Sometimes it’s Good to Feel Poor

From Podcast #188: College is in Session, the one in which Jesse talks about feeling poor is a positive.

College is in session, which means some of you students out there that need student loans to get by, have received a big loan disbursement. There is a whole debate about whether or not you should borrow money for college but we’re not even going to touch that today.

Since we give YNAB to college students for free, I want to believe you are taking advantage of that, and being smart with your money; that you are learning to follow Rule One and getting your priorities squared away, saving with Rule Two, and adjusting with Rule Three. I hope you are, but obviously, that’s your call.

But when it comes to the big, old, fat, loan disbursement you just received, I have very strong opinions.

You need to break that up into monthly amounts and create scarcity for yourself. We do not want you making your priority decisions—and I’m putting priority in air quotes at this moment—based on the false security of having a large pile of money just in your checking account.

So, break it up. Hide the rest of it. And you just deal with prioritizing a reasonable monthly amount. You might be thinking, “But that will make me feel poor.” Yes. Yes, it will. Because you are poor.

You are poor and so you should feel that way. When you feel poor, when things are scarce, that’s when your real priorities surface. Those are the priorities that bring you the most joy and those are the priorities we want you to be spending toward. Not, “Hey, all this money came in, so I should buy that new computer.”

None of that. None of that. Create the scarcity. Break up that big amount into small monthly amounts, budget those monthly amounts and then trust your budget. Hide the other months’ money far, far away from your little eyes.

And then look at the small, little amount and marvel at how broke you are and how careful you will need to be with that teeny tiny amount of money that is your stipend.

If you are past college, and you find yourself shaking your head, “Yeah, college kids. Do that, do the right thing,” and feeling a little smug, I must remind you that this has application for all of us. Are you putting enough away for retirement? Or is that money just part of a “big lump sum” you get every month, and without some self-imposed scarcity being spent elsewhere? Do you work freelance or in sales? If so, I’m sure you are shaking your head as well, perhaps for different reasons.

I can think of very few situations where someone would not benefit from stepping back, feeling some scarcity, and honing in on their priorities. Feeling a little bit poor sometimes may just be the best thing you can do for your finances.

Until next time, follow YNAB’s four rules and you will win financially. You’ve never budgeted like this. For more about how to stop living paycheck-to-paycheck, get out of debt and save more money, faster—subscribe to the You Need A Budget podcast today!But until next time, follow YNAB’s four rules and you will win financially. You’ve never budgeted like this.