44,000 per year. For 2016, instead of micromanaging how much money my checking account gets each month and it varying a ton, I just took my 2015 annual spending ($48,000), divided it by 12, and gave myself that amount each month. I generally know how much will debit from my checking account each month (credit card bills, mortgage payment, HOA dues, and property tax payments), so I’ll be able to do a quick check by looking at my balance and seeing if I need to add a bit extra.

Why did I do this? It seemed like an interesting experiment, especially since the system of detailed budgeting I used from 2010 through 2015 was largely unnecessary with the huge difference between my income and my spending. This is also essentially what my boyfriend does, so I wanted to experiment and see if it could work for me too. When I first told my boyfriend about my idea, he thought I was crazy and it would never work.

How is the experiment going?

It’s going great!

I started out the year with an auto-transfer from savings to checking of $4,000 on the last day of each month, but in late April (once I finished with 401(k) contributions for the year), I switched it up for my employer to direct deposit $2,000 each pay check to my checking account and the remainder to my savings account. I can split my direct deposit so many ways that I actually also set it up to put 1% of my gross income into my charitable donations savings account as well, which is awesome. The only thing I do manually now is I pay the balance of every credit card as of the last day of the month on the first of the next month, to start the month with a clean slate on the credit card balance, instead of paying attention to the due dates. I used to have my mortgage payment auto-pay on the last possible day it could, but I changed it to the third of the month so it came out earlier and then I knew how much was left in my checking account earlier. Any funds that are leftover in my checking account at the end of the month just stay there and roll over to the next month, which is how I deal with the irregular, but large-ish expenses like property taxes, insurance, and travel.

It’s kind of weird not knowing that I have set aside $X for property taxes so far, that I have $Y left in my clothing budget and $Z in my travel budget, but that’s surprisingly okay. If I spend more this year than I did on clothing last year, then I may consider a clothing budget to see if that helps with the spending. But for everything else, it has been fine. It’s nice getting invited to yet another wedding and not feeling like I need to add money to my presents budget because I don’t have a presents budget! It’s also nice getting the property tax bill and not being annoyed at needing to adjust my budget because it went up by more than what I had estimated. So far, I’ve stayed “under” budget, which is nice, but we also haven’t booked much travel yet this year.

The $48,000 figure was my total 2015 spending less grad school costs and charitable donations, rounded up to the next $1,000. I forgot to exclude medical expenses as I pay those out of my HSA, so really, I could have budgeted probably $47,000, but the buffer is nice to have. If I have funds left in my checking account at the end of the year (which I’m guessing I will), my plan is to just leave them there and then reduce the monthly deposits for 2017. So if I budget $48,000 again, but there is $4,000 left in my checking account, I’ll only transfer $3,666.67/month and not $4,000/month, which would leave a bit more room for savings next year.

So far, my spending seems reasonably in line with my 2015 spending, so I’m not particularly worried.

I have been tracking my spending reasonably close to when it happened, which isn’t strictly necessary, but it’s okay. The time saved not playing with the budget spreadsheet is huge.

This strange way of budgeting also means that it’s really hard to go over budget and irregular spending is accounted for since I never transfer money out of my checking account except to pay the mortgage/credit card bills.

Readers, how have your budgeting strategies evolved over time?

Budgeting: always stay a month ahead

I loved being paid monthly. I know some people hate it because then they run out of money by pay day. A simple bit of budgeting or planning (whichever word you prefer to use) can help with that really (so long as you do have enough money to go around).

Since an internship when I was 20 (quite a few moons ago now!), I’ve been paid monthly. And I have loved it! Without even realizing it, this forced me to always be a month ahead. I would get paid on the last business day of the month, set aside some money for the next month’s spending, and then send the rest to whatever my current savings goal was. Now with being on semimonthly pay, I plan to use part of the first paycheck to cover the next month’s spending and then the second one to savings, so that if I don’t get the second paycheck, the next month is already covered.

The other way that I stay a month ahead is on my credit card. You know how you can charge money on your plastic and then not actually pay for the items until sometimes almost two months later? That’s not how I budget. I follow a similar methodology to YNAB in that the day the money is spent is the day it comes out of my budget. My checking account balance has enough money at all times to pay off all of my credit card balances, even the ones that haven’t seen a statement yet. There’s no looking around for where to get the money when the statement comes. It’s already there.

