This month, I did a budget, and I’d like to tell you all about what was for me a unique and ground-breaking experience.
A budget? What the heck has come over you, I hear you say? Well, this. Until recently, I was lucky enough to be living in New York, rent-and-bill free, with all my income basically coming under the heading ‘disposable’.
I KNOW. I can best sum up my attitude to money at that point with this picture:
Before that, I lived in a share house in Bristol, UK, which cost me the grand total of £400 a month, inclusive of all bills. Again, most of my income was disposable. And because my incomings monthly were never at risk of not covering my outgoings relatively comfortably (since I didn’t own a car, gamble, play the stock exchange, regularly secure the services of prostitutes, shop for Balenciaga handbags, fly to Dubai to attend diamond auctions, or do any of the other dubious things that can send single people with decent salaries into debt)… this basically was ok.
Oh, and I sort of played at saving money during this time….picked a number out of the air that sounded about right for me to save monthly (as opposed to doing a budget and working out a sensible amount ) and then set up a direct debit and then never thought about it again. If something big came along that I wanted, like a trip to Berlin or a tattoo, I cleared out my savings. NO PROBLEM.
Since I hate talking about money, thinking about money, looking at my bank statement, talking to people who work in banks, going to banks, going to my online bank account, adding up sums, wondering how much money I have, looking at the slips that come out of ATMs, working out what I actually owed from any shared experience and telling people to only charge me for that amount, or calculating the tip in my head, I never did any of these things more than I had to.
Recently, however, I’ve been forced into a reality check. I’ve moved into a flat on my own, where bills are on top of my rent (and unpredictable) and I’ve had to make a number of big purchases, such as furniture. Uh-oh. I realised I needed to do something about it when the idea of checking my statement filled me with a sense of pure dread, and when I had the ‘insufficient funds’ rebuff at a shop when trying to pay for something….in the FIRST WEEK OF THE MONTH.
Don’t worry, friends and parents: today, a sunny Saturday, became ‘ESCAPE THE PLAYPEN OF CHILDREN’S MONEY MANAGEMENT’ day. I’ve now done a grown-up budget spreadsheet and I think that all is well; I’m not about to go on breakfast television, saying to Richard and Judy “I was just too ashamed to say I needed help” under the scrolling banner “Charity professional moonlights as high-class escort to pay off loan sharks’. I have a small credit card bill which will take me a couple of months to pay off, and a smallish overdraft, which ditto. I’ll be fine.
I’m just really annoyed at myself.There’s really no good reason for me to be in debt at all- I have enough money, in fact, my budget spreadsheet shows I should be able to save £500 a month quite comfortably. It just doesn’t happen by itself, it turns out. Sure, I’ve had plenty of fun spending that money in the past year or so; and that’s not to be dismissed. But, right now I could be investing in some new climbing gear, travelling to Strasbourg to visit my Dad, and buying the sofa I need- if I’d been a bit more careful and not waited until I was 32 to learn about managing my personal finances. I was spending money like a child in a playpen throwing rubber bricks around; doing whatever I wanted, not cleaning up after myself, and paying absolutely no attention to what was going on.
So here’s how you can learn from me and find the exit to the children’s playpen of money management:
- If you don’t actually have a clue what your annual salary is, it’s time to spend some time finding out. This is an appropriate time to be ashamed, so do so, but in a controlled fashion, because we haven’t got time for emotions right now. Also, maybe don’t ask HR (thus looking like a dick), until you’ve done a little digging- there’s probably a letter somewhere you should have read.
- Don’t ask Harminder at Vodafone for advice on how to make your next bill not so high because the answer- ‘Ummmm…..Don’t make calls or send texts when you’re overseas’ – is so blindingly obvious, and Harminder sounds like a cool guy; there’s just no need to make him say these patronising words. Listen to him humiliate you with a detailed description of how you managed to get your monthly phone bill to £75; say something like ‘Well, that all seems to be in order. I was just checking!’ in a fake cheerful voice, then hang up and stare dully at your reflection for a few minutes. Have a biscuit, and get used to thinking of eating biscuits as the epitome of fun for a little while. Biscuits are really, really awesome. Especially the plain Tesco’s own brand ones.
