February was a big spending month for me, actually the biggest yet excluding months when I took a vacation. In February I spent $902.17 on items or experiences that can only be classified as wants and not needs. If you think spending $902 on restaurants and going out with friends is out of control I would say that I completely agree. This is quite the change from my usual budget of $250 a month. Everyone stumbles financially at some point and it appears that for the first time since I’ve been keeping a budget, it happened to me. Lets take a look at what went wrong.
Budget Buster Fun Expenses Last Month
- Valentines day dinner, flowers, card, tip, etc: $215.68
- Three days of fun with my medical school best friend who came to visit: $350.91
- Friends birthday dinner $92.18
- Meeting up with coworkers for dinner, drinks, or both: $155.72 (total)
Convincing Myself That Certain Spending Doesn’t Count
With each point above, I convinced myself that spending was necessary. I twisted things to make myself believe that I NEEDED to spend the cash for one reason or another. Each excuse was pretty much the same, me telling myself that this was a special event and that this should not be part of my budget. I willingly neglected the budget. A big factor was me convincing myself how for the past 8 years I missed out on all of these experiences. At one point I event averaged out the time spent with a friend and told myself that $350.91 for us not seeing each other in 4 years is not that much per year of time apart. Yes, I dug that deep for an excuse and am ashamed to admit it.
This year is our first year as a couple where we went out and celebrated valentines day. In years past, we would celebrate by cooking dinner at home with a few glasses of wine. She loves it when I cook for her and it has been her request for the past 4 years on this special occasion. This year I decided to change things up by taking her to one of the more upscale restaurants.
The restaurant was crowded, loud, and had a menu where we only had two choices for what kind of food we would eat due to high demand. I guess trendy and expensive means less choices on special occasions. Minimum tab was $65 per plate plus a bottle of wine, at an extra costs of course. Since we both tend to be very frugal, when we sat down and she noticed the prices it sort of killed the mood since that was the most we had ever spent on a meal by a long shot. The situation seemed to get only worse when our entree was gone in less than a half a dozen bites.
All was not lost and we made the best of the situation. We went home to cook whatever was left in our fridge. My fiancée opened a bottle of rolling rock which she was proud to tell me how she bought a six-pack for $5. She then reminded me that it’s not the cost that counts but the experience. She was less than thrilled that we basically had to talk very loudly in order to even hear each other at this restaurant. We ended up having more fun at home cooking than we did at the expensive restaurant where we could hardly hear one another. Next year I’ll be sure to focus on quality rather than some online review of the most trendy restaurant in Austin.
Spending Money to Try and Make New Friends
Even though I’ve been with my group for 6 months, I’m still the new guy. In February I was invited out for drinks and dinner at least 3 times a week by different members in the group. The fiancée and I kept telling ourselves we need to make some friends and as a result we would always say yes. This is my first job and I felt the pressure to say yes to act like I belong to part of the group. I convinced myself that spending money by going out weekly was something that needed to be done to fit in with the business and group.
Looking back, I somehow chose to disregarded the fact that the people asking me to go out were in the minority. A large portion of my group stays home and goes out very little. The final week of February, 5 people with my group have decided to book not one but two ski trips before the season is over. I was invited and politely turned it down. There are cheaper ways to network and let’s be honest, this type of expense can not be easily justified. For now, I’ll just keep it friendly in the group conversation that doesn’t costs me anything extra.
- Spending money to make friends who love to spend money is not worth it
Above is the $92.18 dinner for my friends birthday dinner
How We Have Gotten Spending Back on Track
I’m a visual person, always have been. I love seeing charts to help make a point. There are numerous programs online that can help with budgeting, but we decided to take our own approach. We had a system in residency which we are bring back starting this month. When we make a purchase from our joint expenses fund only meant for fun purchases, we put the receipt on the refrigerator so that we both can be held accountable. This will also serve as a good visual reminder if the refrigerator is full of receipts, that we are most likely spending too much money on wants and not needs.
Getting Back up After a Budget Mistake
There will be financial mistakes along my way to financial freedom, and that’s okay. I’m glad that I caught my mistake early, in the first month before it ballooned into a habit. The key is to take a rational approach to find the root of the problem, then make a rational solution. Making a fun budget of zero is not a rational or practical decision. In the same sense, increasing my fun budget to $1,000 a month so we don’t feel bad about our spending. There is no need for punishment, just a plan on how to get back on track.
How I Decide How Much Money is In the Entertainment Budget
The going out or entertainment portion of my budget is the last bit that I allocate. I first make a list of gross income then subtract taxes and retirement. Once I have net income I then take away recurring expenses that are a must for daily living. Rent, electricity, water, grocery and insurance are some of the categories that come first. Then I subtract loan repayments and my desired savings rate. The money that is left over is the money that I allow for my entertainment or fun purchases. Figuring out how much money to spend entertainment or fun purchases should always be the last portion of ones budget.
Creating a competition
Using the refrigerator as a way to post discretionary expenses is a way to create a competition. We both now are looking for ways to maximize our experience together while minimizing money spent. We recently went to a bar which had happy hour and two dollar beers. They also had free bingo with a $300 grand prize! We won a few free drinks and ended up getting 5 hours of entertainment for a little over $20. Not bad at all if you ask me! This kind of spending sure has come a long way since I wrote about Monk Mode spending. I think this month I’ll be back on track!
When you bust the budget how do you get back on track? Do you have a method to keep track of expenses while trying to keep it fun.