About this series: Welcome to Scrimp City—an anonymous, week-in-the-life chronicle that provides a look at women who are trying to be smarter about money, whether that means saving more, spending strategically, or just being more comfortable managing their hard-earned cash.
In each installment, we follow one woman’s progress toward a money goal or challenge they’ve set for themselves. We learn about their typical spending/saving habits and see if, after their self-imposed money challenge, they come away feeling just a *little* more financially-savvy.
Meet Our Saver
At face value, creating a budget is just a matter of simple arithmetic. There’s money coming in, money going out, and the former should always be higher than the latter. Of course, it’s never that simple. What can seem like a necessity to one person can be a total splurge for another. Things get more complicated, too, when your relationship to money is, well, also complicated.
For instance, say you grew up in a household where money was always tight—and you knew it—even as a child. Later, in your teens, you become hyper-focused on budgeting everything so you don’t overspend. You then take your love of numbers and turn it into a career as a math teacher who makes it a point to teach students about credit card APRs. (Read the fine print, you say!) At home, you take on the task of managing the finances for your family of four. (Balancing a checkbook is a cakewalk for someone like you!) Everything is going smoothly under your watch, until you find yourself on medical leave and decide it’s time to transition careers altogether.
How, then, do you go from living in a two-income household to just one? How do you do so without feeling like you’re back at the beginning, where scrutinizing every purchase was emotionally draining?
That’s exactly the situation the 32-year-old math teacher featured in this edition of Scrimp City is going through. As the child of immigrants, she noticed early on how her mother struggled to make ends meet. Today, as she works on adjusting her family’s budget amid a lot of changes, she’s learning how money can bring up a lot of deeply buried and complex emotions.
Here’s how she’s rewiring her money relationship while keeping her family financially on track.
Quick Bio:
Job title:Math teacher*
(Currently on medical leave)
Age:32
Location: Los Angeles, CA
Monthly salary:$10,983.46
(Of that, $8,373.46 comes from my husband’s salary and the rest is what I receive while on medical leave.)
Monthly rent:$1,400
Housing arrangements:I live with my husband and two children.
Total monthly fixed expenses: $5,966
Total debt:$17,000
My debt mostly comes from my student loans, ($12,000 from my studies and $5,000 from my husband’s.)
How to sum up me + money:
It’s unfortunate, but if I’m being honest, I carry with me the pain of being raised by a single mother who struggled to remain a homeowner while providing for three children. I still can hear my mother advising us to enjoy money “while we had it.” It was understood that the rug could be pulled from under our feet at any moment. As a result, I’ve always saved money. I’d even save the small allowance my grandfather would give me as a kid. I’d promise myself to not spend it frivolously. Looking back, I realize I was just afraid to struggle in the way my mother did.
Of course, I’m not a child anymore! But I’m learning that family patterns are hard to break. You see, I’ve had a pretty stable and well-paying job as a teacher in Los Angeles (though I miss the higher pay in New York!). For years I’ve been the breadwinner in the family, but recently my husband got a six-figure-paying job. It’s great news—especially since our financial situation has quickly changed.
Since going on medical leave from work, I’ve reflected a lot on what kind of lifestyle I want. The biggest revelation has been my decision to learn how to code! (So I can hopefully earn just as much as my husband!) We’ve discussed us living off his income once my medical leave pay ends and decided we can give ourselves a two-year window for me to transition careers.
How I got here and why I’m trying to save
How I’ve handled my finances in the past:
Even as a teenager, I was committed to not paying interest. When I got my first credit card at 18, Ialways paid my balance off in full. When I purchased my first car, I took out a 7-year car loan and paid everything off within one year. But I still remember how I had to pay $1,166 in interest!
Also (don’t judge me) but I walked away from a full scholarship as an undergraduate student so I could attend New York University. It was costly decision, for sure, and one that I wouldn’t have been able to make without my mother’s sacrifice. My mom ended up paying $100k towards my undergrad education by refinancing her home and I took out another $30k in student loans. I avoided the same situation when it came time for my master’s. (Thank you Math for America for the full scholarship!)
Of the students loans I did take out, $18k were cancelled because of my working as a teacher! If I continue working for one more year in the same field, my student loans would be completely forgiven. But I am hesitant to do so because of health reasons I won’t go into.
