Rich Bitch Step 3: New LBD (Little Budget Diary)

Catch up here: Part 1. Part 2.

Rich Bitch
Rich Bitch by Nicole Lapin

Once, I made last minute plans with a friend and I didn’t like the pants I was wearing that day so I decided to buy a new pair from Urban Outfitters after work and before meeting my friend. I impulse spent $60 for a pair of pants that fit my waist, but were too short. Other times, I feel like I spend my money at the drugstore every week on essentials or nail polish, or makeup. And it adds up.

Step 3:  Create a Budget Diary that works for you.

In addition to creating a budget, Lapin also breaks down the importance of checking your credit score and getting an annual credit report. 35% is payment history; 30% is debt load; 15% is credit history; 10% is the number of times you’ve checked your credit; and the last 10% is the mix of credit you have. The higher your score, the lower your interest rates will be! Shazam! I have a Discover Card and I’m currently carrying  a little bit over $5,000 in debt. BUT my card gives me my credit score every month with my statement! As of this month, I’m sitting at 720-740 (I know the actual number, but I don’t want to share it). So if 750 is ideal, I have a way to go to work up that score.

And now I’m going to share my budget. Gross. Let me paint you a picture! Lapin breaks down assets and liabilities by current and non-current, and mine are broken down like so. If you’ve ever used the website MINT, this is the basic calculation for your net worth.

Current Assets:

  • Cash
  • Checking Account
  • Savings Accounts

Non-current Assets:

  • Retirement Account (through work)

Short Term Liabilities:

  • Credit card debt (see above)

Long-term Debt:

  • Student Loans ($70,000)

And now I can build a budget based on my goals from step two and what I know about my current and non-current assets and liabilities. In some ways, I make a budget every month and every paycheck because I need to know that I have enough to cover my ass for each expense I know will come. But this is about saving and I need to have a better endgame strategy.

Total Monthly Income: $1,900

  • Rent (includes utilities at the moment): $850
  • Discover Card: $200
  • Student Loan Payment: $230
  • Phone: $106
  • Food: $120? –I think this is higher
  • Transportation: $116
  • Extras (gym/laundry drop off): $26
  • Savings: $100

I’m left with $152 for “fun things”! That usually includes whatever I need from the drug store, clothes, gifts, dates, and books. Some months I pay the minimum on my card so I can have more spending money. Also, I signed up for the app Acorns, that rounds up the change from any transactions I use on my debit card to put into a “moderately conservative, diversified portfolio.” I started it in August and I have $200 in the account. I leave this alone because I don’t need to pull money out for an emergency, but it does mean that for the past eight months I’ve been chipping away at my overall take home amount. I also earn extra money for working overtime, when a project arises. My job already provides for insurance and 401(k) savings, so I don’t have to budget for that (thank god!).

What this means is that I’m surviving in the city. I am afloat. Where I take issue with this book is that the author basically suggests that if your income doesn’t line up with your financial goals you should move and take a new job. But the whole reason for me to move to New York was to work in publishing (and I’ve got the student loans to prove it). Moving to a more cost-effective city is not an option. And it takes a long time to work your way up from entry level. She used an example of when she was an anchor on a TV show, her annual take home income was $95k! That’s something I could not even imagine being my salary in my wildest dreams of my publishing career.

Should I switch industries and work for a buzzy-meida company? I would make more money, but I haven’t spent the last three and a half years working toward one goal, just to change my entire life so I can afford a $3,500/ a month apartment (author’s example, not mine). That is ridiculous. Maybe this book is not aimed at me. Maybe it’s for people who work in LITERALLY ANY OTHER INDUSTRY besides publishing, where there’s money to spare at all points in time. It doesn’t work for me.

The author does mention re-evaluating the budget each time there’s a promotion or change in income, but right now, I am pretty stuck. Not to mention that my current budget isn’t going to help me maintain an emergency fund, payoff my credit card, go to a Broadway show (there’s other ways I could spend that money), or date a lot, it’s not feasible.

I’m getting frustrated. I will continue to read, but I’m not sure I’ll be able to follow the exercises she has in the book.

laptop writing budget
Not my hand. Source

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