One Thing I’d Say to a Twenty-Year-Old Me: Start Budgeting Now!

One Tip I Would Give My 20-Year-Old Self: Start Budgeting Now!

My parents never tried budgeting, and schools don’t teach personal money management either, so unfortunately, like most of us, I started my adult life with zero money management skills. I started earning money but regularly overdid it with shopping. I often wandered how money just disappeared from my bank account, literally just flew away through the window overnight.

The saddest thing is that I didn’t even enjoy buying things because I felt so guilty and ashamed of myself, yet I kept doing it over and over again.

I had zero money for emergencies or later even worse, I was putting away money for savings while going further and further into debt with my credit cards. Totally contradictory! But it seemed totally OK for me at the time. Everybody was doing it, so it must’ve been OK, right?

The truth is that you must live like nobody else now, so that you can live like no one else in the future.

I did want to be financially independent in the future, yet I had no clue how to break out of the way every one else was living. This is where budgeting came into the picture.

I always feared budgeting because it felt too restrictive and negative. As if there would be no more spending on pleasure, just boring survival. I guess that’s what most people think when they think of budgeting.

However, budgeting builds discipline, and that is a very important skill to have. The financial discipline that you build with budgeting will spill over to so many other areas of your life.

Plus, budgeting is like getting a pay rise. Seriously! I’ll show you why later in the blog post.

How I First Got Into Budgeting

I first tried budgeting a few years ago after reading Dave Ramsey’s “The Total Money Makeover”. I created two separate Excel sheets for my budget and expenses, but I only stuck to doing it faithfully for a few months because it was very limited. I didn’t include every single cost in it. So it was very demotivating when I had to pay those annual bills that didn’t even figure in the budget.

And then the interface simply wasn’t good enough for me. It wasn’t convenient to have my actual budget and expenses in two different places. Or perhaps I wasn’t truly ready for it yet.

Perhaps I didn’t have strong motivation to overhaul my financial life.

Perhaps I hadn’t reached rock bottom yet.

So I fell off the wagon and stopped budgeting for another couple of years.

Enter Every Dollar App: Success!

We got determined to pay off our credit cards and finally set ourselves free around 18 months ago, so I started reading another Dave Ramsey’s book. This time it was “The Financial Peace Planner” and it finally gave me that last push to take complete control of our finances.

The book is incredible, I highly recommend it to anyone who wants to achieve financial peace and feel completely in control of their future.

At the same time, I also learned about Dave Ramsey’s budgeting app called EveryDollar (and it’s free!). It was only available for American users, so I used my friend’s Floridan address to get access to it. Best decision ever! That app is everything I ever wanted from a budgeting tool. It has a budget and expenses all in one place. Plus, you can turn separate categories into funds, so you can easily plan ahead for things like annual taxes, subscriptions, etc. It makes it very easy to save up for things you want or for projects around the house.

I’ve been budgeting faithfully for around 18 months now and I feel completely in control of my financial future. Everything is achievable when your money works for you, and not vice versa.

I’ll write another in-depth post about my experience with the Every Dollar app and how exactly I budget, but for now let’s just talk about the reasons why budgeting is truly life changing and why I wish I’d started doing it 15 years ago.

The Reasons Why Budgeting Truly Changed My Life

  1. Budgeting makes me feel secure and peaceful about the future. The extent to which it reduces low grade stress in my daily life is incredible. If I have bigger annual or biannual expenses, such as taxes, council tax, car insurance, etc. I simply create funds for them and put money aside every month, so when the time comes to pay that big amount, it’s completely stress-free. I never thought we would be able to pay the annual taxes and go on holiday completely stress-free in the same month and that’s all thanks to careful budgeting.
  2. Budgeting made me realise that anything is achievable with patience and perseverance. From saving up a deposit for a bigger home to going for trips abroad, creating funds and growing them for the things we need and want provides a clear path for progress and it’s very easy to track it. It’s highly motivating!
  3. Budgeting is like getting a pay rise. No, seriously! I’m not joking here. That’s people’s main fear when it comes to budgeting but trust me, budgeting doesn’t leave you feeling restricted. It allows you to purchase things that you need and sometimes even things that you want as long as it’s planned in advance. Guilt free! Plus, knowing how much money exactly you’re earning and how much and where it’s going every day makes it feel like you’re earning so much more than you are. No more feeling that money is flying out the window every week.
  4. Budgeting teaches you how to distinguish between wants and needs. There’s a major difference there but today’s consumerist society has made us believe that those two are one and the same thing. Trust me, you don’t need another bag or your 10th pair of shoes. You only want them. But you do need food for your family and you do need a new fridge if yours is broken.
  5. Budgeting builds patience and discipline, which then spills over to other areas of life. It cultivates delayed gratification, which, if you ask me, is probably the most forgotten and the most helpful skill in today’s society. Saving up for a new laptop and then buying it feels so much sweeter than just buying it on credit right now (feeling mildly guilty in your subconsciousness) and having to pay it back in many months or years to come. Or perhaps you compromise by getting a second hand one. Or getting a cheaper model because that’s what you can really afford and you don’t become sheeple by buying the latest Apple product just because that’s what you need to have if you want to have any kind of worth in today’s society, right? 🙂 Living within your means or slightly lower feels so liberating.
  6. Budgeting minimises or completely removes the need for consumer credit because you’d be saving up for an emergency fund, annual expenses, taxes, things you need/want, etc. in advance. Murphy’s law is real, and when you’re truly prepared, Murphy won’t even be interested in you! 😉
  7.  Budgeting keeps you focused on your financial goals, so you won’t succumb to unnecessary spontaneous purchases and you will know the difference between wants and needs.  For example, for us our number one goal at the moment is paying off credit card debt from our previous life, so all of our spare cash goes to paying off the debt. Once it’s done, we will start saving up a 6-month emergency fund and a deposit for our next house. As we are both invested in the same goal and create the budget or make sacrifices together, it strengthens our relationship. With the budget, I feel like we’re both looking at the same direction more than ever in the past.

So here we are, budgeting has truly changed my life and I simply don’t see myself not tracking the expenses and making financial plans for the future. I hope that once we have kids, we’ll be able to pass this knowledge and money habits on to them because by starting early they can do incredible things with their lives.

What’s your take on spending money? Do you budget? Do you make financial plans? Do you feel like money flies out the window as soon as it reaches your wallet or do you know exactly where it goes at any moment? Let me know in the comments!

Simply yours,
Vita xx

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