So when I got my post-grad-school job, I spent the first six months living like I was still in grad school. I had to buy some furniture for my new apartment, and a (more-)professional wardrobe for my new job, but other than that I was on a strict budget. My goal was to put three months’ of living expenses in a savings account, which I did by Christmas.
I pulled it off by creating a cash-flow budget, in which I pre-populated expected debits and credits (bills, paychecks) and anticipated debits (Christmas presents, birthday dinners). Then I gave myself $100 in “life money” per week to cover all groceries, clothing, movies, happy hours, etc.; and I stuck to it.
This caused some interesting moments, the most humorous one being a conversation with a friend in which I tried to explain that yes, I was making more than enough money to survive but no, I couldn’t go buy a mixing bowl this week (I was mixing things up in old yogurt containers) because I had already earmarked the $11 for museum tickets, and any more spending would put me over $100.
After Christmas, I decided to cut myself some slack for the occasional week in which I spent $115 instead of $100, and gave myself a new weekly budget of $150—which I promptly ignored. I still put large chunks of money into savings, but it took me nine months to save the amount I put away in the first six.
Where did this extra spending money go? Meals with friends, clothes, and long afternoons spent writing at Tryst. The dinners with friends I don’t regret for an instant, nor the clothes; but I do have to smile a bit ruefully at weeks in which I packed every lunch and cooked lentil soups “to save money” and then spent the same amount I spent on weekly groceries on Saturday and Sunday afternoon lunches. (If you’re a math nerd who knows a bit about average food costs, you can probably figure it out: $40 on groceries; two meals at $20 each, including tip.)
At the beginning of the year I set a savings goal for December 31, 2009; today I sat down and realized that to achieve that goal, I’ll need to go back to my original budget of $100 per week. This actually shouldn’t be too bad, since (luckily?) I just bought enough clothes to fill out my wardrobe through winter—though to be fair, after December 31 I will probably want some new ones just because I am that kind of person.
And here I am, still in Tryst, still writing; only I ate quinoa at home before coming and am surviving on a single cappuccino instead of an entire meal.
So this is what $5 looks like. Including tip.
And we can pull this off...