YMOYL, Chapter 3, Step 3: Where Is It All Going?

[catherine]

I think I finally titled this thread without a typo--yay! Sorry I'm a day late--I was in NY working all day.

The first part of this chapter is setting up "being conscious" about spending. They firmly draw the line between Step 3 and budgets, which no one likes and no one sticks to.

They explore the possibility that money is a socially-acceptable addiction, and they tell why:
...we reach for it compulsively even though it doesn't bring fulfillment
...we are convinced we can't live without it
...the thought of living without it overwhelms us with fear
...the need for it is intense, chronic, and seen as essential to our sense of wholeness
...etc.

They also draw analogies to dieting, which typically doesn't work--healthy eating patterns only change when the following two things are addressed:
1) You identify internal signals, not external admonishments or habitual desires
2) You change your patterns over the long term, not what you eat in the short term

So, changes in spending can occur in much the same way--just by paying attention and by "saying 'yes' to being conscious"

How do you pay attention? Did you ever budget? Did it work? Do you have things in place that force you to be conscious of your spending? Can you give an example of when you made a "conscious" spend vs an unconscious one? What does conscious spending mean to you?

[Teacher Terry]

As I have gotten older I want to spend my $ on experiences instead of things. If I am tempted to buy a decoration for the house I ask myself if I will be hauling this to Goodwill in a year or 2. I have always budgeted and planned. The other thing I noticed is that when you have a lot of clutter besides costing you $ it also takes much longer to clean so it is wasting your time. Looking at something pretty may make you feel good for awhile but that wears off and now you have made your home more chaotic and less peaceful. Time is $ and both are limited so how do you want to spend yours? Budgeting has always ensured that I am spending within my values. We set aside $ for fun/experiences and for vacations as well as necessities. I think most people need to plan or spending can get out of hand.

[ApatheticNoMore]

most experiences are free (maybe the cost of some gas to get there). the beach - free, the mountains - free, most museums I actually go to free (sometimes you end up paying for parking). The "spending for experiences" really does seem to me like the marketing people want us to allocate a whole new spending category that we wouldn't otherwise spend for, it's a pet peeve.

[Teacher Terry]

plays, movies, festivals, dining out, wine tasting- all are experiences and not free.

[freshstart]

ITA, Teacher Terry and consider them a category.

I don't have a budget, instead I charge everything for rewards (paid in full monthly) and I watch the categories they use every other day online. If one category was a spend, say clothes, I stop spending in that category and adjust in others if I'm going to need money to cover the clothes. This works for me so I am sort of hesitant to write down every penny and then set up the categories (which looks an awful lot like a budget to me). What do you think? Am I deluding myself that I can control my finances this way? It's worked for the past 14 yrs. I do think writing down every penny would stop me from eating out as often. And I feel guilt about that money. They say "no shame, no blame" but I have a lot of guilt tied up in money. Anyone else struggle with this?

[Tammy]

My budget was strict in the 90s. Now it's not very detailed. I know what we spend in fixed costs monthly. I have never enjoyed shopping of any kind so I buy the minimum in all categories. That's probably why I don't need much of a budget. I have to force myself to the grocery store when the cupboards are empty. 😄

[iris lilies]

ITA, Teacher Terry and consider them a category.

I don't have a budget, instead I charge everything for rewards (paid in full monthly) and I watch the categories they use every other day online. If one category was a spend, say clothes, I stop spending in that category and adjust in others if I'm going to need money to cover the clothes. This works for me so I am sort of hesitant to write down every penny and then set up the categories (which looks an awful lot like a budget to me). What do you think? Am I deluding myself that I can control my finances this way? It's worked for the past 14 yrs. I do think writing down every penny would stop me from eating out as often. And I feel guilt about that money. They say "no shame, no blame" but I have a lot of guilt tied up in money. Anyone else struggle with this?

I never did fhe exercise of writng down what I spend. But I think that has enormous value.

When I was growing up I had an older friend who noted all expenses. They went into a little notebook and she later (I think) transferred it to a summary sheet. This was long before the days of computers and I doubt that she had tead YMOYL. This made a big impression on me and she urged me to adopt this habit. But I didnt, I just practiced not spending unless I absolutely had to or it was something I really wanted.

The beauty of tracking is at you see where you money goes. period. Its nt about denial of buying things you want.

Tracking spending is different from budgeting. I think budgeting, in the theoretical, may not be useful because it gives us categories in which we are "allowed" to spend. So, Ive got a budget of $200 for clothes and shoes this quarter. What if I dont need any now?Why spend that much? Same for groceries.

Budgeting is a way of evening out spending over equal periods of time. We dont do it, I dont think in terms of monthly finances because I think that is too limiting ( although I understand that for some people it is a useful tool.) We dont participate in utility "budget billing" for instance because we always have enough money sitting around to just pay the bill.

