Monday, September 19, 2016

Revisiting the Budget for the Millionth Time

I started writing a post about the emotional impact of medicine (thank you counseling for digging up all the painful memories and for making me feel all the feels), but it was too much for a late night blog post, so I thought I would write briefly about budgeting (yet again).

I thought I had finally solved my budget dilemma by simply increasing my daily allowance, but when I tried to put it into practice, it just didn't feel right.  I found myself alternating between feeling stressed about essential purchases like cat litter because they would put me over budget and searching for frivolous things to spend money on because there was suddenly room in my budget.  I am constantly looking for balance in my life, and the budgeting system I had used for the past two years was starting to feel very unbalanced.

(Physician On FIRE wrote a good blog post about this phenomenon here.  Definitely worth a read.)

The problem came to a head over the long weekend, when I had a nice chunk of money sitting in my budget, and I decided to spend it on a massage.  Not a utilitarian therapeutic massage, of course, but an over-the-top, self-indulgent spa massage.  Complete with a complimentary robe and slippers, assorted spa snacks, and a post-massage relaxation room to allow me to "slowly re-integrate into the outside world".  It was more than twice as expensive as any massage I'd ever had, and it made for two of the most pleasant and relaxing hours of my entire life.  Pure bliss.

But then it was over.  And after handing over a ridiculous sum of money, I was left with nothing but the memory of Renaldo's hands massaging all of the stress out of my body.  And while that is a lovely memory, it doesn't get me any closer to financial security.  Later in the day of the massage, as I was following the endless rabbit holes of the Internet, I stumbled upon a blogger's Philosophy of Money.  And one section really stood out for me:

"I want to live in such a way that I minimize the number of years that I have to work for money. I’ll have a modest house, car and lifestyle and will never spend more just because I earn more. I’ll invest any surplus so that I can live on my own terms sooner than later."

Yes.  Exactly.  Just because I'm finally earning my doctor's salary doesn't mean that I want to inflate my lifestyle to the typical doctor's lifestyle.  I want to live reasonably and modestly so that I can save any extra money and be in a position to retire early(ish).  I want freedom more than I want complimentary spa snacks.

I will never spend more just because I earn more.

So I'm revisiting the budgeting yet again.  And instead of trying to stick to a defined spending limit, I'm trying to focus on maximizing the value I get from my spending.  Whenever I make a purchase, if it isn't something I clearly need (Cat litter - yes.  Wine - kind of?), then I try to determine whether it's something that is going to enrich my life more than the time off that I could buy with the money.  Going back to the ridiculously expensive massage, I could have lived for two days at my current spending level for the cost of the massage.  If I'd invested the money for ten years, it could have bought me four days of freedom.  When viewed in that way, the decision is easy:  I would always choose two days off of work over a massage.  No matter how perfect Renaldo's hands may be.

Interestingly, this approach to budgeting seems to be working better for me so far.  I recently had to buy cat litter*, and I didn't panic over the fact that it put me over budget.  I'm currently sitting significantly under budget, and I'm not looking for things to spend money on.  I'm just trying to focus on the things that really make my life better, which can very rarely be purchased.

*Why do my cats have to eat the most expensive cat food and poop in the most expensive cat litter?  If I didn't love them so ridiculously much I could be much better off financially.


  1. This is how I've typically approached budgeting. I really dislike doing all the little categories and trying to force myself to only spend so much. I think I'm lucky in that I am not naturally a big spender. I always ask myself "Do I want this more than X?"

    X has varied over time -- right now, it's money in retirement and for family vacations and for my kid's college fund. In college and grad school, X was typically a night in a hostel or a place ticket somewhere fun. In high school, X was a big fat wad of money with no labels attached. I just loved to see my savings account grow (still do).

    I do sometimes stress because I spend more than I theoretically want. I still wish I could only spend $300 a month (outside of rent), but that's not reality when I live with a cat, and a toddler, and a husband. But keeping most of my purchases to needs with the occasional want that I've really thought about helps a lot.

    1. I also can't do the individual categories. Until now I've just been giving myself a daily budget and spending it as needed/desired.

      $300 per month seems ridiculously small. That's less than social assistance provides where I live!

  2. I guess it all depends on whether you feel deprived or not.

    I like the idea of saving for the future and being able to retire earlier but

    1) I actually really enjoy many aspects of my job, I'm good at it, and I make a significant contribution to society that is very rewarding. So I see myself cutting down in the future, but not retiring completely for quite some time. I'm lucky that my job is flexible so I could easily just work 2-8 days a month. I'd have to crunch the numbers (CMPA, AMA, CCFP membership, CPSA, etc.) to make sure it'd be worth it, of course.

    2) I got diagnosed with cancer 4 months ago. I'm an otherwise young, healthy woman with no risk factors whatsoever and no family history. This came out of nowhere and made me really question how much gratification I want to continue to delay. I mean, for now, I can continue to make money, sock away a decent amount of money for retirement and still enjoy some little luxuries here and there, and I'm happy with the balance I've achieved. I suspect that balance point is different for everyone and would change depending on circumstances.

    1. I am so sorry to hear about your cancer diagnosis. I hope that the treatment is not too terrible and that everything turns out okay. I can only imagine how that would cause you to reassess your priorities in life and to not want to defer gratification!

      I'm certainly not trying to delay all gratification or to remove all sources of pleasure from my life but rather to try to keep my spending at a reasonable level. I've been pretty happy with my spending for the past two years, so I don't think I should need to inflate it significantly to remain happy with it just because I'm an attending. There will definitely still be some massages in my life - they will just be much less ridiculously expensive ones at the place I've been going to for the past decade.

      Wishing you all the best.

  3. What has worked best for my husband and I is going through need versus wants. If it's a need (cat litter for us is definitely), then we do not hesitate. If it is a want, we evaluate whether it is a want that we will regret passing by. In practice it played out like this last weekend getting Halloween decor: is it a need? No. But it was a good want because we are having a Halloween party and want the atmosphere to match the holiday. When it came down to the decor we contemplated different things and if I knew if it was something that once I walked away from I would dwell on, I got it. $50 in Halloween decor isn't too bad but if we bought all the wants it would have added up. This has helped us avoid having a budget and let us actively feel satisfied with not constraining ourselves to certain amounts. I honestly believe it helps us put more towards loans and remain happy than if we did it any other way!

  4. I hate budgeting so much, so I don't do it. Instead I set the big expenses first, make sure we're on a steady savings clip, and make sure there's enough money in the slush fund.

    But I know budgeting works for other people.

    I remember having that sticker shock thing once when DH had saved up $500 of his allowance and was going to spend it all in one fell swoop at Zingerman's. Even though it was his money to spend as he wished, that idea made me really nervous. I just couldn't handle that big a lump on perishable luxuries. (So he cancelled the order.) Now though I don't think it would affect me like it did. I've adjusted. I don't generally drop large sums on things without a lot of thought, but if DH wants to spend his money on whatever it no longer provokes that kind of reaction.