Once you’re a month ahead, finances are much less worrisome. It doesn’t matter whether you’re paid biweekly, weekly, monthly, semimonthly, or completely sporadically. You add up all the income you received in the month, send some to savings and set some aside for the next month’s spending, rinse and repeat.

My parents always taught me to use one paycheck to pay for some things and the other one to pay for other things and to always pay your credit card before the due date, as in a few days before was just fine. I tried that way for a while and I found it really stressful to always be pulling money out of savings to pay for things you hadn’t planned on when the credit card bill came, so now I do things this way. I budget a bit (but I’m not very hard on myself at all if I miss the target) and have the money to pay the credit card statements in my checking account long before they come due. It’s freeing!

Edited to add: I’ve gotten a fair number of comments in recent months asking if I budget. I wrote several detailed posts on this back in April 2012. I’m still using the same spreadsheet, but the numbers are a bit different.

  1. April 2012 Spending Plan
  2. How I Made My Spending Plan
  3. April 2012 Spending Plan: Conclusion

Looking back at those posts made me realize that I don’t forecast for home maintenance or long-term car maintenance. I also don’t have a plan for what I’ll do to replace my car. My current assumption on the latter is that I’ll have the mortgage paid off then and will just sell some taxable investments. For home maintenance though? I’ve definitely had to do some replacing. Honestly, I just keep a larger cash buffer to help with that.

Readers, how do you pay your credit card bills? Are you more like me or my parents?

The Balanced Money Formula: Why it wouldn’t work for me

The Balanced Money Formula suggests that you spend 50% of your net income on needs, 30% on wants, and 20% on savings.

If I followed that, I would split my net income up like this:

  • $3,500 on needs
  • $2,100 on wants
  • $1,400 on savings

To me, that is a really low amount to savings – I normally save somewhere around $3,000 – $4,000 per month. My net income is actually budgeted to be split up something like this:

  • $2,200 on needs (31%)
  • $1,500 on wants (21%)
  • $3,300 on savings (47%)

So I have basically swapped savings for needs at the 50% marker, wants for savings at the 20% marker, and needs for wants at the 30% marker.

I think that at a net income of $7,000 or so per month (checking account direct deposit with 401(k) contributions added back), spending 50% on needs is a bit excessive and I would argue that at my income, 30% on needs 20% on wants, and 50% on savings is a much more balanced formula.

My needs and wants have definitely been going up continually, but I think I’ve found a pretty good balance of what I want to spend money on and spending money on what is important to me.

How did I split these groups up:

  1. Savings: my 401(k) contributions, cash and taxable investment contributions
  2. Needs: Rent, renter’s insurance, water, sewer, gas, trash, parking in my apartment building, car insurance, electricity, keeping my driver’s license and passport up-to-date, renewing the tabs on my car, maintaining my car, putting a tank of fuel in my car each month, internet at home, groceries.
  3. Wants: smartphone, sports, Pandora, Remember the Milk, and Dropbox subscriptions, income tax preparation (I could do it myself), personal domain registration and hosting, TiVo, clothes, social, dinners and lunches out, getting my eyebrows waxed, hair cuts, make-up, occasional trips to the spa (once or twice a year), a new cell phone and computer every few years, parking meters (I don’t have to drive where there are parking meters – I can bus or walk, mostly), parking at work if my employer doesn’t pay for it, travel, donations, and presents.

Readers, have you ever tried the balanced money formula? Why did it or did it not work for you?

Not All Details Matter: Spending

I still track my spending down to the penny. I’ve been doing this for over eight years now. But after verifying that my transactions posted correctly in online banking, I don’t care about the details in each category.

Creating a spending plan was really, really hard for me since I care way too much about the details. I’m doing pretty well with my spending plan now, but the first year that I was using one was hard. I didn’t use one through most of college, though I did in my last academic term and I did after I moved to start my full-time job.

I started out breaking down food down into different line items so that it was easier to budget for: alcohol, dinners out, on-campus food, groceries, and junk food (aka chocolate bars). I broke clothing down only for bras – everything else was grouped into the general category.

My post-college spending plan first started out with so many details. I can’t believe I was trying to track everything that I did. I learned that I simply can’t budget for some things.

I can’t budget for how many books I’m going to buy in a month or how many times I will eat out with friends. All of that just gets looped into “Entertainment”.

Also, having a separate category for chocolate bars was too detailed for me, so I just count those bought from the vending machine in “lunches out” and those bought in bulk under “groceries”.