[ToomuchStuff]

I did the tracking for years, and it certainly makes you conscious of your spending habits. (it won't prevent impulse buys or fun stuff, but it makes you value it)
When I started, it was after the lawsuit I was involved in was over and I had been so close to being homeless. Every cent mattered more then ever. I picked up a Suzy Orman book somewhere for $1, after seeing her on something and she mentioned things like saving change and putting it towards your debt, or savings. After that, a friends business was short handed and I started helping for a bit. He got more help but I stayed on and worked two jobs, seven days a week for 3 years, with 9 days off. Expenses do go up when your working that much, as you can't do everything you need to do, but overall it helped. That was good prep for later, when my hours and responsibility went up, due to employers medical issues.
The tracking helped, and I haven't done it for a couple years. I tend to stick to what I learned then, and have only had to adjust some categories on occasion (something breaks, etc. temp adjustment, rather then dip into emergency funds)

I think I should track again and see where I am now. I wonder if it would be better to always track, or if there should be some give and take, to hep prevent burnout.

[Kestra]

Being conscious about spending and other life choices is probably my favourite thing about YMOYL.

I've never budgeted, but have tracked for many years, as previously mentioned. The categories change a bit depending on my situations but I still have quite a few of them. I like that level of detail. If I was retired I may reduce categories to necessary/optional, just to track that I was still spending within my means.

Even with partners we still don't budget. I tend to encourage conscious spending with my two life partners (not two at the same time ;) ) and they have made enough income that we never had to have a strict budget. They fall into the conscious spending fairly well or we wouldn't be together.

Definitely the biggest variable/optional expense is groceries. September was extremely expensive for groceries (though we didn't actually have to pay for them - yay for fancy employer benefits). But the fridge and kitchen have a lot now so October should be better. We discussed this and we are comfortable with spending a lot on food as it's important to us and we have particular tastes that aren't cheap - lots of fresh fruit/vegetables. And we virtually Never throw anything out, so nothing is going to waste. And we aren't strapped for money. We are spending consciously on groceries most of the time.

For me, unconscious spending is mostly when I get something out of habit, "convenience" (often a false sense of it), or because "I deserve it"/"want a reward" but don't actually have a strong craving for the thing that I'm purchasing. If get a fancy coffee or chocolate or other treat, I try to make sure I REALLY feel like eating that, but sometimes I screw up.

Also I screw up when I don't think about a purchase enough - can I get it cheaper or secondhand, or just do without? I tend to be impulsive, so have made some stupid purchases.

Also not spending inline with my values or lifestyle tastes. This was a bigger problem with ex-husband. With new partner, I'm much more aware of this being an issue for me, so I'm more careful to not spend money just because he wants something that might be considered a joint purchase.

I'm just mostly in a habit now of trying to slow down my spending and really think if the cost is worth the money. I need to want it at an equivalent amount to the money I am spending on it.

[freshstart]

I've never budgeted, but have tracked for many years, as previously mentioned. The categories change a bit depending on my situations but I still have quite a few of them. I like that level of detail. If I was retired I may reduce categories to necessary/optional, just to track that I was still spending within my means.



Kestra, do you do the charts like in the book with columns and reconcile them every month? Do you use a spreadsheet or just paper and pen?

[Kestra]

I can't remember the exact book layout but yes, very similar in Excel. Though it's a bit different using YNAB now. Category results are the same idea.
I hate when I have to put in a small unknown amount to reconcile but that is rare and usually under $5.

[Teacher Terry]

FS: if the method you have been using for 14 years works well for you so I don;t see any reason to change it. I don't track every penny, etc. I do set aside a certain amount of $ each month for certain categories like fun, eating out, vacations, etc. This helps us from being mindless consumers. for instance we both love to eat out so if we didn't set a limit we would probably spend too much $ on this and it would also be bad for our health/weight.

[catherine]

FS: if the method you have been using for 14 years works well for you so I don;t see any reason to change it. I don't track every penny, etc. I do set aside a certain amount of $ each month for certain categories like fun, eating out, vacations, etc. This helps us from being mindless consumers. for instance we both love to eat out so if we didn't set a limit we would probably spend too much $ on this and it would also be bad for our health/weight.

I agree that everyone needs the system that works best for them. My major criticism of YMOYL at this point is simply that the methods are a bit outdated. The charts are fine, but most of us are more comfortable using digital tools for tracking and budgeting, if we are prone to doing those things.

I do have an old-fashioned grid-paper wall chart with my debt-reduction progress, however. Nothing like seeing the downward trend in black and white.

[Teacher Terry]

Agree that things are dated because the book was written so long ago.

[Kestra]

Yes, I have a hard time fathoming tracking with paper. Or really doing much of anything without a computer. I'm almost forty and have tracked money exclusively with computers, and done any writing primarily on computers for almost as long as these were things that I did. People younger than me must find it even weirder.

ATMs and debit cards became a thing around when I got my first job.

