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Totally Worth It, Week 3: Spend less money

Illustration of a hand putting a coin in a piggy bank amid piles of treasures within a cave.
(Jackson Gibbs / For The Times)
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You’ve started a budget now and have a couple of weeks under your belt. Great! At some point, you might have come to the sinking realization that, after including your bills, debt payments, fun money, goals, savings ... the amount coming in was less than what was going out.

You’re not alone. Nearly two-thirds of Americans live paycheck to paycheck, as reported in a recent survey cited by CNBC. And according to the American Bankers Assn., roughly half of active card accounts carry credit card debt from month to month (i.e., the balance is not paid in full each month).

When income and outflow are unequal, you have two options: Make more or spend less. The job market has been hot. If you feel you’re underpaid, it’s a great time to scout out a new opportunity or negotiate at your current job. You can also look into getting a second job or side gig — L.A. Times freelance writer Kathy Kristof runs a guide to some of the more popular options at SideHusl.com.

But sometimes, you just need to spend less.

When I started budgeting, I realized there were shockingly few categories for me to move money from if I overspent. As we discussed, you can’t really go to the electric company or your landlord and say, “Things are a little tight for me this month, so I’m just going to spend less on my electric bill and the rent.”

Here are some ideas for cutting back or cutting entirely.

With this eight-week newsletter course from the Los Angeles Times, assistant editor Jessica Roy will help you get a handle on your money stuff.

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Taking stock of your expenses: What can you cut?

One of the biggest changes budgeting made in my life was that it forced me to stop spending money on crap I didn’t really care about. Take a good, hard look at your monthly fixed expenses, those recurring costs that stay the same. Are you really watching all five of the streaming services you’re subscribed to? Or could you cancel one for a few months until the show you like comes back? Are you really using that meditation or language-learning or yoga app you pay $6 a month for? Those dollars add up. Don’t spend money that gets you nothing in return.

Now let’s look at our variable categories that have flexibility to be reduced. You probably can’t spend less on gas getting to and from work. But what about food, or clothes, or video games? We’ve already talked about embracing reality in our budgets. But there are probably some places to cut back.

When my husband and I got serious about paying down our debt, I quickly, horribly realized how much we were throwing away on going out to eat. We both had long commutes that got us home after 7 p.m. Neither of us were particularly motivated to make a meal from scratch at that point, so on an alarmingly regular basis, we’d order pizza or go to our neighborhood sushi place. These weren’t “date nights” where we were having a great time and savoring every bite. We were just getting food into the food hole as expediently as possible.

Previously, I had been opposed to most “quick” meals on principle. I’m a decent cook, and I can whip together something a whole lot healthier and tastier than a frozen premade fried rice if I have the time and inclination. But if I get home at 7:30 on a Tuesday, I have no time or inclination. So I invested in the Trader Joe’s freezer section.

I also cut back on my weakness — buying books — by getting an L.A. Public Library card. I use the Libby app to borrow ebooks. I also use the free New York Times subscription. I borrowed books from friends or bought used ones online instead of new.

I can’t tell you what your budget BFFs will be. Mine are the Trader Joe’s freezer section and the library. I didn’t stop going out to eat or stop reading. I just stopped spending more on doing that stuff than I had to. When my husband and I went out to eat, we went somewhere new and fun and we enjoyed ourselves. When I did invest in a brand-new hardcover, I relished it, instead of throwing it onto the to-read pile with half a dozen others.

Budgeting made me more conscientious about what I was spending my money on, which made me enjoy it more when I did.

What about impulse buys and spontaneity and fun?

Budgeting doesn’t mean you aren’t allowed to have fun. I gave a presentation about the topics in this newsletter to a group of L.A. Times interns. At the end, one of them raised their hand and said, “But what if I want to be a fun person who can do spontaneous things?”

