My Solo Budget - HABITS
My budget is weirder than yours + free habit building template #mymoneymay
This month I’m sharing my way of managing my money as a solo/single-income human with real wants and needs.
Last week I shared the 3 PRINCIPLES of my solo budget and I hear they’re not your usual personal finance advice. Go read there first.
This week I’m going deeper in classic analytical fashion: what does one do when one wants to apply lofty principles to their day to day? Indeed! Build habits.
HABIT #1
I keep a yearly budget
I found it makes everything easier by helping me keep track non-monthly expenses. How?
At the beginning of the year I estimate how much money I’ll spend. I know, pretty hardcore. In practice it’s just about multiplying by 12 the amounts I usually spend monthly, maybe even starting from the previous year’s average. Then I add, very importantly, all the amounts I spend (or save) irregularly during the year. This means:
insurances paid on an annual or bi-annual basis
local and government taxes (yearly or quarterly)
money for vacations, life event celebrations, festivals
goals: a downpayment for a house or a new car
software and app subscriptions that renew every year
a budget for donations, gifts, clothing (& other non-essentials I might find on sale on a random day of the year)
a budget for appliances and tech that will inevitably break
etc.
I call this My ideal lifestyle number, and I accept that my income might not cover everything and I’ll have to make trade-offs and compromise. That’s good. The point is to be realistic (per principle #2) and prepared.
HABIT #2
I practice selective frugality
[🔔 I won’t mind if selective frugality becomes a meme, so feel free to this this concept as much as you please]
It’s exactly what it sounds like: I refuse to spend money on some things that add no value to my life and I spend generously on others.
I’m very unlikely to pay full price (or at all) for:
coffee and food out, unless it’s a specific social activity
sweets and junk food
trendy clothing, decor or furniture
skin care and beauty items, beyond basic cleaning and moisturizing
new tech before the old one becomes completely obsolete
weddings and other life-events
I’ll gladly spend my money on:
hobbies that keep me sane and joyful
good quality cotton clothing and comfortable shoes
a good backpack and a good suitcase because they are heavy duty items that I use often and keep my things safe
anything related to noise and temperature control (from headphones to a good winter jacket)
therapy
The consequence: my budget is weirder than yours!
HABIT #3
I track with a purpose
I care more about where my money goes next, than about the 10 ways I overspent last month.
But this doesn’t mean I don’t track my income and expenses. Instead of a traditional budgeting method (list your projection for the month, overspend, do it all over again), I use a method that forces me to make choices.
When cash was still king, people would put their banknotes in separate envelopes for each type of expense (housing, groceries, etc.). When an envelope was empty they had to physically take the money out of another envelope to pay for things.
I mostly use cards and online payments these days, so the reason I track my expenses is to simulate an envelope and know how much money is left in a category or if I need to move money over from another group.
However, I don’t track:
where my money goes (payees)
if I went over the budgeted amount for the month, as long as I’m able to take money from another category
detailed bills and categories if it doesn’t help me to know those numbers specifically
The envelope/cash stuffing method is conceptually my preferred way to budget and the reason why I built The Solo Budget for my own digital cash stuffing needs. I get in there once a week and update everything in 5-10 minutes. I find spreadsheets easy, but there are also apps for this (no affiliation, besides similar personal finance convictions).
In this context, tracking becomes truly useful: my preferred software uses that number to calculate how much money is left for me in a specific category, thereby forcing me to make decisions. Tracking becomes budgeting.
🙏 Thank you for reading this far! In appreciation for your support and for the little community slowly growing around The Missing Money Piece, I’m giving away an awesome habit building Notion template 👉 HERE. Just enter 0 in the price field and get it for yourself for free.
If it’s not clear, I love habits as much as I love personal finance and I’m happy to nerd out and help out on the topic as much as I can. Find me somewhere (comments? Insta?) if you’re also up for habit chats.
The Missing Money Piece is a newsletter about money culture. Here’s what you can expect every (other) Sunday:
Money mindset tips. Those soft gummies and hard pills.
Personal stories of personal development. Watch me grow up.
Step-by-step budgeting articles — these go with The Solo Budget (get on Gumroad or Ko-fi), the budgeting system I’ve been using successfully for 10+ years. Now available in cute spreadsheet form to other humans.
Quite honestly — the same universal personal development advice you find everywhere, but in my (many times) unfiltered voice.