I’ve covered many topics on this blog. So far, money hasn’t been one of them. It can be an awkward subject, so tightly connected to privilege, appearances and security. It’s becoming more common to discuss money within my social circles, potentially thanks to Refinery29’s Money Diaries series and similar articles.
Catch ups with friends often tiptoe around the subject until one of us asks a specific question. Although I would never ask someone to share their financial circumstances if it made them uncomfortable, each conversation has left the air a little clearer. Whether it’s annual salary or monthly housing costs, having points of comparison can help to position and prepare ourselves better.
Since August 2017, I’ve recorded every financial transaction I’ve made. Here are the lessons I’ve learned.
1. The habit has stuck
Now it would feel strange to make a purchase without considering my budget. I keep all receipts and type the amounts into a Google sheet within a few days. I add a comment that lists exactly what I spent that money on. I get a kick out of organisation (no surprises there), so having a system in place feels like a comfort rather than a chore.
2. Writing each purchase down provides perspective
£3 for a cup of herbal tea never seems worth the cost to me, but spending £3 on food during a long day in London often does. If you have a higher income and love coffee, your daily choices could look very different to mine. Recording every purchase can help you to notice whether your spending habits reflect your priorities.
3. Saving is more satisfying than spending
Transferring money (even £50) into savings feels worthwhile, especially if you set a goal. I know much much I want to save by the end of March and by the end of 2018.
4. It’s important to factor in fun
An entertainment allowance means I can enjoy a cinema trip, a new book or theatre ticket. I usually do one of those a month, not once a week, because I currently work part-time. I think carefully about the activities I spend money on, but I make sure to have something to look forward to.
5. Be flexible
It took me two months of recording my daily expenditure to figure out my “norms”, or realistic budget aims, for categories like food and travel. Even after this stage, it’s helpful to allow some flexibility. Remember to consider less frequent costs, including haircuts, and when annual outgoings, such as insurance payments, will be due. Even when you have a practical, tested budget in place, it doesn’t have to look exactly the same each month.
Have you tried a similar exercise? Please let me know your thoughts!