If reality has knocked me sideways, lying along the shore of Lake Champlain, at sunset, on a balmy, summer, Friday afternoon, is a nice place to look up from the ground.
Why so salty?
Some have said that in our culture, people are quicker to openly talk about sex than to talk about finances. Yet here I am, in this post, giving insight into my personal finances and my challenges managing them toward my aim of future homeownership.
Six months ago, I posted part two of a three-post series on Black Homeownership & Generational Wealth. By this third post, I hoped to report on steady progress in savings, progress that would both make-up for and surpass the setbacks of moving and medical bills last year. I hoped to report on completing at least half of the free FDIC “Money Smart for Adults” financial literacy course. Well, lemme tell you, it may be helpful to quicken my completion of that course and get money-smarter faster. Savings-wise, I am no more capable of affording a down-payment on a land purchase this year than I was last year, right before I made an offer. In fact, I am less capable. Why and how did this happen? Let’s dive in to a…
Major Lesson: Exercising self-control and ordering of priorities in the short-term are imperative for realizing long-term aspirations. They are also imperative for claiming any seriousness about realizing long-term aspirations. Actions speak louder than words.
When it comes to management of my finances, I am not considering my future as readily as I consider–and satiate–the needs and desires of my present.
Kool-Aid Money, [Champlain] Taste.
At work one day, my coworkers and I took a detour in discussion to clarify the official definition of the word bougie.
“It’s means [you’ve got] ‘Kool-Aid money with champagne taste’!,” one exclaimed.
I let out a guffaw, chuckled, smirked, shook my head. I need to remember this!, I thought, peeling a sticky note from atop the pasty yellow block and writing it down. This “official” definition is posted to my cubical divider to this day.
Put another way, this particular definition of bougie* is commentary on someone living beyond their means. We are ALL capable, no matter where we find ourselves socioeconomically, of living lives we cannot afford. While I am thankful for the the opportunities afforded me from 2018 to 2019, I cannot afford these forms of adventure at my most recent Spring/Summer pace. By the way, I took two more trips to Vermont in July (more on that in the next Stride update). Outside of one travel commitment in the Fall, I will not be voyaging anywhere through the end of December. This Spring/Summer, my eyes well exceeded my pocketbook, my ambitions my resources.
Major Question[& Answer]: How can I better consider my future as readily as I consider the needs and desires of my present? First, I need to look at where and how I have spent my money. It will reveal where my priorities truly lie, in deed, regardless of intention. Problems identified, I can regroup and pivot my spending priorities [back] where I desire them to be: reconsider, recalculate, re-order, and balance what is important in a way that better considers my future while living in the present.
Making a budget is one thing. Keeping a budget is a beast. It’s an ongoing formation, a discipline. It’s self-discipline.
The budget itself is a living chart. It’s a visualization of my needs, my desires, my priorities, and my goals, and all are subject to change. On what do I spend? For whom do I save? The resource is fixed.
Whether or not I keep my budget is a truth teller to where my greatest needs, desires, priorities and goals reside. It’s also a truth teller to where my greatest addictions, impulsive purchases, compensating indulgences, F.O.M.O. insecurities and the like, wreak havoc and throw me off course.
When I do keep my budget, I am forced to be creative in meeting all my priorities and goals (especially when making less money). I am forced to be thrifty, inventive, minimalist at times, to rediscover simplicity, to savor exceptional extravagance, to seek value, to remember people over things. L’essentiel est invisible pour les yeux. 😉
Ch-ch-change & Changes
Last year, I learned that I needed savings for pricey, unexpected life changes in addition to savings for a down-payment on land.
This year, working at the same income level but with higher living costs, I am sobered by how pervasively my increased cost of living, after moving, imposes limitations on 1) how I pass time and 2) how often it can–or more accurately, cannot–involve spending money. It was not surprising, but knowing something intellectually is very different from knowing something experientially.
Below is a simple chart of my pre-moving budget, post-moving budget, and projected near-future budget. The near-future budget is a result of my recent reality check. Items are displayed as percentages of my paycheck.
|Pre-Move Budget||Post-Move Budget||Near-Future Budget|
|10% – Tithe/Donations||10% – Tithe/Donations||10% – Tithe/Donations|
|10% – Savings/Emergency||10% – Savings/Emergency||5% Health/Emergency|
|25% – Rent||38% – Rent||38% Rent|
|10% – Travel||10% – Travel||10% Travel|
|45% – Utilities, Groceries, Toiletries, Phone, Going Out/Eating Out, Household, Uber/Lyft, Etc./Misc.||32% – Utilities, Groceries, Toiletries, Phone, Going Out/Eating Out, Household, Uber/Lyft, Etc./Misc.||32% – Utilities, Groceries, Toiletries, Phone, Going Out/Eating Out, Household, Uber/Lyft, Etc./Misc.|
Tithe/Donations: Tithing is the practice of giving 10% of your “first fruits”, or earnings, to your religious body or to charity. Tithing reminds me, in my faith practice*, that all I have materially is from the Lord. So, when it’s all his to give and take to begin with, to give my “first fruit”of 10% is small. The percentage doesn’t budge when income or expenses change.
*It may not be obvious from my writing, but I am a practicing Christian. I use “practicing Christian” in the French manner of how a person might express her relationship to Catholicism in the now secularized though historically Catholic country of France: A Catholic person may say, Je suis catholique pratiquante, “I am a practicing Catholic.”; a Catholic person may say, Je suis catholique mais non pratiquante, “I am a non-practicing Catholic.”. For the latter, Catholicism is her family heritage/the culture she respects and in which she was raised, but she does not primarily order her life around its teachings. I am the former of the two, a practicing… non-Catholic :), or simply Protestant, and practice tithing.
