Budget comes from the French word bougette or little bag, which is what people used in the middle ages to keep their coins and IOUs. For those of us who have been terrorized by budgets, knowing that the word is simply a “little bag” can be both anti-climactic and deeply soothing.
It’s just a little bag.
A bougette is a way to keep track of what you have coming in and what you have going out. I’ve written about how to build a bougette in True North with Cash Flow and Using Money to Live into Your Values. As a brief summary, I follow and recommend the 50-30-20 bougette,
- where 50% of your take home salary goes to “must haves”, think food and shelter, and for some of us therapy
- then 30% is “for tomorrow”, for example becoming debt free, saving for a vacation, investing in yourself, and establishing a cash cushion. I also include charitable giving and providing for family in this section because it contributes to the future society I want to build.
- this leaves you with 20% to “enjoy today,” where you can choose to burn the money by spending it all on fireworks, or whatever else lights you up
When I first started with my bougette my “for tomorrow” was about 5%, and the “must haves” were close to 70% because my income was low and my expenses were high. As I earned more money and moved to a less expensive neighborhood it became easier to transition into 50-30-20. Once I decided to build myself a nest egg to start a business my bougette was close to 30% must-haves, 45% for tomorrow, and the remaining 25% was for today. Thank you Philly for your affordable cost of living!!
Once you’ve built this lovely bougette, what’s next? How do you actually implement it without terrorizing yourself as if you were on a restrictive diet?
Here are five tips to enjoy your bougette.
- Give it time
- Set yourself up for success
- Track your spending
- Update as needed
- Be bored
Give it Time
Just like an exercise routine or planting a garden, seeing results from implementing a bougette takes time. When you expect the seeds you plant today to bloom immediately you set yourself up for disappointment.
Giving your bougette time means staying with the system you’ve built for at least three months. One of my clients used to show up at most of our monthly meetings with a whole new bougette! It was difficult to plan for her living expenses when she kept switching things around.
My recommendation is to make your bougette as close to reality as possible. This takes up front work of auditing your past spending looking through credit cards, bank statements, and cash payment apps. But once you know that on average you spend $365 on gas and $50 at the gym, then that’s just what it is. If you spend more than you earn target one or at most two categories to change. This takes us to the next recommendation…
Set Yourself up for Success
Include slack in your bougette. You don’t want your little bag to be so tight that every dime needs to be measured. Going along with the example above, if gas on average is $365 but every once in a while when you go visit your grandmother it jumps up to $450, then set gas at $400. This will give you space to put money aside for those months when gas is higher.
If on the other hand your gym membership is a flat $50, then it’s a flat $50.
In my budget under the “enjoy today” category I had a “Big Wants” sub-account that I used for larger spending, for example when I went to weddings or wanted to attend a retreat. This helped me feel freer to spend the money than if I had it under my regular “for tomorrow” saving accounts. It also helped me relax when I was invited to last minute events I needed a new outfit for.
Track your Spending
There’s a big caveat here – track your spending if you have a history of overspending or underspending.
If for the most part you have enough cash in your checking account to cover “must haves” and you’ve automated your “for tomorrow” categories meaning that the savings/investment/debt payoff automatically gets deposited every month, then you can let your “enjoy today” category ride.
It could be helpful to simply move your “enjoy today” cash to a different account and use a debit card for that account. That way there’s no risk of over spending. Although you may not benefit from credit card points, you can benefit from not having to track. This technique can also be very helpful for people who have a history of building up debt when they did not mean to.
For those of us who do need to track, experiment on your favorite way to do so. I’m old school, as in I like writing it down and use a simple checkbook register on my phone to keep track of things in two categories: for today and travel. For my business I use Wave and then categorize the spending. Other people love You Need A Budget (YNAB), Mint or Kakebo, but because Latin America is mostly a cash economy those don’t work for me.
It’s also very helpful for underspenders to track their spending. This automatically gives them permission to spend fully. If you gave yourself 20% to enjoy today, then go ahead and do so!
Update as Needed
As my mentor Susan Bradley says, “When life changes, money changes. And when money changes, life changes.”
- If you get a new job or promotion and earn more money, celebrate and update your bougette.
- If you get divorced and now have one income to support yourself, celebrate and update your bougette.
- If you get pregnant, celebrate and update your bougette.
- If your business is consistently pulling in more or less than it was before, celebrate that you realized it and update your bougette.
When I first started living on my own I considered having a roommate instead of living alone, but I just did not feel like it. I knew it could help me save money, but I LOVED having space for myself and being free to cook up a storm at 11pm with music blaring.
A few years later, things changed. I realized I wanted to take a sabbatical before switching careers. At that point saving an additional $400 a month felt more important than my freedom to walk around naked whenever I pleased. My goals changed so I updated my money to reflect that.
Money is a tool to live into your heart’s desires – act accordingly.
Be Bored
Imagine spending time staring at a little bag. With today’s attention spans I doubt anyone could spend more than 10 seconds contemplating it. Money management once it’s on auto-pilot is honestly as exciting as looking at a little bag.
I love getting clients to the point when they sound confused by how easy their money feels. After all that struggle it can honestly be anti-climactic to have a well-set up bougette. Aside from my tracking every other month and inputting my expenses, I don’t do much with my money. Most financial planners I talk to agree: bougettes are pretty tame.
The first few years of having a bougette were much more exciting because I did not have a cash cushion and unexpected expenses like car repairs and Christmas gifts threw me off for months. As I built up my cash cushion this additional slack made it possible to relax.
Leaning into Your Bougette
Wherever you are in your bougette journey, congratulations!
As you own your power with money more and more, outside factors like inflation and shoe sales will be less important.
While late stage capitalism and a consumerist culture can make it difficult to have financial stability, we can do this! Just remember how you navigate potlucks and buffets – take what you like, and leave the rest.
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