Good Money, Bad Money, No Money At All

I’ve been thinking a lot about money lately. Mostly how I’d like to save more of it and how I can go about doing so. I want to go on a vacation with Chris and I want to be able to start my own business. I’d also like to look at my savings account and not be startled and sure there’s been some sort of error. Also, the webinar I did with Jenny Blake of Life After College got me thinking about paychecks and savings. Basically, it’s been a money-filled few weeks. Jenny talked about how she saved up enough money to live on for six months and then quit her job to take a risk on starting her own business. She accepted the fact that she might have to blow six months worth of savings, and if she was still not making money she’d have to re-enter the 9-5 work force. Luckily, she didn’t have to. I think that’s so brave and so bad ass, but it also seems impossible. I basically live paycheck to paycheck, and slowly add to my savings account each month. I’m okay with this, but hearing Jenny’s story got me wondering whether I should re-think my spending.

I’ve realized there is good spending and bad spending. When you’re a college student, money is just money. You don’t have a lot of it and that’s expected. You buy your dollar pitchers at the campus bar, you buy your Taco Bell, you buy your coffee, you buy books, and that’s about it. There is no thought of vacations or saving to start a business or anything like that. At least for me there wasn’t.

Now that I’m making (and spending) a salary, I know that there really is smart money and not-so-smart money aka good spending and bad spending. What I mean by this is there are times when you spend your money and feel completely satisfied afterwards, and there are times when you spend your money and afterward you think, “Where did all my money go? What did I even buy? How am I so poor?” I want to try to get myself away from the “Where did it all GO!? When is the next pay day?” and more towards the “Yeah I spent that, but it was worth it and I know exactly how I spent it.” Here are a few different examples of good spending versus bad spending.

Smart ways to spend:

-Buying high-quality clothes for work

– Buying a train ticket to go see a friend

– Buying concert tickets to see your favorite band

-Paying for yoga classes or guitar lessons

Experiences and things that allow you to keep building your post-college identity are smart uses of your money. A gym membership may cost you $40 a month, but if you’re meeting people, getting in shape, relaxing, and finding a hobby you enjoy, it’s worth it. Building friendships and spending quality time with people you love is always a good use of time and money. You’ll feel great afterwards and you’ll have memories even after the trip is longer over. Clothes may not seem like a great investment, but if they help you shape your professional image and appearance then it’s money well spent.

Not-so-smart ways to spend:

– Blowing stupid cash every time you go in to Target. I don’t know about you, but I’ll walk in to that store to buy a Swiffer, some toilet paper, and mascara and I’ll walk out with three shirts, a new magazine, a shake weight, and nothing I came for. Bad spending in full effect.

– Buying a round for everyone at the bar. Everyone likes to be the guy who buys a drink for all of your co-workers. But when you’re checking your bank account the next day and you’re $70 lighter…not a great idea. Do it once or twice, don’t offer it up every time you see an empty glass every night of the weekend. Be generous, not foolish.

– Going out to eat every night. Believe me, I do not love cooking. I’m not great at it and I’m pretty lazy when I come home from work. But when I started realizing how much money I was spending at restaurants, my kitchen began looking pretty good. Going out to eat is fun and not something you should cut out of your routine. But be aware of how often you’re going out and what you’re ordering when you go. Three martinis, an appetizer and an entrée? What about a glass of water and skipping the app? Reducing your dining-out habit by even a night or two will make a huge difference. I’ve also started making lunch for myself, and I’ve found that that’s really helped my money situation. It’s also good in the winter when I don’t feel like venturing out in the cold to forage for food.

Things that you’ll buy and quickly forget about are not good uses of cash. You’ll eat them, drink them, or use them in ten minutes, and then regret the money you could have saved or spent on something more worthwhile. Also, small items that don’t seem like much but add up quickly are a serious danger to your checking account. Food, little odds and ends, and drinks each cost a small price when you’re swiping for them, but can end up doing damage when they’re added together. To cut back on this, try paying for things only using cash. You’re more aware of how much you’re spending and where you’re spending it. Make lunch or dinner as often as you can, and if you go out to eat order only one fancy drink instead of three.

How are you working on treating your savings account a little better? Any tips I’m missing? 

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  1. Lauren,

    This one is a big thing for me.

    The sad thing Is I thought I wasn’t a money spender. I don’t buy stuff, pretty much ever. I eat in most days of the week. Yet still I was trying to figure out how the hell I was spending so much money while I was in-between jobs.

    I’m one of those people where hospitality is ingrained in how I was raised… so any time I go out with people (male or female) I like treating them as much as I can.

    I’m just as likely to buy a male friend a beer as I am a female date dinner. I just like treating people.

    needless to say $90 restaurant checks and $75 at bars will screw you pretty fast. Gonna have to stop taking care of my friends so much.. hahah

    And I totally agree with your ideas about wise-use of money.. I pretty much only make investments with my money, except for the aforementioned sins of fine-dining and bars. I like paying for stuff that has a good ROI memories-wise. Concerts, learning a skill, or traveling — almost always produce a good return for your money rather than buying stuff.

    Or I invest in a course that Is going to financially make big returns later.

    Ramit sethi wrote a lot of good stuff on conscious spending if you get a chance to read his book too.


  2. Lauren — I love this post! First, thank you so much for the kind words and wonderful mention. Second, I think it’s fantastic how you broke out ways to spend smartly on what really matters to you (three cheers for making yoga a priority!). Even though it may seem far away, you WILL find your financial footing soon, especially by putting into practice everything you outlined in this post. Rooting you on!

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