A common refrain among my friends and peers:
We make good enough money, but we feel stretched thin.
Stretched thin. “Like not enough butter over too much bread,” as Bilbo Baggins bemoans.
The simple fact is, we have a lot of competing interests for our money. Housing, savings, and…rings?! Ok, ok, enough Tolkien.
I think there’s a pretty solid socioeconomic argument to make here. Is there a structural issue at play when so many hard-working young adults feel overwhelmed by the economic system? Quite possibly!
But I want to focus on the personal side. On things that you can control or change today.
I feel that “stretched thin” feeling too. It can be scary, like the monster under the bed. But shedding light on the feeling–understanding why it exists–is just like turning the bedroom light on. Suddenly, the fear shrinks, feels distant. By tracking my finances in detail, I feel like I’ve exposed that shadowy figure in my budget.
Why have I been stretched thin?
Inflation of the important stuff
Everyone agrees that a living space is necessary. But there’s a big difference in the monthly budget between a simple 1 BR apartment, a spacious 2 BR, and a sprawling penthouse. Nobody would tell you to live on the street, but you can create a significant savings by focusing on the “big three” spending categories: housing, food, and transportation.
Money going into retirement accounts
Hey, this ok though, right?
If you’re feeling a little stretched because you’re focusing on your 401(k), IRA, etc…good!
Don’t change your contributions. Instead, change your mindset. You’re feeling stretched only after you’re being responsible and paying yourself. That’s not so bad, right?
Too much fun
As I write this, I’m getting ready for two weeks of vacation, travel, camping, etc. And so far this summer, I’ve road-tripped, relaxed in the Finger Lakes, been in a wedding (and two bachelor parties…yikes!). Lots and lots of fun.
It takes a toll on the budget! I’ve been saving up for months for these events. And even then…I feel stretched thin!
I think fun is great. Duh. But there exists a balance between fiscal responsibility and letting the good times roll. The fun becomes even more fun when I know my budget won’t be hungover afterwards.
Not planning ahead
Speaking of budgeting for fun…
I knew that my girlfriend and I would be taking a weekend trip to Florida for a wedding in March. I knew there would be airfare, a hotel room, food and drink. And how much did I set aside in my budget for it? ZERO. I didn’t even think about it until after the weekend. This money has to come from somewhere.
I had enough buffer in my budget that I essentially borrowed from April’s budget to pay for the trip. But then I had to be smart over the next few weeks to “repay” April. (PS: this is how YNAB works. If you overspend, you have to find a way to fill that hole). Does this cycle feel familiar to you? Overpaying now, and then borrowing from the future? I used to do it all the time.
I’ve written before about the “Buy that!!” voice that we have in our heads. People like to buy stuff. I understand it. Just like I wrote about in that post, I’m waaayyy too guilty of buying stuff to pretend to moralize other people’s purchasing decisions. You buy what you want to buy!
But I also think it’s ok to say: maybe there are some purchases that aren’t worth the “stretched thin” stress that they produce. That’s all. You can save money and de-stress.
What’s the solution?
I can speak for myself: knowledge.
Once I started paying attention to all the places my money was going, I began to “fatten up” my stretched thin feelings. It’s that simple. Knowledge leads to change, measurement leads to management.
But what makes you feel stretched too thin? I’d love to hear from you.
Let me know here, on Twitter (@BestInterest_JC) or on Reddit (u/BestInterestDotBlog). And thanks for reading the Best Interest blog.