To this day, I still won’t eat peanut butter — all because of that horrible feeling you get from being financially out of control.
Let me explain. When I was in elementary school, there were days I couldn’t afford a normal school lunch. So the lunch ladies would begrudgingly hand me this sad-looking, cellophane-wrapped peanut butter and jelly sandwich. The other kids gave looks that varied from pity to disgust.
My parents weren’t great at managing money. But with every mouthful of dry sandwich, I vowed that when I was an adult I would seize control of my own financial situation so that I never had to eat peanut butter again.
These are the five key lessons I learned on that journey.
1. Being in Control Means Knowing Where You Stand
Don’t let the thought of a budget scare you though. When people hear the word budget, they automatically think of a “money diet”: no Oreos, no cheeseburger — just boring salads.
But it doesn’t have to be that way when you’re just getting started. My first budget was a pretty simple Excel file that showed how much I made, how much my bills were, and the average amounts I spend each pay period on food and shopping.
A budget simply needs to show where your money is going. (The flip side is just paying your bills when they come up and hoping for the best.) Are you spending more than you think on entertainment? Eating out? Happy hour? This is important information as we move into the next step.
Meanwhile, think of your credit score as a sort of grade measuring how effective your current budget has been.
2. Being in Control Means Knowing What Your Priorities Are
For me, one of the biggest things to get me through the workweek is knowing that on Friday a big group of us go out to lunch together. Every other day, I pack lunch, but on Friday we go out and have a great time.
But, when I did my last budget update, I realized just how much money I was spending a month on these beloved Friday lunches and it shocked me: It was around $80 dollars a month. And let’s just say that compared to my income, this was really high.
So I considered cutting it,. But I realized that it was money I truly wanted to spend: It was a priority. I valued this experience because it helped motivate me to be good at my job, which in turn earns me more money.
But to make something a priority, you have to give something up. For me, it was some of my television subscriptions. I was spending $40 a month on subscriptions, but most days I came home and just surfed the Internet.
It’s your life though. Your priorities will be different. The important thing isn’t which calls you make — it’s making sure you’re choosing them instead of going on autopilot.
Use your budget information and your values — and then knowingly make a choice to spend where you get the most happiness. When you prioritize your spending based on your terms, you’ll find you can make $80 go further in happiness than you think.