Money Matters: Using Budgeting as a Tool for Empowerment
Written by Jordan Cooley
I’m 24 years old and one of my proudest accomplishments is that I have a Google Folder with
three-years-worth of my spending habits in it. Literally, I have recorded every penny I have spent
for the past three years in an excel spreadsheet that I formatted.
Only a small part of that has to do with my logical and (somewhat) anal way of thinking.
A larger part has to do with the fact that I grew up poor. Money and how to strategize using it
was a constant conversation. My mom would explain how each cent saved added up at the end,
that it was almost always worth it to by store brand rather than name brand because $.20 saved
for every item she bought each month could add up close to $50.00. $50.00 is a lot for a single
mom of two kids.
And while yes, I had to unlearn a lot of anxiety surrounding money, I am grateful to be cognizant
of my spending habits to know how to save.
It saved me when I got to college and was surviving on loans and working full-time. I knew how
much I needed to work to meet my bills and put a bit away so I could take time off when finals
or projects came around. It helped me best utilize the money I earned when I worked at JP
Morgan for a summer, knowing how to make ends meet, but also use 75% of that for a study
abroad trip. And it helped me when my ex and I broke up, knowing that I could afford to move
out and live alone.
In other words, knowing how to budget effectively for my life empowered me.
So when I hear co-workers and peers say, “Oh I can’t look at my money right now, I know it’s
no good,” it blows my mind. All I want to do is shake them and say, “BUT IF YOU KNEW THE
ANXIETY WOULD BE BETTER.”
And while I can’t sit down with everyone and break down their income, their debts, and their
financial dreams, I can explain how I figured out how to make this work for me.
Step Zero : I read this Reddit Flow Chart.
This flow chart concisely explains how we should strategize our money. It shows that yes, we
should buy groceries and meet the minimum payment for our student loan debts before starting
an emergency fund or a Roth IRA or feel guilty that we can’t donate to Planned Parenthood
Honestly, Reddit (specifically r/personalfinance) is my biggest resource for all my money woes
and financial dreams. It helped give me a frame work to take these next steps in learning how to
Step One : I found a strategy to record what I spend.
This was the hardest thing for me to learn how to do. Because of my upbringing, any money
spent brought a sense of instability and shame. There were always these nagging thoughts of,
“Did you really need to buy two avocados? Will you have enough to buy a new tire if one blows
out? What will happen if the money you spent on those jeans needs to be used for rent?”
And so, when I started on this journey, I thought apps that automatically logged and categorized
my spending would be best. I wouldn’t have to look at my bank account and feel all those bad
feelings. It would just poof — be in the app and I’d have that data.
What ended up happening though was that I wouldn’t open the app. Suddenly, those reminders
and notifications on my phone also brought a sense of anxiety.
I had to figure out a different strategy — one that desensitized myself to spending money and
gave me the information I needed to know to spend money well.
Which is why, one day three years ago I built an excel spreadsheet that I manually record what I
spend and it populates not only the monthly budget, but then pulls into a year overview so I can
quickly see a month-to-month comparison.
In this spreadsheet, I’m also able to see the difference of how much I make, which is just as
important as knowing what you’re spending. Bringing me to the next step —
Step Two : I looked at how much I made each month.
For a lot of people, this number is stagnant. You’re salaried, you’re paid twice a month on the
15th and the 30th and that’s not going to change unless you get a raise or you quit. Still, it’s
important to compare what you make total versus what you spend. To see if you get close to the
line, if you go over it, or if you’re drastically underspending and could be a little bit freer with
yourself or with gifts.
But for those who work hourly or work in the service industry like I do, that amount can change
drastically depending on how people tipped that month or if you got sick or if there was a city-
wide water boil notice and everyone’s shifts got cut.
I figured out the best way to combat the ever fluctuating paycheck was to use the month prior to
fund the current month (or everything that I make in January sets up my budget for February). I
fixed my excel spreadsheet / my budget to reflect that. No longer was I spending the end of every
month trying to guess how much I would make the next month so I could kind of guess what I
could spend the next month. I knew that I would have about $2,400 for the month of December
because that’s what I made in November.
This being said, when I decided to start doing this, I had been actively budgeting for about two
years. So I had the capital and the flexibility to not have to use the money I made that month to
pay for things. Which, if you’re not there yet, using the 50/30/20 (or some variation of that) rule
can help you get there.
Step Three : I broke down my income into the 50/30/20 rule.
What this means is I looked at my income and my spending and decided the ‘must’ or ‘need’ part
of my expenses should equal about 50% of my total income, 30% should be my ‘fun’ or ‘extra’
money, and 20% should be paying off debts and going into an emergency savings account.
I did this to give myself a frame. Taking December’s example, if I have $2,400 that meant :
- $1,200 went to my needs (rent, groceries, utilities, Spotify, vet bills)
- $720 went to my wants (going out, dates, clothes, another candle)
- $480 went to savings and paying off debts (or rather, for me right now, all of it went to
paying off debt)
Of course, this is if I lived in an ideal world. A lot of times, I don’t. Sometimes I don’t pay more
than the minimum for my loans because I really needed a new pair of jeans or I needed to buy a
dresser. Sometimes I don’t go out as much because paying off my car sooner rather than later
mattered more in September than it did in December.
But that’s part of the joy of budgeting — because I know what money I have to spend each
month and have a plan on what I’m going to spend it on, I know that I can afford to live and
enjoy my life.
Step Four : I took a deep breath.
It has taken me years and a lifetime of being stressed about money to do this by second nature. It
will take time to learn what budgeting looks like for you. And it’s okay to bumble along and
need help — that’s why apps like Mint.com exist and for small business owners, why
This is hard.
The important and biggest part of this though, is that we’re having the conversation. You’re here.
You’re learning. You’re developing a new language and a new skill to not only empower
yourself, but to hopefully empower your friends and family.
Jordan Cooley is the associate editor at Pass/Fail. In addition to that she is a writer and self taught artist in Austin, TX. She graduated from Texas A&M with a degree in English and has worn many hats, including Slam Master and President of a poetry non-profit called Mic Check, financial analyst for JP Morgan, researcher and executive assistant for AmeriCatalyst and now bartender at Better Half Bar. Each day, she is feverishly working towards becoming a better ally, a more nuanced writer, and a woman who accepts the goofy slips and slides of life. Follow on Insta @jarcy_ and on Twitter @jrcooley_ to see what kind of falls she makes on the daily.
This blog is sponsored by Freshbooks, though all the thoughts and opinions expressed in this post are those of the writer and approved by Pass/Fail. Freshbooks is a cloud based small business accounting software. Send invoices, track time, manage receipts, expenses, and accept credit cards. They make managing every aspect of your business easier, whether that’s project workflow, billing, or following up with clients who haven’t paid you yet. Pass/Fail readers can get two months free to give it a try by clicking here.