What do you do when budgeting feels like two steps forward, one step back? Michelle shares her recent experiences “going over budget” and what that taught her about her values and mindset!

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INTRO: [00:00:00] Hello. And welcome to the Young Scrappy Money podcast. I’m your host, Michelle Waymire. And each week, I’ll be bringing you tips and tricks to help you take control of your finances as well as interviews with people who made big financial changes in their own lives. So join us. And we’ll help you get your financial s**t together. 

MICHELLE: Hello, everybody. Welcome, welcome to another episode of the Young Scrappy Money podcast. You might’ve noticed that last Friday we did not have a new episode. So I apologize for that. But I do not lie when I say that things have been a little bit chaotic over here in my world.

I mentioned a couple of times— especially if you’re following my newsletter, you might know this— that, at the beginning of the month, at the beginning of August, I took about a week and a half to travel through California. I stayed with old friends. I did a bunch of sightseeing. I met with clients. It was an absolute delight. I had a great time, ate some really good food, saw people I care about deeply, and just generally, uh, relaxed a little bit.

So the other thing that has been going on, I mentioned that we did buy a house. And that has really taken up the other portion of my time. You do not even understand how much trim the average house contains, how many windows a house has, until you go through, and you try and paint ’em all.

So to be perfectly honest, I have been covered in sweat and paint for about two weeks now just trying to get everything in order so that we can actually move in by the end of September. It’s a pretty exciting process. But it’s also very time-consuming. And it’s also very tiring.

So I apologize that the usual podcast train has not quite been leaving the station as it should. One other thing that’s been kind of interesting in my world recently is that, as a result of these home improvement projects, as a result of this trip to California and just kind of being really busy and a little bit stressed out, if I’m being perfectly honest, I actually went way over on my budget in August. News flash, I’m human. Many advisors and coaches are. Uh, some of them aren’t. But we won’t get to that here. 

As a result, I found a need to go back and revisit my budget and a do a little bit of cleanup work and a little bit of, uh, you know, yeah, cleanup work. That’s the right word for it. So this episode is coming from a place of vulnerability, to say, hey, I’m human just like everybody else. I totally make budget mistakes. I totally go over budget. 

And honestly, the world didn’t end. Nothing was terrible. But it meant that I had a little bit of work to do going forward to make sure that this didn’t happen again. So I thought I would devote an episode to my process on how I handle the situation when I do go over on my budget. A lot of you might struggle with this. 

And we’ve talked before that there are a lot of activities that are just challenging for folks, anything that’s behavior change related— trying to implement a new exercise regimen, trying to swap out some eating habits, trying to save money or spend less money. All of those activities kind of fall in the same bucket of behavior change. We tend to approach behavior change as an all-or-nothing phenomenon. 

We’re either total, total rock stars. We’re crushing it in every aspect of that behavior. Or we feel like things have gone off the rails, and everything is ruined. And so we might as well just not work out for two weeks. Or we might as well just go ahead and buy our entire Amazon shopping cart that we’ve been putting off for later. You get the idea. 

We’re all-or-nothing. So we’re either doing great, or we’re doing terrible. As a result, it can be really hard to bounce back when you feel like you’ve made some bad decisions. We’re pretty good at setting the reset button. But usually that reset button means a lot of work. And for some of us, we might put off the reset button. 

Because we remember how good it feels to spend freely. It doesn’t matter if you’re dipping into your savings. It doesn’t matter if you’re putting money back on a credit card. It’s hard to think about the long-term implications of our behaviors when we’re in that place, when we’re in that moment of spending the way that we know we don’t want to. It’s hard to prioritize our long-term goals. 

[00:04:52] I was definitely in this place too when I was in California and when I’m thinking about home improvement projects. And I think California is a great example of this. Because, to be perfectly honest, I did budget for this trip. I had been saving for a couple of months. I paid for my ticket in SkyMiles. I did nothing but couch surf. And I had a little bit of money saved up as spending money for the trip. 

So it’s not like I went into this completely blind. It’s not like I was ready to blow my budget from the get-go. Like I thought I was gonna be pretty good. I thought it was gonna be fine in terms of sticking to my— my spending guardrails. 

However, I decided to make a couple of changes on that trip that resulted in spending extra money that I thought were totally worth it. And likewise, as we’re going through our home improvement projects list, there are some things that are just a heck of a lot easier to do before you move in— specifically flooring. It’s easier to install new floors if you don’t have a whole bunch of furniture and a bunch of crap everywhere. 

So we kind of made the informed decision to move forward on some of these projects and figure out the money side of it. So it’s not like this was super ample premeditated spending. But to some extent, it was. 

So all that to say, it was time for me to get back on track after making those types of decisions. The process I used was really three steps. First, I needed to go back and review my numbers. Second, I need to figure out where that money is coming from. So if I overspent, how am I gonna compensate for it? And three, I need to set intentions for going forward. 

