The Personal Balance Sheet | brokeGIRLrich
Sometimes it’s ok to embrace your latte factor. A lot of budgeting info is written to squeeze every last penny out of your income. There may be times in life when you need that – and knowing that if you cut out the lattes for good, you’ll save a couple hundred dollars a year – this is good information to have.
Some folks who write about budgeting are all about the extreme savings. Save 97.9% of your income and you can retire in 13 hours! To some people, this might not actually be appealing.
And that’s when your personal balance sheet comes in. If you’ve got a personal balance sheet, you’re probably a pretty money savvy person – even if you’re carrying some debt or have a mere reasonable savings rate of 20% of your income.
The personal balance sheet is really just a list of trade-offs you are willing to make to keep your budget in check. I might get a personal finance glare from Miss Super Saver over there when I walk into a blogger meet up with a Frappuccino in hand, but I only get a hair cut every other year – and when I do get it, it’s of the $30 or less variety.
I know that being able to embrace my latte factor makes me happier person. My Sugar Dragon gets a little love from their alarmingly (and delicious) saccharine beverages and I am always aware of whether or not that $5 is actually in my budget to spend before I pop into the nearest Starbucks.
A lot of super savvy money folks really enjoy some commonly labeled “budget busters.” You may have an expensive shoe habit – but no desire to travel. You may have the travel bug – but you never buy clothing outside a thrift store.
The glory of personal finance is how personal it is! I’m not going to argue that there are some basic rules that works for (nearly) everyone:
- Make a budget (although maybe you don’t have to follow it forever).
- Save at least 20% for retirement.
- Have a well stocked emergency fund.
- Pay off your debts.
- Shop around for the best deals.
But the thing is that once you’ve got a solid groundwork of personal finance skills, from there it really does branch out for everyone based on what you like to do. While you are first building that framework and trying to squeeze some extra money out of your budget to pay off debts or stock an emergency fund, it’s terrific to know all the ways you can cut corners and achieve your goal ahead of schedule – if you want to.
There’s also nothing wrong with checking out your budget, setting your timeline and knowing it’ll take you 10 years to achieve all those goals, Frappuccino in hand. As long as you are happy with your progress, that’s really all that matters.
I totally relate to this. I wouldn’t call myself thrifty or frugal, but I don’t go into debt for my lifestyle either and make a budget every month. There are lot of things that just aren’t worth spending my money to me-cable, daily drink stops, packaged junk food. Balance is the key! My goals include slowly making it to financial independence while being able to enjoy life now. I’ve quantitified how I’m going to reach my goals and my budget reflects it so I can enjoy life in the meantime spending money on things that matter to me!
We indulge in things we want on a fairly regular basis, could be a good coffee or out for sushi – if we didn’t we would probably go nuts!
We try to cut out the stuff we don’t get that much joy out of or spending money out of pure laziness (eating out for lunch at work everyday)
Apathy Ends recently posted…Credit Card Spending Review – Month 2
Doing what works for you as individual is the most important thing. Everyone values different things. I have no car, but spend more on quality shoes that I can walk for days in – hard when you are a professional woman. It is valuable to me. And my aesthetic.
ZJ Thorne recently posted…Planning For a Graduate’s Future
I need to remind myself of this more often. I fall in the camp of “Save 97.9% of your income and you can retire in 13 hours!” but often forget to live along the way.
This serves as a great reminder to enjoy life along the way.
Although, to be fair, if you manage to save 97.9% of your income for a set period, you can really be ahead of the game. I think some of the balance can also be going really hard towards a goal for a set period of time. But it can be hard to readjust to the less strict version of a budget after that too.
HAHAHA gold!
The last couple months since buying my house I have been hustling to earn more to make extra mortgage payments, as those early extra lump sums knock SO much off in interest in the long term. But I’m stepping back now and focusing on other things I need to do, like pay for new glasses, a trip to the dentist, etc.
NZ Muse recently posted…All else being equal – wouldn’t you rather have the money?
I think that you touched on a very touchy topic for most. But a reality and a must do if you want to live a stress free and debt free life. I LOVE Starbucks like many women, but I can not afford it on a daily basis and my budget tells me so. i get to splurge once in a while and when I do, I must say I feel very rewarded.
Amen! This is why we decided to embrace spending more money on groceries and not try to limit ourselves to such a low budget in that area. Instead, we spend less on other things and enjoy good food. 🙂
Catherine Alford recently posted…3 Ways To Stay Calm and Happy During a Major Life Uproar
That’s awesome! I’ve been doing a Whole 30 this month and was a little anxious about the extra food costs, but since I can’t really eat out or grab anything on a whim, I’m pretty sure I’m actually coming out far ahead this month.
“You may have the travel bug – but you never buy clothing outside a thrift store.” Raises hand! Though I did just get a gift card as a part of a class action suit that I never filed to join. So I’ll be dressing fancy at least once every two weeks.
femmefrugality recently posted…Save on Darien Lake Season Passes
That’s cool! I don’t remember filing suit in a RedBull class action (though apparently I did) and I got $4.25 because it literally did not give me wings. …which is honestly probably for the best!
Haha imagine the suit if it had!
FF recently posted…Save on Darien Lake Season Passes
I agree completely. Knowing what your priorities are is half the battle, and spending on them rather than everything else is the other half!
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I personally feel that even during debt payoff there are some things I will not give up. It keeps me sane. We have certain goals that we probably could obtain sooner if we cut out all the little treats, but I feel we are able to stick to our budget better if we allow for certain things we love. So go get your latte girl!
Absolutely! There are so many things I just don’t care to spend money on, but at the same time, I’m willing to drop $2 on a little bottle of Fiji water because I swear it tastes better. Whatever floats your financial boat is what I like to tell myself and others:)
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Ah, I hate Fiji water – but I guess that’s proof it does have a unique taste!
Yep, it’s about priorities for me, I’ve cut back in most areas, but I will get my hair cut and colored every 3 months and buy an expensive foundation twice a year. Those aren’t necessities but I like to have nice(ish) hair and makeup. With that said I’m not fussed about buying new clothes or other things. (So my hair and make up looks ok but outdated clothes lol!) It’s a compromise but it works for me!
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