- Learn what APR actually means. Then find out what yours is. Then just sit quietly and think about that for a moment. Then fix it, you idiot.
- When you realise that you’re paying for two separate travel insurance packages (one with your current account and individual policies that you’ve taken out for past trips) and two separate mobile phone insurance packages (one with your credit card and one with your mobile phone provider) the important thing to remember is that in a hundred years, you will be dead, and none of this will matter anymore.
- Netflix costs money.
- Audible costs money.
- The alcohol that you bought at that bar in Croatia, to avoid having to dance with or talk to all the guys who looked like Herman Munster modelling for Gap? That most definitely cost money. Next time, just go sit on the beach with that smelly Kiwi backpacker. He seems perfectly nice, and you don’t have to sit close.
- Make a budget spreadsheet! It will terrify the hell out of you but also you’ll feel a tiny bit better- like someone who has recovered consciousness in a small aircraft which was plummeting towards some cliffs, and has rushed to the cockpit just in time to wire back to air control for instructions on how to control it. The aim is to fly it in a sedate manner to an airstrip with lots of adults in dark suits and twinsets, holding out a hand to welcome you to ‘grown-up money management land’. (To stretch the metaphor to breaking point: think of your friends who want you to go for an expensive night out in London, or invest in a holiday to Portugal, as dudes from one of those creepy terrorist cells which really mean it; skulking around the cabin door with machine guns and calling in a wheedling voice for you to let them in. NO. You are in control of your calm, controlled, rather boring plane now, so you are not going to open the cabin door / spend money on another holiday. Doing so would end with your bullet-ridden body being blown in tiny pieces through Portuguese airspace and, later, people watching re-runs of the whole thing on Youtube while eating Doritos.
- When you ring up Scottish Power to arrange to switch your payment method to the cheaper direct debit option, be prepared to a) ask him to repeat everything three times because you ‘can’t understand his accent’, b) get flustered at having said this and then accidentally use the word ‘totes’ which makes you sound like even more of a lameass.
Are other people good at this stuff?
I asked around and found that most of my friends aren’t good at managing money either; it makes me wonder if our whole generation of white middle class Gen Y-ers just sucks at this because our lives have been far too easy. While admittedly not as bad as me, a lot of my friends say they hate managing money; don’t keep a budget; are sometimes scared to ask their balance at the ATM in case it’s bad news; that kind of thing. Actually, only two of my friends keep a regular budget and actually use it, and one of them only does so because he owns his own business and has no choice but to manage his money really tightly. (The other friend is just a penny-pincher who makes all her own furniture and clothes for fun and hates spending unnecessary money, which is one of the things I like most about her).
Despite this, most of my friends stay on top of it. I think the way I got myself into such a state was probably being single and choosing to live alone without factoring in all the additional costs. First, cos I bet most couples force themselves to take a look at their finances every now and then because it’s less scary when there’s two of you. Second, everything is just way more expensive when you’re single, especially holidays, and I’ve been on two of them this year (one of them, the Grand Canyon, you can read about here.)
Basically, I am an outrageously lucky and fortunate person who had a well deserved financial scare. Learn from me; if you’re scared to look at your bank balance, the thing to do is go and scrutinise it for a few hours; dive right into the awfulness. Once you get back behind the controls of that plane, you’ll feel like a grown-up again. Yes, it’s really, really boring; but in the long-run, flying your plane to some sort of actual pile of savings you can buy things with, is way more fun than being ejected from the burning plane, and having to move back in with your parents. Think you can watch Stewart Lee’s entire season of comedy while lying on your bed half dressed, eating chips from a paper bag and spilling balsamic vinegar down your bra at your mum’s house? No*. So face it: the money management playpen is not a place to be in your 30s. Time to get yourself to grown-up money management land, with all the guys in the suits. Sort it out.
And if you end up writing a blog about the whole experience, with mixed metaphors about children’s playpens and airplanes in it that ultimately make no sense? Don’t worry about it. At least that couple of hours didn’t cost you any money.
*I know some of you are thinking this is also not a thing you can do in grown-up relationship land, but you’re wrong; you just have to ALSO be really good in bed if you’re going to get away with this.