So I wanna walk through more specifically what that process looked like for me and how I approached getting my spending back on track. Like I mentioned, the first step was going back and reviewing my numbers, figuring out what it is that I spent and why. I went through my debit card statement. 

Most of the things came from my weekly allowance, so there was no problem there. That was money that I’d already earmarked for vacations, that I’d already earmarked for other things. So I don’t really need to go back and figure out where that money is going because that’s kind of already allowed to be spending money. 

The real culprit for me was my credit card. I spent way too much on my credit card in California. And so I went back, and I pulled my statements. Uh, my statements usually hit mid-month. So I kinda started looking back in mid-July. And then I read through the mid-August and then looked at the last like week or so as well that I had, um, in recent activity. That wasn’t necessarily a statement that had already hit yet. 

So I went through in a good, old-fashioned Excel spreadsheet every single line item that I had spent. And for me, I was actually really surprised. There were some things on here that I saw that were totally worth it. 

For example, when I was in California, my friend and I decided that we were gonna go to Disneyland for a day. This is my favorite place in the entire world. I love Disney theme parks. I can’t help it. I’m just totally a kid when it comes to this stuff. So we made the decision I was going to purchase tickets to Disney, which I did.

Because Los Angeles is pretty far from Anaheim geographically speaking, it’s not easy to take a train or public transportation to get there. So I decided, just for that one day, I was going to rent a car. Um, so that was like another 80 bucks. And then I sprung for a meal at the park in one of the nicer restaurants. That was like another 35 bucks. 

So just this one trip, this one little like day trip— Disneyland, car rental, and that restaurant— that was $280 that I had not anticipated spending on this trip necessarily, that was way outside of the original budget and savings that I had set for myself. But when I look back on it, if I’m being totally honest, it was 110% worth it. I do not regret that spending at all. We had an absolute blast. It was awesome.

So you’re gonna find things like that on your list— where you look at it, and you think, OK, sweet, like this is— this is totally fine. I’m gonna make the money work. I’m glad I did this. Looking back at my list, there were another couple of items that I really regretted. 

When I was in San Francisco, I decided that I was going to take myself on an adventure day. So I started out, and I met my friend for work. He works at Twitch, which was awesome. So I got free lunch in the Twitch cafeteria. That was totally rad. 

I took a trolley down to, uh, Fisherman’s Wharf and kind of walked around. I walked up to Ghirardelli Square, and I bought a sundae. Then I decided I wanted to go to the Disney Family Museum. This is a little bit of a jaunt. So Disney Family Museum is like four miles away, not within walking distance. 

[00:09:56] And I really didn’t plan my time well. So I had about two and a half hours to get to the museum before it closed and see it all. I decided I was gonna take a Lyft from the Ghirardelli Square to the Disney Family Museum. So I did that. That was like 20 bucks. 

I went to the Disney Family Museum, which was 25 bucks for entry fee. That was totally worth it— awesome museum. If you’re a Disney nerd like I am, definitely go check it out. It’s in the Presidio part of San Francisco. 10 out of 10, would recommend. 

Here is where my day went wrong. I did not charge my phone adequately before going. My phone died while I was leaving the museum. I had to hike out of the Presidio. I went to an OfficeMax, where I bought an expensive phone charger that was pre-charged battery. To be fair, I probably needed to do this at some point because I am a chronic forgetter of phone chargers. 

And then I took a Lyft home after the Disney museum. So this whole day of Ghirardelli Square, Lyft to the Disney museum, Disney museum, phone charger, and Lyft home was just over 100 bucks. And there were parts of this that I totally don’t regret. So 25 bucks museum entry was great. 

But then there was like 75 bucks in there that was transit that I had to pay for because I didn’t plan ahead. There was the phone charger because I didn’t plan ahead. And then I bought a sundae at Ghirardelli Square, which was pretty tasty. But it was $13, and also I’m lactose intolerant. And that was probably a bad decision. 

So out of that day’s worth of spending, there’s really only $25 that I felt really good about. And sometimes there’s not a lot you can do. I mean, on vacation you don’t always have time to make the optimal decision when it comes to transit. So I’m trying to forgive myself a little bit there and cut myself some slack. 

But the fact remains that, you know, there’s a good chunk of change in there that I would have done totally differently. That’s money that I would have spent differently. Once I looked at the rest of my California list, it looked like a lot of it was food. 

I ate an extremely good sandwich. I got some awesome tapas. We went out for good Italian food. I bought some artisanal coffees here and there. Those purchases for me were also totally worth it. I had to take a couple of airport Lyft rides because I got in at weird hours. 

