my two cents

‘My Budget Is Making Me Miserable’

Photo: Three Lions/Getty Images

I’m 31, live in New York, and make $55K a year at my demanding full-time job. I have $5,500 in credit-card debt that I took on last year while trying to make ends meet at a lower-paying job with some medical debt mixed in. I also have about $8,000 left to pay on my federal student loans. I live with two roommates in an apartment that is as affordable as I can find without it being a total dump. 

About two months ago, I realized I was on a treadmill with my credit-card debt. I would make large payments but then I couldn’t pay my bills and would wind up putting expenses back on my credit card. I finally cut up my credit card so I couldn’t use it anymore, which helped me get real about how much money I truly have. I also split my remaining credit-card balance between three cards, two of which are zero percent interest for now. 

The problem is that I wake up every morning thinking about my bank balance. I am keenly aware that I have no safety net, and I beat myself up about it every minute of every day. I’ve cut down on going out (not easy in New York) and tried to streamline my grocery bills. The only thing I splurge on is food because it’s related to my career and I know I need to eat healthy, balanced meals to feel good — but I’m obsessing about every yogurt cup. 

How do you deal with money obsession? Living in the city, scrolling on Instagram, feeling depressed because I’m not going on dates because I can’t afford drinks — it’s all making me crazy. I think I’m making this process harder on myself than it needs to be, but I don’t know how to make it better. How can I deal with the emotional side of not having enough and feeling like a failure because of it?

If you’re a failure, then so is pretty much everyone I know — including me. Until a few years ago, my approach to finances could be summed up as “trying to not spend money and failing badly.” I spent much of my 20s making a similar salary to yours, sharing tiny apartments with roommates, and generally living outside my means. I remember that whoosh of relief when my paycheck hit my bank account, followed by renewed vows not to spend it all again … and repeat. When I wasn’t in total denial, I felt sick with guilt that I lacked the willpower to be more frugal and was jealous of my friends and colleagues who seemed to lead tidier, more budgeted lives.

It took time and practice to stop feeling like such a hapless idiot with my finances, and I still have moments of regression. But the two main factors that turned things around were: (1) I started giving myself a weekly allowance, and (2) I started making more money. Back to those in a minute.

First, I want to point out that, from a financial standpoint, you’re doing everything right. You’re paying down your student loans, digging yourself out of the quicksand that is credit-card debt as efficiently as you can, and trying to plan for your future. You have a decent job and a place to live. I know it’s terrifying to have no cushion, and it sucks to live in New York and be surrounded by glamorous people wearing luxurious clothes and drinking pretty cocktails and eating beautiful meals that you want and can’t afford. But give yourself some credit for the stage you’re at right now. You’re making good decisions and taking care of yourself.

As for your money obsession: I was recently talking to a friend about willpower and what a sad slog it can be to forgo things you want in the name of self-improvement. (My overall point was that we should just accept that it’s painful and stop sugarcoating it.) But my friend disagreed and said that she got a specific kind of pleasure from exerting willpower for her own benefit because it made her feel powerful and strong. I liked that. Sure, it’s not fun to turn down a nice dinner out, trudge home by yourself in the dark, eat a responsible omelet, wash the pan, and go to bed early. But if you fixate on how invincible you feel with that self-control at your disposal, it becomes a better night.

Still, you need more concrete tools. So I called Georgia Lee Hussey, a certified financial planner and the founder and CEO of Modernist Financial, who knows exactly how you feel: She also spent her 20s broke in New York and racking up debt. “Your problem is one I see no matter how much money people make,” she says. “Almost everyone struggles to manage their day-to-day spending in a way that aligns with their goals but also with a sense of permission and pleasure.”

Of course, there’s no arguing with the numbers — between your loans, your debt payments, and your New York rent, your finances are unquestionably tight. It’s not like changing your mind-set will magically free up a bunch of cash. Still, there’s no need for you to wake up every morning fretting about the price of your breakfast. To give yourself more peace of mind, Hussey recommends giving yourself a weekly allowance that you have total permission to spend. “Figure out how much money you can spare for your variable expenses — coffee, groceries, eating out, activities — and use it to buy what’s most important to you,” she says. “Your goal is to spend it all. That way, your spending isn’t restriction focused; it’s permission focused but with boundaries.”

I personally started giving myself a weekly allowance for my variable expenses a couple of years ago, and once I got the hang of it, it was like driving a car with brakes that worked for the first time. Suddenly, I could make decisions confidently because I knew how to stop and start.

Another idea is to find a way to earn extra cash. I hate to bring it up because most demanding jobs (like yours, it sounds like) don’t exactly leave you with the energy or time to skip off to your side hustle. But Farnoosh Torabi, a personal-finance author and host of the podcast So Money, says it could be the key to feeling more comfortable. (Her own background: When she lived in New York in her early 20s, she was $30,000 in debt and made $18 an hour.) “You don’t just have a mind-set problem — you have an income problem,” she says. “When you have debt, a $55K salary isn’t going to get you very far in New York. I know it’s kind of a tired idea, but side hustles work. That’s what I did to get by, and that’s what a lot of people do just so they don’t feel like every month is such a struggle.”

I am one of those people. When I started freelancing on top of a full-time job a few years ago, it was the first time in my life that I felt financially confident. It was also extremely difficult. I worked constantly, didn’t get much sleep, and was grumpy most days. But it was also one of the best things I ever did for my career, and I made more money than I ever had before, which allowed me to save up and make a smooth transition to freelancing full-time.

Finally, both Hussey and Torabi recommend coming up with a gratitude practice. “I know it sounds dumb,” says Hussey, “but there’s so much science that shows how gratitude helps change your perspective and make you happier with what you have.” It can also help you overcome the shame you seem to have. Whatever got you into this debt and the decisions you made in the past — it’s time to move on. You probably didn’t have the context or even the opportunity to make better choices then, and they’re done now. Put down your phone, stop following people on Instagram who make you feel bad about yourself, or quit social media altogether; it can be a real cesspool of self-comparison. Then take the money you’ve allotted yourself, even if it’s not much, and spend it on exactly what you want.

‘My Budget Is Ruining My Life’