We’re excited to share another weekly installment of OFB Interviews! We hope you’ve been enjoying these as much as we have. It’s been awesome hearing other perspectives, struggles, successes and voices that are less weird and more eloquent than our own. And today is no different with our special guest, Andrea! Here we go…
Tell us your story.
I suppose my story would begin when I was in college. While in school, every leftover dollar I earned went to pizza, movies, road trips, clothes, and other unnecessary things that bring a short stint of satisfaction.
When I graduated, I kept up this spending style. I met my husband and suddenly, life was not a solitary story of cute outfits and girl’s-nights-out. We both felt a commitment to sort out our finances…but how? A tiny voice in the back of my mind mumbled something about emergency funds, retirement planning, life insurance, and other bits of information I had picked up here and there as being a part of the burden of getting older. But everything I read on saving and investing was a jumble of acronyms and seemingly random numbers: 529, 401K, ROTH IRA… I had no idea what they were and anything I read to try to clarify only confused me more.
Fast forward to about August 2014. I came upon OFB and the heavens parted, trumpets sounded — okay, maybe a bit of hyperbole, but all the same. Finances became something that was easy to understand. OFB helped me crack the code of those formerly “random” terms and I realized that investing is not something reserved for those with business degrees.
What was it that finally made the whole budgeting thing click? What do you think was holding you back?
The first part to how the whole budget thing clicked was being able to understand it in plain friggin’ English! Once I picked up some of the terms, I liked talking about finances. I like the feeling of throwing around phrases like “high-yield savings accounts” because it sounds like something a responsible adult would say.
One day, I was feeling particularly disciplined and I created a quick, informal Excel document that was intended to get me thinking about creating a budget. It included our income, expenses, and financial goals. Turns out, I had just created my first budget but hadn’t actually realized it since it wasn’t in the exact format as other budgets I had seen. I began to expand on it into the beautiful, wonderful, exalted budget that it is today. It might not look like anyone else’s, but it’s mine and it works for me. This is the second part to how it all clicked: recognizing there is no one right way, but rather to do what works for me.
Seeing it written down made it all very real. For a couple of weeks, I kept track of what we spent money on. At times, it was hard (“We spent how much on going out to eat?!”), but it was nice to not have that “where did all our money go?” moment at the end of the month. The next step was to prioritize how we wanted to put our money to use. Instead of saving whatever extra money we had at the end of the week (Ha! “extra money”), we prioritized saving a large amount of our income first before spending it on random stuff. This seems obvious, but old habits die very hard. So I would say the third part to all of this was prioritizing what we really wanted to have: peace of mind over a new pair of shoes.
What budget categories were the easiest to cut back on?
I. Love. Food. I love food even more when someone else does the cooking and cleaning and all I have to do is show up, eat, and pay a bill. But unfortunately, one thing our budget proved was that going out to eat was taking a heavy toll on our ability to save money. We cut down on eating out to virtually nothing and as a direct result, our savings grew and grew.
What budgeting tools (apps, spreadsheets, strategies, etc.) are you using?
Budgeting became easier for me when I realized it didn’t necessarily have to involve the fancy tools that are out there, so my answer to this question is very boring: a homemade Excel spreadsheet. It breaks things down weekly (we get paid bi-weekly and also, thinking short-term helps me more than thinking in terms of months. I like to know what the payoff will be in 7 days!).
I put in our income for that week, what expenses we should pay that week, and what we will put into savings. Then I get a remainder amount, which is factored into the following week’s budget. I like to know where each penny is going, and if the remainder at the end of the week is different from what had been calculated, I need to know why. None of this not-knowing-where-my-money-is-going mumbo jumbo that characterized my former financial self.
I tried using budget templates and Mint.com, but we just didn’t get along :/
Congrats on expecting your first baby! Got a name figured out yet? Care to share with the strangers of the OFB Interwebs?
Thank you! Congrats to you on your newest addition. We have settled on Alexandra. Would you believe I got it from your comments section when you asked for suggestions for names? Hand to God.
Any final words?
Your recent Worry So You Don’t Have to Worry post is a great summary of why budgeting and finances is important to me. We recently ran into a financial snag and our emergency fund that we loved, cared for and groomed for so many months has helped us remain somewhat calm (with T-minus one month until baby’s arrival). When we grew our emergency fund, we were coming to the aid of our future selves, and here we are now!
You the bomb dot org, Andrea! We totally resonated with Andrea’s story and her three tips for cracking the budgeting code are solid: 1) take the time to understand what in the world some of these awful financial terms mean, 2) find (or make) a budgeting system that works for you, and 3) prioritize and decide what savings goals are more important than some of your spending. Also, kudos to all of you who helped guide Andrea to her baby’s name. This Internet thing, man. Some cool stuff right there
More stories and interviews coming soon, but in the meantime, shout (or speak in a reasonable volume) any questions or thoughts for Andrea in the comments below!
Totally agreed that you have to find a way to budget that works for you. I use Excel spreadsheets and Mint. I bet my spreadsheets would seem confusing and tedious to someone else, but they work so well for me.
I use a simple (weekly) excel spread sheet for my budget too!
Congrats on expecting a baby Andrea. The excel spreadsheet is a great idea
Thank you, Christa! We’re very excited to meet our baby!
Hi! My biggest struggle is going out to eat. Do you have any tips on how you cut down?
Laura, what worked best for me was identify what my favorite meals are when I eat out and then learn to cook them at home. I am a pasta fanatic so it works well for my grocery budget (can’t say the same for my waistline).
Ain’t no shame in the Excel spreadsheet game! It’s the only thing that really works for me, too. And congrats on the coming baby!!!
Ain’t no shame at all! And thank you!
This is an awesome interview! I feel like I completely relate to you, Andrea. I created my own budget in Excel, too. It was the best way for us, as well. Congratulations on your pregnancy!