I know it works for some people but I'm also perplexed by why cash seems "more real" to people; that spending cash helps them spend less.

I haven't been paid in cash since I was around 16. Electronic money is the only real money I know. Once cash is withdrawn it is too easy to spend. To me, money is numbers on a screen; not coloured paper or coins.

[freshstart]

I don't spend more when I use credit cards. I use cash only for one doctor who doesn't take credit cards. I do, however, use paper checks I receive that have to be cashed at the bank as savings towards my emergency fund. I've found I save every penny from those checks and I enjoy counting the hundred dollars bills as they add up. I know that's odd but it really adds up over time.

[greenclaire]

I was quite tired when I initially read this chapter and so it took me a couple of reads to get it into my head. At first it seemed like a lot of excessive tracking, but I think I now get it. I have set it up on excel, as I'm another who is far happier on a computer than on paper. I am hoping it will help me notice things more, it's already apparent I spend far to much on work lunches so I'm making a bigger effort to be organised enough to take my own as I hadn't quite realised how much all the money was adding up.

[catherine]

I am hoping it will help me notice things more, it's already apparent I spend far to much on work lunches so I'm making a bigger effort to be organised enough to take my own as I hadn't quite realised how much all the money was adding up.

Yeah, I think that's the point. Sometimes I can be penny-wise and pound-foolish, but still, I tend to think about the "latte factor" in spending--in other words, those little splurges really do add up--and for what? I have a BIL who is broke, but he still gets in his car and drives to the convenience store every morning to buy his coffee. Some might say, big deal, it's only a dollar--Starbucks is the REAL splurge, but I think spending $30 a month for coffee is kind of silly when you can make it yourself for pennies. To each his own, though.

For me, my surprises lately are the automatic withdrawals for subscriptions to internet things--for instance, my subscription to a motivational guy, and another subscription to Consumer Reports, and another to a menu-planning thing and another to Ancestry.com. Because they're automatic, and it comes right out of my bank account, I don't really notice, but you add it up, and it's probably about $600/year. Is it worth it? The tracking/budgeting helps me think about that.

[Cypress]

They explore the possibility that money is a socially-acceptable addiction, and they tell why:
...we reach for it compulsively even though it doesn't bring fulfillment
...we are convinced we can't live without it
...the thought of living without it overwhelms us with fear
...the need for it is intense, chronic, and seen as essential to our sense of wholeness
...etc.

When I first came on board with YMOYL, I did track expenses for a few years to see where the $$ was going. The largest expense was to food. I live in the NorthEast and wonder if food is more expensive up here. Certainly, energy costs and general cost of living is higher. Rents are very high all around Massachusetts. I am always shocked what folks pay now for housing. My mortgage is reasonable and affordable.

I stopped this level of scrutiny but do write out a monthly budget from time to time. There's a different method of budgeting that I prefer. Take your known income for the month, list fixed expenses and calculate the balance. From the balance, apply variable expenses and calculate a budget. Depending on expenses, there may be a positive balance of $$ not assigned to an expense. This is free cash. If you calculate savings into fixed expense category, that's great. If not,, the free cash can go toward savings accounts. I keep three club accounts at my credit union for oil, house and travel. After owning my home for six years, I basically know how much to save annually for oil fill ups. The house fund, I aim for $1500 balance. Travel is an extra in life but is funded routinely. Once I have about the amount I need for a trip, I start planning out and finding the best travel way on a budget. I plan on returning to Italy next year and am independent enough to travel without a tour guide. I use Airbnb for housing. Food costs in Italy were remarkably low so I know I can budget 25 Euros a day and eat really well.

I have enough $$ to get buy but need to live within my means. There have been times I had to be very clever about stretching food supplies until the next paycheck. I have learned to make great soup from scratch and enjoy pancakes for dinner. I've never gone without a meal but it can get tight. I think it's an old fear of being food deprived. It's possible human beings have deep set fears that create some behaviors. I am watching a series on Great Courses called The Other Side of History. A Colgate University PhD is exploring ancient cultures and talking about the regular folks and how they got by in ancient Egypt, Greece, etc....I had no idea about life in a Greek household, community, etc....he mentions often about the movement of people due to war, environmental conditions, or forced movement by leadership. He mentioned also that people may have an old old fear of catastrophes in floods, earthquakes and volcanic eruptions. These events changed the course of life for some people so strongly that they never quite recovered from a fear of being overwhelmed by nature, including famines.

I started watching Great Courses programs the last few years because many are very well done, but I cancelled cable TV and still enjoy watching something on the tube. I loan the DVD's through my public library. This is one way to keep on budget as to buy these programs are expensive.

I would say money has been a pain to me most of my life. I am not the brightest or most accomplished person. I work hard but make a modest living. I keep expenses down so as not to live beyond my means. Being part of YMOYL community has helped me understand a lot of people just about get by. But, you can make adjustments and still enjoy life.