Too poor to budget.

Did you know that there are iphone budgeting apps? This strikes me as a great oxymoron, and perhaps a sign that people do not realize how absurd it is to maintain a budget on that great instrument of privilege, the iphone.

I remember the first time I tried to put together a budget. My financial stress had been steadily growing, and I decided that the key was to control my spending. I’m a genius, right?

I was stressed because it was not unusual to be down to the single digits in my bank balance by the time payday rolled around. Those were not good times. I would look at that bank balance number, and I would think to myself about all the stuff I shouldn’t have done and should not have bought. When I was down to just a few bucks, I would hit the credit card hard to keep from going negative on the bank account, worrying and criticizing myself at the same time. I had been living with this cycle of financial stress and self criticism for a decade. Basically, for my entire adult life since I graduated from college and started living on my own.

I didn’t even know how to start a budget. My K-12 education and college education had left me without the practical life skill of budgeting. Now, I’m not blaming anyone but myself. But as I’ve grown into my adult years, I realize that two critical life skills were not available to me as classes in all my years of education: how to manage money and how to maintain health. Nowadays there is all kinds of information on budgeting. If you’re reading this on the internet, and you are, you can google search “how to make a budget” and there are many many wonderful answers out there. In terms of health, there is a lot of information which isn’t really helpful when you’re in trouble. Good luck.

But if I had learned practical budgeting skills in school, my post college years would have been a lot less stressful and I would have made different decisions.

I had resisted doing a budget for so long, because I believed in my mind that budgeting is what poor people do. Sure I grew up poor, but I just couldn’t see myself as a poor person. For crying out loud, I had a job! I was living on my own but responsibly with roommates, in order to keep costs down. I knew enough to know that I couldn’t afford to live alone, so I was already ahead of the game by having roommates, right? I now know that a budget is a basic necessity. I learned this not from school, but from the school of hard knocks.

Anyhow, I had to get rid of this problem of only having a few dollars left at the end of the month and I determined that a budget was the solution. I sat down and I really went at it. I started to do the math to see where things fell out. I put what I got out of my paychecks every month on the top, and then started subtracting. I subtracted out rent (the big expense), school loans (the other big one), all utilities, transportation expenses (easy to do because I had a monthly commuter card and no car), and what I had left over was just a couple hundred bucks to live with for the month.

I was shocked. Around $300 was all I for all food, clothes, toothpaste, shampoo, everything. This $300 was the reason my credit card bill kept on growing every month and was by now $4,000. I was spending way more than the $300 something I had. My heart started to beat really hard, and I just sat there staring at that awful sheet of paper.

And then I just put the budget away and resolutely traveled back to the land of denial. I would think about it tomorrow, like Scarlett O’Hara. Although I was working myself into a hole, I was fortunate. It was just me and I had no family to take care of. I could find a cheaper place, try to work something out with the school loan folks and pay less each month (which would make it worse for me in the end, but that’s a different story), I could get a second job on weekends. I was one of the lucky ones. But the shock of seeing those numbers was a big one, and in that moment I just didn’t have the energy to radically change my life. So I kept on, same as usual, but maybe with less latte. It wasn’t until a decade later, when I was in bigger trouble but with a bigger paycheck, did I finally get myself out of debt.

Just today in the news, the Associated Press reported that 4 out of 5 adults struggle with joblessness, near poverty, or reliance on welfare for some time in their lives. 46.2 million Americans are actually living in poverty, which is defined as $23,000 for a family of four. Budgeting is an unrealizable dream for the impoverished. They are just barely hanging on. I hope that no one ever says that the poor are irresponsible with money and need to budget better.

What were your reactions the first time you made a budget? Or how about, what are the reasons you are not making a budget?

Below is a link to the AP report, it will open up in the same page.

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