All in all, I spent about $800 over budget on my trip to California. So that’s money that I know, after doing the math, that I have to pull from somewhere else. I also looked back through my credit card, and I found a couple of big purchases for home improvement items. I put those in a separate bucket. 

And then there was a couple of purchases that I made last month that were more like strategic self-care purchases. So I made the decision to go to a retreat in January that’s gonna be in Arizona for financial coaches. That is an investment in my career and in myself. And so even though the timing wasn’t great— normally, I wouldn’t have made that type of purchase in the same month as a big trip— that’s when the fee was due. So I went ahead and signed up for that. 

And then I also made the decision to hire a personal trainer starting in September. I have always struggled with work-life balance. I tend to work a lot. And I’m coming to the conclusion that if I’m not doing a good job of prioritizing my health, then this is not gonna be sustainable for me. 

So the retreat and the personal trainer were kind of a nod at that conscious decision to make some other changes. Are there ways that I could’ve done that cheaper? Sure. Are there ways that I could’ve avoided those purchases? Absolutely. But going back through my spending, going back and reviewing my numbers, I don’t regret those at all. 

The last little category of spending items came because I had done so much moving money around, and I felt like I didn’t have good certainty about where things were. And so there were a couple of times I put gas on my credit card. There was a parking fee that I put on my credit card and then just like a couple of little items here and there. That was only about 100 bucks total. 

But it was important for me to know that, because I was not feeling confident in where my money was going, it was leading me to put things on a credit card out of a scarcity mindset. I was making decisions that I wouldn’t normally make— that normally I could just afford out of my weekly allowance, no problem. But I was getting nervous about it for some reason.

So I went through. I looked at all my numbers. I kind of bucketed them into categories, so the California category, home improvements, personal improvement. And then we’ll call this the disorganization fund, so the items that I put on a credit card just because I felt disorganized and wasn’t sure how to pay for them. 

[00:15:00] And I looked back, and I realized that there were definitely some areas where I could afford to make improvements. There were things that I would do differently. But then there was also a good chunk of spending that legitimately brought me joy, or was worth it, or was a conscious decision to spend that money. 

So I felt pretty good once I looked at those numbers. It was more on a credit card than I wanted. But I don’t feel like it was all, uh, terrible. So then, now that I had my numbers all laid out, it’s my job now to figure out where that money can come from. So if I have to pay off this credit card, how am I gonna do it? 

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MICHELLE: If you went through this exercise, and it turned out that a lot of your spending came from a debit card already, chances are you’re probably fine. If you’re just pulling from your weekly allowance, no worries there. If you transferred money over from your savings goals, you’ve kind of already done that. So the only thing that you’ll need to watch out for, if you’ve got a bill pay account, and you’re pulling money out of that bill pay account to spend, you might have to pull money for bills somewhere else. So be super careful of that. 

But if you’ve just been kind of drawing down savings accounts or weekly allowance, then your work is kind of figuring out, going forward, if you need to compensate for those savings goals at all. If it is money that you’ve put on a credit card, your job, and my job was, to figure out how you wanna pay that down. So my first thing that I did is I went through my various savings goals, and I looked at all of the buckets of money that I have saved. 

We’ve mentioned before, or I’ve mentioned before, that separate savings goals in separate savings accounts is the best way that I have found personally to keep things on track. That is super helpful for me. And so that’s how I handle things. 

And so I had a savings account for home improvement purchases. I had a savings account for emergencies. I had a savings account for, um, other little items here and there and one for specifically like work changes and improvements. So I went through my buckets, and I tried to map my categories onto the savings goals that I had already saved for and just see how much money I could pull from savings safely without having to carry a balance on this card. Because my goal was to— to not carry a balance. 

So for the California trip, I pulled $800 from my fund that was going to pay for my new room in my new house. So I wanted to put together this like sweet bedroom and office. And I had some money earmarked for it. Um, I decided, because I overspent in California, I don’t get to do that anymore— which totally sucks. I was looking forward to like picking out new bedroom furniture and all that good stuff. 

But at this point, it’s far more worth it to me to delay that goal, delay the design of my new room, until I can get myself to a better cash place and make sure that I’m not carrying credit card debt from this trip. So pretty much all of my California money came from that savings goal. There was a little bit of money left over, like 30 bucks or so, that needed to come from somewhere else. And I pulled that from this week’s weekly allowance. So I figure I’ll spend a little bit less this week in order to kind of clean up some stuff that happened previously. 

The next bucket was home improvement items. Luckily, I did have a savings account for that. And so that one, that set of expenses, was totally fine. For my training retreat and my personal trainer, um, I pulled those from my personal improvement and like work changes fund. So I was not happy at how much I had to pull out for that. 

It really only left me with a few hundred bucks left for that goal, which I was not super pleased about. But I know that I will be excited when I go to that retreat. And I know that now it’s completely paid for, and that’s very satisfying. So we’re gonna call that a win as well. 