Generally-speaking, I’ve moved from extremes on the money scale, going from extreme saving and doing what I thought was responsible to being care free and living in the moment. This has resulted in periods where I saved a lot of money and then spending savings to travel. Before having children, I would contribute automatically to my 401k plan but haven’t done so since I had my children.
My current spending habits:
Since having my children, I have gone through periods where I have been very meticulous about my finances and periods where I didn’t care. During tragic and emotionally-draining moments in my life, I’ve spent money to gain instant gratification mostly from food.
But, I tell myself it’s okay because we spend so little in other areas of our lives. For instance, I’ve became a minimalist to avoid living in clutter and having to spend so much time cleaning and organizing our belongings! My husband wears a uniform, I rent my clothes and my children have capsule wardrobes. Considering that we rarely buy things that we don’t need, you would think we would have a lot more in saving but we spend a lot on food. Eating out and ordering in is a big luxury for us, that we do often.
My money goals:
I want to re-write the emotional script I’ve programmed in my head about money. I’m still figuring it out, but I know don’t want to be driven by fear. By December 2019 I would like for us to have a three-month emergency fund of $17,988 in a savings account. We currently have $5,966 one month saved up! By December 2020, I’m aiming to pay off $17,220.92 in student loans. It’s feasible if we make $1.5K in payments towards student loans starting January 2020. As a long-term goal, I want us to save $200K for a down payment on a home. We currently have $2,176.90 saved towards this.
“I’ve put the max dollar amount we can charge on credit cards on a little sticker so we never forget our limit!”
My go-to budgeting tools:
I use a notebook to budget our money. I keep track of our credit card debt since I pay them in full at the end of each month. I have all of the go-to budgeting apps on my phone, including Mint, Credit Karma, the Chase, American Express, Citibank apps and one for a Credit Union! I designate my American express credit card for our subscriptions/monthly expenses and transportation fees, our Amazon card for clothing or miscellaneous expenses and all of our food expenses are charged to the Citibank Costco credit card.
By designating a card for each budget category, I’m able to monitor our spending levels more easily. In fact, for every credit card, I’ve put the max dollar amount we can charge on credit cards on a little sticker so we never forget our limit! This way, we never go over the recommended spending limit and we keep our credit score high!
How I’m challenging myself this week:
After scrutinizing our budget, the problem area is pretty obvious: We eat out a lot. Cooking dinner at home is almost a foreign concept at this point. I’m challenging myself for this week to not use Caviar, Postmates or Door Dash and I plan on making good old-fashioned home cooked meals.
How much I *usually* spend: ~$500 on food
VS.
My *new* weekly budget: $400 for food
Day One, Sunday:
We ate brunch at home and then went to eat dinner at a family birthday party. Food wasn’t a big expense today, but I have to admit the previous day we did spend $200 on gift cards for the birthday party! This made me think about how I don’t have money allocated for gifts into my budget…
We also had a few rounds of drinks at a bar. My husband covered the first round (—$18.42) but I noticed right away was that he tipped cash. When I asked him how much he wasn’t able to tell me and that led to a brief conversation about how we need to track our cash spending! I got the third round of drinks (-$29.00) after my friend covered the second round.
Spent: $47.42
Day Two, Monday:
We didn’t spend any money on food today and instead had brunch at home again. I think if I wasn’t doing this challenge I would have said, “Lets go out to eat for brunch!” We were invited to my sister’s BBQ and I was prepared to buy some fruit platters, chips, and dip, but the Scrimp City challenge made me think about only purchasing food we actually needed. That’s why I was relieved when I texted my sister for details on what exactly I could bring and she said, “Nothing we have a lot of everything.” I was a little self-conscious about arriving with empty hands but…once I saw they had a lot of food, I felt better.
Spent: $0!
Day Three, Tuesday:
Day for Costco Groceries (-$169.89). Before heading out, I checked the fridge to see what do we need to finish eating before buying more of it. This made me realize that part of the reason our food goes bad is because our grocery shopping at Costco can actually last our family of four 1.5 weeks but we shop weekly.
