I’m sure this may sound strange, but bear with me.
If you’re anything like most millennials, you’ve probably grown up at the same time cell phones have. I remember when I was given my first cell phone. It was a little round flip phone with no frills. Texting cost money, apps were nonexistent, and good luck accessing the internet. Luckily for us, technology has continued to advance and now we can do almost anything with the little rectangles we carry with us at all times.
Fortunately, but unfortunately, these new technologies allow us to constantly add more and more useful tools to our phones, which eventually forces us to run out of storage. Things that we didn’t have 5 years ago have now become “necessities” that we can’t imagine living without. This is where the problem arises.
Of course, I’m annoying, so I ended up relating this issue to personal finances, and here we are.
What the Heck Does This Have to do with Budgeting?
Glad you asked! Over time, our phones have gotten smarter, faster, and more capable of handling more tasks. Obviously, upgrades to the memory needed to be made in order to remember everything we want it to remember.
For example, cell phones in the early to mid-2000s had memory ranging from around 10 to 50 MB. And yet, cell phones were the wave of the future and had revolutionized communication. Fast forward to 2016, and the most recent iPhone’s minimum memory offered is 16 GB. That’s 320 times more than what we typically got a decade ago. We went from having the memory to barely download one of today’s apps to being able to have thousands of pictures, hundreds of songs, a movie or two, and dozens of apps all in our pocket.
But guess what? It’s still usually not enough.
Honestly, I’m guilty of this. Not sure if it’s laziness or a lack of ability to sacrifice something, but before my most recent phone upgrade, I had maxed out my memory. I had to delete something every time I wanted to take another picture. There were no more apps that I could fit on my phone, but somehow I justified everything else I had and struggled to part with any of them. I couldn’t even update my phone because it required memory.
I’ve already far surpassed the limit I had hit on my old phone since upgrading to a newer model. Constantly seeing and hearing about new apps and tools piques my curiosity and I often end up downloading them. Similarly, now that I’m nowhere near the maximum amount of memory I have available, I’m free to take pictures and videos as often as I please without having to worry about deleting them. My memory budget has increased, so my consumption has as well.
But that’s a Cell Phone, Not Money?
True, but think of your phone’s memory as your income. Throughout your career, your income will likely rise. What do you do when that happens? Do you spend more money because you have it, or do you keep spending at the same level?
You’ve made it this far in life. I’m pretty sure that if you were able to survive before your wages went up, you’ll be able to survive in exactly the same way after it goes up. Like cell phones, you were 100% able to get by with a lower income/memory. You learned to live with what you had and make it work.
Sure, spending more money for life upgrades may make things easier, but is it necessary? If you’re forced to live within your means, you’ll probably manage to do it. Just like how you may be forced to work within your phone’s memory. If something arises that you need more than something that you already have, you’ll make the cuts necessary to be able to get it.
If you need Google Maps to travel, you’ll probably be willing to delete Flappy Bird to make room for it. If you need to pay for car insurance, you’ll probably cut your cable bill to afford it.
When you’re forced to live using what you have, you’ll make it work. The problem with most people is that as soon as they get more, they take advantage of it and upgrade their lifestyle. At a certain point, the things they THINK they need have become luxuries that they “can’t live without.”
What Can You Do?
Find exactly what you actually NEED to spend each month in order to survive comfortably. If you’re doing pretty well financially, maybe you can set aside a little bit to spoil yourself, but be cautious and keep it as low as possible. Force yourself to stick to the budget.
Creating an artificial limit will help you to make sure you make wise decisions. It will help you separate the needs from the wants. Just like how your phone’s memory will prevent you from keeping things you don’t really need, this artificial financial limit will help you to do the same.
Consider setting aside a certain amount each month for saving and investing. Make this amount a priority. If every paycheck has 20% going directly to an account you can’t withdraw from, you’ve already created an artificial spending limit, and you’ll be forced to stick to it. Along with investing in yourself, you should also pay yourself. The less money you have access to, the less money you’ll be willing to spend.
iHope you can do it.
Do you have a budget? What strategies do you use to stick to it? Comment below and share some of your strategies!