And then the last little bit of money, this was a little bit harder to come up with, so like the gas and parking and other little bits. I wasn’t super sure where to pull this from. Um, I had kind of tapped out some of my other funds, uh, making those other changes for home improvement and personal improvement stuff. So that last 100 bucks I also decided to pull from a savings goal. 

So luckily for me, I was able to go back through my savings and pay down the card completely without having to carry a balance. I definitely need to make sure that I’m prioritizing those savings goals more going forward. Because I did pull a good bit of money out to make this stuff happen. Um, so if you decide to go this— you know, go this route, good for you. 

[00:20:01] If you’re in a place where you’re not quite able to pay everything off— or you’re at a place where maybe you already were carrying a balance, and you ran up the card a little bit more— I would say, figure out how much extra you need to adjust and change your budget a little bit going forward. So for example, if you put $1,000 on a credit card that you weren’t quite ready for, you might decide over the next few months you’re going to take an extra $200 out of your budget, and you’re gonna put it towards that card. So keep in mind you should be already making minimum payments anyway. 

But this way, you are handling that situation without completely overhauling. I’ll point back to the idea of behavior change as a reason why you don’t want to get into a boom-or-bust cyle with it. Making sure that, sure, you wanna pay that card off quickly. 

But don’t get yourself in a place where you’re so busy trying to only pay off that one card to make up for your past sins or, you know— they’re not really sins. But you know what I mean. We kind of perceive them that way sometimes. Making up for the past behavior that maybe you’re not super proud of. 

At that point, you don’t wanna get yourself in a situation where you’re cutting out your future spending so much that you’re creating the situation of scarcity again. Because when you get yourself in that situation of scarcity, that’s when things become so stressful and so overwhelming that we tend to go on spending binges again and break out the credit card. So introduce a little moderation if you can. 

Know that maybe you weren’t totally pleased with all of your spending choices. Maybe it’s going to delay your debt timeline just a little bit. Adjust your budget if you can. But don’t spend a lot of time beating yourself up over it and getting yourself to a place where your budget’s no longer sustainable for you. 

So you’ve reviewed your numbers. You’ve figured out where the money is coming from. The third thing that I did, and that I recommend you do as well, is to set intentions for going forward. So how do you want your spending and behavior to change? How do you wanna get back on track? 

For me, this is clarity about my spending. I wanna make sure that if I am making a decision to put something on a credit card, I am pulling from a savings goal in that moment and making sure that I am truly only spending on things that I have money for. And if I don’t have the money for it, then that’s a sign for me that I need to not spend it. Because I know that I’ve spent a lot of money on my goals, or rather because I know that I have taken money from a lot of my goal bucket accounts, it’s really important for me to make sure that I’m sticking to stuff going forward, that I’m really sticking to my weekly allowance. 

Another common thread that I’ve noticed when I was reviewing my spending is that lack of poor planning was really expensive for me. So any situation where I ran out of time and had to take a Lyft, any situation where I had to buy an expensive phone charger or eat out when I didn’t plan ahead to pack my food accordingly, those were all expenses for me. So if I wanna stick to my allowance, it means that I have to do a little bit better about planning ahead, making sure that my transportation’s good to go, that my food choices are good to go. 

And that way, that I’m not needing to sort of spend what feels like emergency money on things that don’t really bring me joy in that moment. So those are my two ways of really getting back on track is having perfect clarity about where my money’s going, no more avoidance, no more hiding from credit card statements, and making sure that I’m planning ahead to avoid expenses that I don’t have to pay for. So how are you gonna get back on track? 

Set your intentions. Figure out kind of where your budget went wrong. See whether there are any things you can do in the future to prevent that kind of thing. Maybe it’s figuring out some alternative ways to avoid emotional spending. Maybe it’s delinking your credit card from your Amazon account. Whatever that looks like for you, figure out how you’re going to adjust your behavior and your spending going forward so that you’re not in this situation again. 

So that’s it. I hope you found that helpful. I know we’ve all been in a situation where we felt like we’ve really, you know, messed it up on our budgets, allowed the s**t to hit the budgetary fan, so to speak. But I will tell you from personal experience this month, it is not something that’s impossible to overcome. Everybody makes mistakes. 

[00:24:30] And so the best that you can do is really give yourself the knowledge that you need to get back on track and make some better choices going forward. So thank you so much for listening. I hope you have an abundant weekend and that you stick to all of the goals that you set for yourself.

END CREDITS: I hope you enjoyed this episode of the Young Scrappy Money podcast. If you want to read about my work as a financial advisor and financial coach, you can do so at www.youngandscrappy.com. That’s www.youngandscrappy.com. Thanks again for listening.

Made with love by Jesse in Atlanta. [SMOOCHING SOUND]

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