This 23-Year Old’s Budget Will Blow Your Mind
However, let’s be in the business of empowering people, not making fun of them
Given what I do for a living, friends and random people I meet, often ask for advice.
I tell them I don’t give advice. I’m not a professional.
I’m a writer who relays his personal experience dealing with money and other aspects of doing life. I’m an expert at having made mistakes. Costly ones. I hope to relate, make topics that tend to intimidate accessible, and, if I’m lucky, help people make sense of their relationship with money.
From time to time, friends push. This happened recently. A younger friend asked me to look at his budget and offer suggestions. I told him to send it over.
He lives with his parents and brings in about $1,300 a month in income. These are his monthly expenses, self-reported via text message, and unedited:
- Groceries: $100
- Restaurants and bars: $680
- Entertainment: $485
- Car expenses: $400
- Clothing: $100
- Credit card payment: $100
- TOTAL: $1,865
He reports $2,000 in savings.
Clearly, there’s something wrong with this picture. Several things.
One, he spends more than he takes in each month, by $565.
Two, he doesn’t pay his own cell phone bill. He’s on his parent’s family plan.
Three, he spends nearly all of his monthly take home pay on restaurants, bars, and “entertainment.”
Four, and on the bright side, he pays his credit card balance in full each month. He says he only charges on it to build his credit.
I asked if we could meet for coffee.
I’m Not Here to Judge
As I noted in a recent Making of a Millionaire article:
I don’t know your perspective. I can only try to take it…
I dislike dogma. Personal finance and self-help gurus who claim to tell it like it is. It’s their condescending way or the shame-ridden highway. This approach serves nobody and nothing, except for the needy ego of the self-proclaimed expert.
I don’t care what you do. I care about you.
Too often, we see personal finance stories and accounts like the one I presented here. And the author of the piece goes on to chide the millennial generation.
That all-too-typical author is probably someone like me — Generation X and acting as if they never made the same flavor of mistakes as the millennials they take thoughtless pleasure in ridiculing.
Sure. I didn’t live with my parents when I was 23. I moved out when I was 19. I was on my own, 1,400 miles from home.
I didn’t have my parents to cover my budget shortfalls and excessive spending. I used credit cards. That’s probably worse.
Actually, no. It is worse.
So, for me to get on my high horse would be personal finance hypocrisy at its finest. It’s so easy to act like you have always had your shit together when you finally get your shit together.
It seems quite a few money and self-help gurus do what they do to make themselves feel better. They find therapeutic solace in other people’s struggles. It’s quite perverse.
Back to my friend. I maintained my history of not giving advice.
The remedies for my friend’s situation are obvious. You can likely name three or four off of the top of your head. My friend knows this. He turned to me less for advice and more for understanding. For empathy.
Instead of assuming the condescending position of expert (which I am not), I told him the embarrassing stories of using credit cards as my financial backstop when I was in my 20s. I detailed the financial mess the guy who “writes about money” sprang from.
I explained how I broke the cycle and that I’m happy to have made these mistakes. If I hadn’t, we would not have been able to make the connection we made over coffee on a partly cloudy Los Angeles afternoon.
I did my job.
This article is for informational and entertainment purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.