I realize that I value spontaneity and that planning meals feels like I am imposing on my freedom. Over the years I’ve told myself that I earn enough to be able to eat out and that—F the patriarchy!—there’s no reason I should cook at home. But the sheer task of logging my expenses every day is so draining! I feel like I’m suddenly in a state of anxiety and it bothered me so much I wanted to just not spend any money on food. It’s like, who knew that just logging your expenses every day could be so triggering!
At least, I now know that I can’t create too strict a budget, because living with a scarcity mindset isn’t sustainable. I have to find a way to not feel emotionally pulled too far in one direction or the other. This is partly why I’m ok with giving myself a “fun fund,” of $200 that I can spend on whatever I want outside of food. It helps me feel like I earn enough.
Spent: $169.89
Day Four, Wednesday:
I cooked at home and my eldest son really liked my salmon which he usually never eats! I noticed I was comparing my cooking skills with my husband’s cooking skills (he makes everything from scratch) and it made my efforts feel less worthy. Once again, I became mindful of the stories I was telling myself that were creating uncomfortable emotions. In the end, those stories were egging me toward spending money!
Spent: $0!
Day Five, Thursday:
I cooked at home again. I placed the food I made in the middle so everyone could serve themselves. It was nice to be in control being able to eat exactly at 5:30 p.m. We all helped to clean up and then even had time to enjoy as a family before getting ready for bed. I wondered if this was what women in the 1950s felt like and that cooking for my family may not be supporting the patriarchy after all.
I’ve been realizing how much I actually control in my family’s life: how we spend, what we eat, when we clean, along with other routines. My husband noticed too and started complaining about feeling like he didn’t have a say in our lifestyle. I wish I could say we discussed it calmly, but my insecurities got in the way. Next time.
Spent: $0!
Day Six, Friday:
Whenever my husband and I go out on a date, we take a Lyft because he doesn’t know how to drive. And while I can drive, I’ve told him it’s not a date if I have to drive him. So, cue a pricey date night, with the car ride (-$15.08), and a big dinner (-$73.26 + $16.74 Tip = $90.00). Oh, and dessert and drinks (-29.32 + 10.68 Tip = $40.00)!
I noticed we tend to tip more than 20 percent and I wonder whether I should include tip as part of our food budget or part of our “giving” budget. On our Lyft drive home (-$13.38), I started thinking about how much we could save if my husband knew how to drive (he’s a New Yorker in California). It turns out he is spending almost $500 a month on Lyft. This makes me think I should drive him to work whenever possible and at least cut the Lyft budget in half.
Spent: $173.46 ($102.58 on food only) ($130 Food + tip)
Day Seven, Saturday:
We had drinks at the Cheesecake Factory (-$26.35 + $5.65 TIP = -$32.00) and I drove us to our dinner date so we could save in our Lyft purchases. I really enjoyed our dinner date (-$43.27 + $11.73 tip = -$55.00) and when the check came, I ended up tipping more than 20 percent again.
Spent:$87 ($69.62 on food only)
How much I saved by end of week:
Total Spent: $389.51 on food (and $44.80 on tips!) + Total savings: $65.69
Final thoughts:
I started using the Every Dollar App to track our spending and that’s when I noticed that our food budget wasn’t inclusive of tips, delivery fees or even parking. It’s so small, but it adds up quickly! As a result, we are totally spending more than the $5,966 monthly budget, which includes our fixed bills and $1,600 for food.
It’s no wonder we’ve been (quite literally) eating away at our emergency savings goal slowly over time. A part of me, though, is surprised that I’ve found areas where I can cut back even further in our budget. The hard reality is we’ve been living above our means for a while. To fix this, I’m considering creating a line item for “giving,” that’s inclusive of our tipping practices (we always tip 20 percent!). I’m also reconsidering whether we should just focus on tackling our debt before we focus on building our emergency fund.
The biggest lesson from this experience, though, has been that it’s forced me to think deeply about what kind of lifestyle I want to have and what money lessons I want to pass on to my kids. Do I really want them to grow up expecting food delivery is on its way? Even if I can afford to dine out, do I really need to? There’s no shame in cooking a meal at home!
I’ve long had that immigrant mentality that success means doing better than our parents’ generation. Now, I’m wondering, in what ways do we want to be better than our parents? I’m not sure I have the answers just yet, but the first step is asking the questions you’ve long avoided.
—As told to Theresa Avila