I learned that grouping everything into “Clothing” just didn’t work because I really couldn’t tell what the number meant, so I split it out into the subcategories that I have today: bras, bottoms, athletic wear, dresses, coats, shoes, socks, underwear, tops, and swimwear.

Instead of getting mad at myself for roaming fees on my cell phone, I round the bill up to the nearest $5 and then I’m happy when I’m under “budget” every month.

I set budgets for travel to figure out how much I spent, but while I’m on vacation, I don’t think about the budget and just spend money. That seems to work okay since I have a natural aversion to spending too much money.

I’ve stopped trying to budget for “household cleaning supplies” and just leave that under groceries. It’s not very much anyway and I’m always under budget on groceries.

You might think that my spending plan has too much detail, but I think I’ve finally found the right balance in detail for me.

Readers, how do you determine which details matter to you when creating your spending plan?

Money Mindsets: Spending

My default money mindset, as you all know, is to save. I’ve always been good at saving and at controlling my spending, but I’ve always sucked at spending. I have always had the opposite unhealthy relationship with spending in comparison to most personal finance bloggers.

While I was in college, I was ridiculously cheap. As you know, I graduated from college with a net worth of $32,000. I did this partially by saving a lot of my income from internships and my parents paying for my expenses on academic terms. But I also did this by being ridiculously cheap:

I hardly ever drank alcohol.

I never really went out with my friends more than once a month and sometimes, once an academic term.

I would only go home if my parents would pay for it.

I didn’t let myself buy clothes (basically, I just stayed away from the malls) and hated paying the $7-10 to get my jeans altered to be the right length. Since bras were expensive, I bought as few as possible, though then I had to replace them more often.

I ate a TON of pasta with cheap tomato sauce, cheap soups, and other cheap food like pancake mix. (I was too cheap to buy eggs and the pancake mix was way easier.)

I didn’t really go on any trips, except when my parents paid.

I refused to pay for cabs when I could just wait in the cold for a bit for the bus or trudge through snow to get to the grocery store.

I thought that paying $30 for yoga classes for the academic term was expensive, so I didn’t do it. In my current city, that would probably only buy me two yoga classes.

I didn’t drink coffee. (I still don’t.)

I stopped getting my eyebrows waxed.

Some of the above might not sound that crazy. Maybe I picked the wrong examples. But I would chastise myself in my head if I spent money. I never cut myself or anything, but I would get really mad at myself. I made myself feel like I had no money, even though my only calendar year with a loss in my net worth was the year I started college, by about $8. Every other year saw an increase in my net worth. One year in college, my net worth even went up almost $15,000 thanks to a high-paying internship, more than doubling.

Now, a few years post-college, I have a much healthier relationship with spending.

I am so glad my parents forced me to spend my entire relocation bonus on brand-new furniture. I have a really awesome bedroom set, mattress, and really awesome sheets. Who knew that buying a $200 comforter and 500 thread count sheets would make you sleep better than buying only a $10 fitted sheet from Wal-Mart that starts to fall apart after a few months?

Some people say that budgets are terrible and constricting. Not for me. My spending plan is freeing. It allows me to spend $20 including a small tip to get my eyebrows waxed every month because $20 of my paycheck was allocated to that. It allows me to buy only designer jeans and to travel.

I am also glad that I bought a brand-new car. I didn’t buy a luxury car. I spent about $20,000 on my car. But I’m glad I bought it instead of sticking with a car sharing program. It makes me far happier.

Paying myself first, the saving method I used up until I started my first full-time job, was unhealthy for me. Now I pay myself first by allowing myself to spend whatever I want, within the confines of my spending plan. And then the rest goes to savings. Direct depositing money into my checking account instead of transferring it from savings makes it far easier for me to spend it.

Now, I let myself spend in a way that makes me happier. I try to save money on the things that don’t make me happier to spend on, like getting my hair cut more than 2-3 times a year. But honestly? I just go to someone at the salon where my eyebrow lady works. That’s easier. And I don’t really notice the extra $20-40 that that costs a few times a year.

Having a high income makes it easier to not guilt trip myself about spending money. I think that that is one of the many reasons in which I’m glad I took the job offer I had instead of applying to grad schools. I don’t know how my relationship with spending money would be now if I had scrimped for no good reason for another few years as a student.

Readers, how do you spend to make yourself happy? Did you ever have an unhealthy relationship with spending like I did?