I realize that writing a multipart newsletter about personal finance somewhat contradicts this, but I am a fun person. I love going out to eat and trying overpriced cocktail bars and singing karaoke and wandering the Las Vegas Strip in a dress I bought that afternoon from Forever 21 with a yard-long frozen drink in my hand. How do you think I got into so much debt in the first place? It wasn’t by not being fun.

What budgeting taught me to do was to prioritize. If you want space in your budget to say yes to a last-minute trip to a spa or Sephora or Mexico, make a line for “fun stuff” and put money in it. You probably can’t afford all of those things, but you can probably find a way to afford the one you want the most.

Another intern said they spent a lot of money buying things they saw on TikTok. That’s fine! Know thyself. Have a line item for “TikTok buys” and check that you have money left in that category before you spend it.

That’s really the trick: taking that minute of money mindfulness to say, “Yeah, I want this, but can I afford it? Let me check my budget real quick.” Some personal finance people recommend putting things in your cart and waiting seven days before spending any money. I think if you’ve budgeted properly, you don’t necessarily need to wait a week. But you do need to wait long enough to see whether your “TikTok buys” category has enough in it for new fairy lights.

How do I say no to fun things?

Sometimes you are going to check your fun money category and discover there is not enough for a tiny vacuum for crumbs, or for Tulum. Even the most diligent budgeter cannot possibly say yes to every fun thing all the time.

One thing to remember: Your friends are probably broke too. If they suggest going out tonight and you say, “That sounds super-fun, but I’m actually trying to save money and knock out my student loans right now,” more often than not, they’re going to respond, “Yikes, I should really be doing that too.” Remember, what you’re seeing on Instagram is other people’s highlight reel, not reality. Your friends who are constantly on vacation or driving new cars or showing off shopping hauls are not way smarter or better at budgeting than you. They either have a trust fund, serious credit card debt, or both. Or they’ve organized their priorities differently.

If they want to get together and you can’t afford what they want to do, suggest something else fun! My road to financial freedom was paved with board game nights and splitting delivery pizza and cheap wine. I still went on vacation, but I stayed at a cheap hotel and Ubered to the expensive Airbnb during the day, or asked if anyone wanted to share a room. I was the person who showed up with a box of Clif bars and a six-pack of Diet Cokes in my suitcase to have as a snack or backup breakfast. If you want to go all out on accommodations, take the earliest, cheapest flight.

This word is coming up again: priorities.

If you really want the tiny crumb vacuum you saw on TikTok (it would make cleaning your desk go so much faster, probably), you have to move that money from somewhere else. Can you spend less on going out to eat this month? You’ve been saving up for a PS5 — do you want to push that goal back by another month for this? Can you take it from your “new wardrobe for school this fall” fund? I can’t answer those questions for you. It’s your call.

Your money is finite. Your choices are not.

Things still aren’t adding up. Now what?

I know that what I talk about in this newsletter won’t — can’t — possibly be applicable to everyone in every financial position. If you are absolutely drowning in debt and housing costs and your income doesn’t even cover your necessities, you’re probably not wondering how to move money around to have wiggle room for Sephora. Being money-conscious doesn’t fix income inequality and low wages and predatory debt in the United States.

The power of personal finance only goes so far. But taking a hard look at your finances at least puts you back in the driver’s seat. Knowing you can’t pay your bills is better than guessing you maybe can’t pay them and running up credit card bills.

Next week, we’ll talk about starting up an emergency fund, and after that, we’ll tackle paying down debt. I know this stuff can be stressful and hard. It’s a lot easier to live in relative ignorance about your finances and just assume you’ll figure it all out someday. Well, someday is now.

See you soon.

— Jessica

P.S.

This newsletter is free. But making it is not. Totally Worth It won’t have any sales pitches for specific financial products — i.e., I’ll never tell you that you need to buy this specific software or open an account with this specific bank. My only sales pitch is this one: If you aren’t already, please consider subscribing to the Los Angeles Times. For a budget-friendly $1, you can try it out for a limited time.

If you have questions, email worthit@latimes.com. And to ensure you get this newsletter, please add this email address to your contacts or address book. Thanks.


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