Savings/Emergency > Health/Emergency & Savings: The deductible that I paid after my non-cosmetic medical procedure last year was a wake-up call. The numbers I had viewed as my Savings were in fact my health care deductible + out-of-pocket maximum + savings. Soon, I will be going to physical therapy for a joint injury, and the older we get the less well things bounce back. So, it’s worthwhile to take care if the issue now. It will cost though, from my budget. I now realize that each year, with my health care plan, a few thousand dollars or more of my Savings, may potentially become medical costs. Only savings, small S, will remain if that happens. That same savings, small S, is where I would draw the down-payment on land. Even as I write this, the realization of buying land at my current income level seems even further away. It reaffirms that I need to continue working on self-discipline, sticking to my budget, and paying off debt.
- Investigating Solutions: In my Near-Future Budget, I separate health care savings from savings to clarify where my savings are going. In fact, for my Near-Future Budget, I am looking into a Health Savings Account. From light research–don’t quote me–it will essentially be a savings account exclusively for “qualified medical expenses”, pre-tax. Whatever is unused will be rolled-over to the next year up to a maximum amount. It collects interest which is also un-taxed. When I reach retirement age, if I haven’t used it, I can use it for non-healthcare costs. I’m still learning about HSAs. You should learn too!
Rent: My rent takes up 13% more of my budget now than it did previously. I have 13% less funds to spend on all other expenses in my life. It makes me thankful that I have natural hair! That I don’t have a car! That I have an in-unit washer and dryer! That I have essentially abandoned investing in clothes that require dry-cleaning!
After years of turnover with either roommates or housing itself, and after prayer and heeding the still small voice within me, I turned down cheaper housing options before arriving at my current situation. I am not the go-get’em young twenty something I once was, ever eager to meet new people, learn new stories and just roll with it wherever, whenever, whatever and with whomever, if I can help it. After all the lessons I have learned from prior living arrangements, after meeting my [still awesome] roommates, I decided to sacrifice and choose a pricier place. Where I wake up and start my day and where I lay down to sleep holds that importance in this season.
Travel: Travel, otherwise known as the ability to get outta town, is quite important to me. The percentage for Travel matches that of Tithing and Savings. In the Near-Future Budget, it will be twice as much as savings and Health/Emergency respectively. I mean, I love it so much that I got ahead of myself in spending on it this year, and as a result, I won’t be going much of anywhere for the next FOUR months. Nope, not to Vermont either…
- Investigating Solutions: I am mulling over the challenge of traveling for family, for a college reunion, for a wedding, for a project-relevant conference, or simply for myself, and also regularly traveling to the “Brave Little State” of Vermont. Investing in new personal connections, getting to know the state, its opportunities for community, work, leisure, getting to know future neighbors, takes in-person interaction, time and presence there with some regularity. Even at a rate of once a quarter. I’ll write more about embodying H.E.R.E. in a future post; it will require me to continue physically rendering myself within the state lines of Vermont. Some ideas have crossed my path. I’m still researching and thinking through them. I hope to share more in the near future. Which for me is likely in three months. 🙂
The Rest: I feel the squeeze of the 13% Rent increase in all other areas of spending. Food is my greatest struggle: responsibly managing going out, eating out, and meal preparation for the week. Laziness keeps me from waking up in time to make my breakfast or properly pack my lunch. Fitting-in leads me to buy a drink a can’t afford, when I am actually hungry, because everyone else is buying one. And honestly, a sense of embarrassment about voicing that I won’t buy–can’t buy–has led me to say Yes to eating out multiple times when I don’t have it. Having lived beyond my means, it will take near austerity measures, compared to last year, to return to living within my means. That burden will be felt poignantly in this category for the next few months… Lesson learned.
- Investigating Solutions: 1) I need a grocery plan. Every single week. I need to take time to research recipes with $ ingredients (as opposed to $$ or $$$ ingredients), simple directions, and intriguing tastes. If it does not taste good, I become very tempted to buy, or I just don’t eat it. 2) I need to limit eating out to eating out with others. Two birds. One stone. Seeing people usually involves food or beverage consumption. I can reserve my eating out budget for social meals. 3) I can invite friends over for dinner to share my inexpensive yummy food with me! It’s more affordable than eating out. 4) I need to say No, to myself and kindly to others, when I don’t have it in my budget. I can nurse a water or ginger-ale at a bar. I may order the cheapest appetizer on the menu at the restaurant as my meal. I may be awkward and not eat at the restaurant at all while others do (during the season of austerity); I can eat before or eat after at home. Or, maybe I decline going out. Maybe next month! I’ll put it in my budget. And that’s OK.
Major Reflection: I find saving with sights on homeownership to be challenging. Even as I find it challenging, I think of other renters who have more debt and more expenses than my short, single-person-with-no-dependents list. I think of the status quo for net worth of households of color, black households–not all–in areas like Greater Boston specifically. I think of those statistics. Black homeownership and generational wealth… It’s a lot. It’s a long journey for us as a collective group. May we be inspired, dare to imagine and know hope, perseverance, self-discipline, partnership and joy along the way.
Financial realities knocked me sideways, but as I remember lounging on my checkered picnic blanket looking out at Lake Champlain, the sun receding behind rolling New England “hills” ;), the memory is also an incentive to keep going. To keep my stride in that direction of “the stars” or homeownership. The horizon feels far when crunching numbers, but I can still see it. I’m excited at how the future will continue to unfold as I pursue it. So many opportunities have already been born along the way. That Friday, I brought reading materials and my journal as activities to keep me occupied in the park. I really just ended up watching the sunset, listening, and swatting a couple iridescent beetles from my sweat-salted skin, cooled by the rush of a light breeze. It was enough.
Peace. More to come.
Copyright © 2019 A.M. Wilsonne