Going on a Quest

Write about your approach to budgeting.

I technically have a budget, but I use it as more of a guide than a policy set in stone. I use a spending tracker app to see categories like groceries, bills, transportation and other shopping, and I have numbers assigned to these for what I think are “reasonable” each month. The app I’ve chosen isn’t built to handle stuff like vacations or sinking funds for bigger purchases, so some months I’ll blow a category. This is a pretty ubiquitous feature for banking apps; my everyday bank has a dinky version of it that I don’t bother with. Some people put everything into a spreadsheet manually, but I’m not good enough at Excel to warrant that approach.

How do I set the spending amount per category? Well, some of it is vibes. Most categories, though, I’ve looked over several months of data and set it right around the average if I’m comfortable with it. This could be a come-to-Jesus moment if you’ve never done it before! You can set your restaurant budget to $100 all you want, but if you’re actually spending that much every week, you need to be honest with yourself about your priorities and adjust either the number or your behavior.

You are in charge of your budget and your spending. Nobody else is going to hold you to it (until you’re getting your wages garnished, or the repo man cometh). Money is a tool to buy time. Your Money or Your Life by Vicki Robin is (imo) the gold standard in laying this out clearly—to the extent that it even gives you a formula to calculate what your “true” wage is when you factor in what it costs you to do your job. Without money, you’re running a homestead and bartering with your neighbors for what you can’t do yourself. Sure, it’s a lower-impact way of life, but I know I don’t want to get up at the crack of dawn to milk cows and chop wood. So I have a job and a budget.

I think a lot of people who don’t keep track of their finances are afraid. It is hard and uncomfortable to see that your spending doesn’t align with your values. Here is the double-edged sword: you are in control, so the successes and failures all come from your actions. If you don’t gulp down the fear and decide how you actually want to live, you will stay on autopilot wondering where all your money went and why you can’t afford a vacation (or a car repair).

Personally, I have an inexpensive enough lifestyle and make enough money that it’s not a big deal if I go over in any given month. The budget is there as a framework so I can tell if I’m forming habits or patterns of spending more than my usual and review if I want to be doing it or if I should knock it off. I know my average recurring bills and subscriptions, which apparently isn’t all that common based on how many apps make a huge deal of being able to help with this. When I have “extra” money from a tax refund, not going out on the town due to bad weather, or whatever, I can look at the autopays that are coming up and know how much I can take out. That bonus money goes either to my car loan (should be done about 2 years early) or my Roth IRA up to the limit. Once the car is paid off, anything past the Roth limit will be going into investments because I want to retire early.

My current savings rate is about 30% between TSP deductions (a mix of pretax and Roth; this account type has a separate contribution limit from the IRA), emergency savings sitting in a HYSA, a Roth IRA, and plain old taxable brokerage. I’m on track to retire pretty comfortably around 57 before considering my pension, and I frankly need to learn a bit more about the fiddly boring fine-print rules about how it works if I want to leave before that. My current understanding is that after I meet the years required to receive the pension, I can quit whenever I want, but I can’t claim anything or withdraw from the TSP until the minimum retirement age of 57. That’s where the taxable brokerage would come in.

Early retirement is a goal for me because my job is physically taxing and I don’t want to get my knees replaced every decade just so I can keep clocking in for a paycheck until I’m in my sixties and my joints hurt too much to enjoy traveling, volunteering, trying low-paying work that I’m interested in, or whatever the hell else I can come up with.

I can’t believe how long I’ve gone on about this, except I can, because I think about all of this quite a lot. I find it frustrating that most of my peers don’t, and instead choose to avoid it and hold the belief that it’s impossible to control their spending, build up savings, and even think about retirement. Yes, it’s hard to find wages that work with the cost of living increasing so much, but you always, always have agency. You’re behind the wheel no matter what, so grab on and steer.

Homework: take a look at how your real spending compares to your budget. Is your money where your mouth is? What are you spending on that’s only holding you back or even working directly against your goals? Do you have a retirement plan, or do you believe it’s impossible because your peers all say so?