my two cents

I Can’t Stop Overspending! How Can I Budget Myself?

Photo: H. Armstrong Roberts/ClassicStoc/Getty Images

Masha, 31, works for a start-up in San Francisco and can’t get herself to save money. She makes $110,000, but between her rent, her car, weekend trips, workout classes, clothes, dinners out, and goodness knows what else, she barely lives within her means. She even overspends occasionally, and has to rely on her credit card; she sometimes carries over the balance for a few months.

Overall, she’s a very dependable, responsible person, and feels so guilty that she can’t get this part of her life under control. She knows she should have an emergency fund, and she’d like to start investing a bit, too … but then there’s always another wedding to fly to, another dinner out that costs more than she planned, another rent hike. She worries that her lack of savings will affect her career choices, too; she’d like to start looking for a new job in the coming year, but she might have to choose a more stable, less interesting company over a more innovative, volatile one, purely because she doesn’t have any financial cushion.

Masha works hard and wants to enjoy the money she makes. How can she budget herself without feeling deprived?

Who among us has not experienced the stomach-dropping shame of “insufficient funds” at the ATM? It’s as if you jolted to a halt in the highway’s middle lane, out of gas. You are insufficient, the screen says. Instead of money, all you deserve is a flimsy receipt that says $7.06, printed on a slip of paper so stubby that you must claw it out of the machine like the subhuman that you are. Forget the dignity of your hard work and respectable job and tidy apartment and decent haircut — they’re not worth enough if you don’t have anything left over afterward.

As Charles Dickens put it, “Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.”

The cornerstone of money issues: You must spend less than you have. It’s a boring, simple concept, but the execution — and the mind-set behind it — is a complex negotiation between your ego and your bank account.

I’m not one of those people who thinks that saving money can be fun or easy. Of course it’s not! I love buying things, and people like us have to gussy up the act of restraint to look less like self-denial and more like what it actually is: self-respect. A healthy understanding that you aren’t defined by what you buy, combined with the wherewithal to say no, requires a powerful and elusive level of confidence. And in today’s Goop-y world of cultivating your microbiome of self-worth through probiotic serums and shiny new lipsticks and Instagrammable vacations, it’s particularly hard to grasp — and more tempting than ever to throw yourself down the rabbit hole of “I deserve this, don’t I? Expedited shipping!”

Masha, if you don’t deal with your money, then it will deal with you — and cruelly so. It’s already jeopardizing your growth — you’re nervous about next career steps because you’re shackled to a set of expenses that limit your flexibility. But do you really enjoy half of the things that you’re so hell-bent on affording? You might not even like yourself that much — at least, not enough to save money for your future. It’s easier to try to add merit to your day by piling stuff onto it, rather than taking a hard look at its face value, but that’s where you must start.

“The tool I use for saving money is something I call joy-based spending,” said Manisha Thakor, the director of wealth strategies for women at the BAM Alliance and founder of MoneyZen. “Budgeting stinks. It feels like we’re in a straitjacket and we’re being deprived. And what we all want is to enjoy the day, but also know that we have security for tomorrow.” She recommends a two-pronged approach, starting with mentality: “Stop and think, first and foremost, ‘Where did this money come from?’ For most of us, it’s because we work. And when we spend our money, what we’re really spending is our life’s energy, those hours we’ve put into our jobs. So you want to squeeze the most amount of joy out of your spending as you possibly can.”

Fair enough. But my joy is wine and plane tickets. What about that?

“My suggestion is, for a week or longer, literally write down everything you spend money on,” Manisha told me over the phone. “It doesn’t have to be fancy — just jot it down somewhere. But do it for everything. Whether you auto-paid a bill or wrote a check or paid cash, record it along with the dollar amount. Then, at the end of the period, rather than add it all up and judge yourself, all you do is print it off and take a highlighter and mark anything you spent money on that did not bring you joy.” It’s not meant to be an exercise in shoulds or shouldn’ts; rather, it’s a lesson in what you actually value.

“Some of it is obvious — the utilities bill didn’t bring you joy!” Manisha continued. “But I have yet to meet a person who didn’t find something on their list that didn’t make them think twice. Like, ‘Wow, I spent $30 on drinks out with that person who I don’t even really like.’ Or, ‘I bought this outfit and it doesn’t fit.’ Or, ‘I spent money on this food and it made me feel gross.’”

(My own non-joy items from the past week include: a large and mediocre Thai meal from Seamless that was an hour late and included items I hadn’t ordered but ate anyway, and a Kindle book I bought on a whim and will definitely never read, among others.)

According to Manisha, the next steps will unfold more naturally. “Once you see that you’re you’re spending your hard-earned life’s energy in areas that don’t maximize joy — literally, leaking opportunities for it — you will start changing your mind-set. People find the right answers for themselves. It’s not as simple as, ‘Stop with the lattes.’ It is, ‘How much joy am I really getting out of this?’ I drink two lattes every day, but that’s $5 on two hours of extreme enjoyment. There are no blanket rules.”

My money-savvy friends abide by a similar outlook. “I don’t work off of a budget,” says Maya, who’s so good at saving that she’s helping her husband get out of debt. “I just focus on understanding the difference between what I think will make me happy and what actually makes me happy. If I buy a necklace and then never wear it, I’ll remember that next time I’m browsing. I put a lot of thought and intention into the purchases I make.”

Christine Benz, the director of personal finance at Morningstar, is on the same page. “I wish I had a zippy answer, but you just have to find your ‘thing’ — and make sure you don’t have ten of them,” she told me. “We all have to live in the here and now, and there’s stuff that makes your life more fun. It’s not about spending as little money as possible. If you try to embark on a super-strict, joyless existence, then you won’t stick to it.” Or, even if you do, what’s that worth? “You sometimes read about these super-savers who retire at age 52 or whatever,” she added. “And I’m like, ‘But you didn’t go anywhere in your 30s and 40s, and that’s its own kind of cost, right?’”

In the meantime, Masha, go through the stuff you already have and pat yourself on the back for earning it. Do an inventory of your closet and admire the things that you like. Make a list of all the places you’ve been this year, the people you’ve spent time with, and projects you’ve completed. People (and women especially) often focus on what they haven’t done rather than celebrating what they’ve achieved. It’ll help quell that so-much-to-do panic, and the resulting tendency to berate yourself for what’s missing (and buy things that won’t help).

On a more logistical note, you should immediately set up an auto-transfer that siphons part of your paycheck into a savings account that you don’t see and won’t be tempted to tap into. I highly doubt you’ll notice the missing $100 or so every pay period. (And you really need to start saving, by the way — but you know that already.)

The whole point of having money is to gain better options — a wider array of choices in where to live, what to eat, how to work, and when to travel. But if you mishandle your money, those options turn into obligations. Masha, you are currently option-poor, not money-poor. On the bright side, changing that costs nothing.

I Can’t Stop Overspending! How Can I Budget Myself?