Budgets are like pokémon. They are great tools to help us through our journey and reach our goals. This four-part series takes a look at my budgeting history and my journey to finding my current budget.
In part one, I shared my experiences of how my budgeting developed over the decade before moving to New York City.
In part two, I shared the challenging battles from my first year living in New York City and my wins and losses.
In part three, I walk through my process of breeding a new budget with better stats.
After a year of knowing nothing about personal finances I recognized my downfall and started to do research. Thanks to the internet I discovered a lot of information. I even started following my first financial blog Budgets Are Sexy.
My personal finances were in need of a well-balanced financial pokémon team. Being an Ace Trainer I knew that one method to building a strong team is to start with a strong base pokémon. By the end of August, I decided that my budget would be that base pokémon. September determined how I wanted my budget to function and how I wanted to breed my budget’s stats.
My budget’s function
To figure out how my budget needed to function I first started with the online budget I was already using. My online budget was a series of numbers set up to limit how much money I could spend each month in many different categories. The website tracked and categorized the money I spent and updated how close I was to reaching those limits.
Although the online budget tracked my income, it confused me by including the money transfers from checking to savings and vice versa as income. My income numbers were always higher than they should have been and I became oblivious to them. I stopped considering how much I really had coming in and focused on limiting how much was going out.
This was not the best plan either. My limits were based on my average spending for each category over the past six months. On top of that, my subconscious misunderstood the limits as goals. If I was under budget near the end of the month, I would think I needed to spend anything I had left. These two habits became an echoed voice slowly increasing the budget’s limits each month.
In my research, I ran across an article that wrote that budgets are guides that give every dollar a purpose or a job to do. This lesson resonated with me. I needed to set goals for my money, not limits. This was already how I was naturally using my budget and I figured I should work with my nature power instead of against it.
I had a steady job that paid weekly and a good idea of how much income I would make each week. I totaled up my estimated income and the total due from my bills. I realized that based on those two numbers, I could easily pay all of my bills with my paychecks.
Finding the right stats to breed
Now that I knew how my budget would function, I had to figure out what stats it needed. In the Pokémon games, a pokémon’s stats are numbers that determine its strength, speed and how much damage it can take. The stats for my budget were the numbers that determined how much money from each paycheck was assigned to each bill, or job. Just like breeding and raising a pokémon, I needed to consider the budget’s IVs and EVs and how they affected its stats.
IVs, or individual values, are the DNA of each pokémon that tells its body how to develop each stat as it grows. These are unchangeable. The higher an IV, the more that stat will grow.
The IVs for this budget were how much was due on my bills. As I developed my budget, these were the numbers that I started with. They told me how much money to assign and to which bills each month.
EVs, or effort values, result from environmental training. Pokémon gain these from pokémon they battle, vitamins, super training or training on Isle Evelup. EVs encourage the growth of the pokémon’s stats along with the IVs but are adjustable. There are ways to lower EVs if a trainer wants to rebalance them later.
The EVs for this budget were when and how each bill got paid. I needed to decide which paycheck would pay which bills and which bills would get paid with more than one payment using different paychecks. Like the EVs, when and how I assigned each payment could be adjusted in the future.
In the pokémon games, the IVs and EVs work together to produce a single number for each stat and are presented in a single screen. A trainer always has access to this screen and can see each stat quickly.
My budget pokémon’s IVs and EVs worked together to assign jobs to each paycheck and place those numbers in a chart. By printing this chart out and hanging it near my computer screen I had the same access to it as the stat screen in the games. I could always see it, whether I needed to or not, and it helped me remember what I was doing with my money.
Hatching my budget
After all of this breeding, I discovered an egg! After many steps, it hatched and looked great. (Below)
My budget was set up in a chart where every column represented a week’s paycheck for a month. Each bill was assigned to the paycheck the week before it was due. I split some bills, like rent, ACS and my Visa bill across numerous paychecks. Paying with multiple payments for some bills helped balance with bills that couldn’t do multiple payments.
At the beginning of October, I hung this budget up and each Friday I put the money towards each assignment as I paid bills. Then after I was done, I could use the leftover cash for whatever else I wanted to. If I wanted I could pay some extra to student loans, I could put it in savings or go out to the movies. The leftover money became my fun money.
This budget has been pretty successful for me and I have been using it for the past three and half years. This budget is a scope lens helping guide my money to the right place. Since I have started using this budget, I have never been short on rent or missed a payment. I even paid off a student loan. This budget has continued to grow and evolve over time.
In part four, I will illustrate how my newly hatched budget leveled up and grew into the sturdy financial pokémon it is today.
To be continued...