Girl Math Versus Budgeting: How to Shop Smart & Save Big with iCASH

We’ve all seen (and laughed at) "Girl Math" memes. You know, the ones that perfectly capture those justifications we all make (boys and girls) when buying something we probably don’t need. For example:

• "If I return something, that means I made money, right?"
• "If I buy it on sale, the amount I saved is technically a profit."
• "I used my _____ card, so it didn't cost anything"
• "If it's less than $5, it's basically free."

Sound familiar? Girl Math is a funny, lighthearted way to "rationalize" purchases. Unfortunately joking about it doesn't actually mean you didn't spend the money. And here’s the kicker: those extra few hundred dollars spent each month could cost you hundreds of thousands of dollars over your lifetime?

The reason this will cost you life-changing wealth in the future is because of what economists call "opportunity cost," or the thing you could have bought (invested in) with the money if you didn't spend it on Starbucks, Lululemon, Bass Pro Shops, Sephora, or 4WheelPartsDirect.com. Let’s say you on average spend an extra $100 each weekend on stuff you don’t need, but justify it with "Girl Math." One way to do this is to order two different sets of seat covers for your Jeep, then return one and celebrate the refund to your credit card (forgetting you still spent $400 to put seat covers over . . . seat covers, the ones that came with the Jeep). While it doesn’t seem like a big deal in the moment, here’s what happens over time:

• $200/month = $2,400/year
• Invest that $2,400 each year in an S&P 500 Index Fund (earning 8% Total Real Return)
• In 20 years you would have $237,000
• In 40 years when you retire, you would have $1.4 million!

Yikes. It's a whole new way of looking at buying crap for your car, wardrobe, or kitchen every weekend when you know that if you didn't you would have enough savings to make the down payment on your Dream Home, retire early, or become multi-millionaires. Because when you have that kind of money, you can have whatever you want, and don't need to lie to yourself with Girl Math!

But what if there was a way to have both the stuff you want now, and the wealth and life of ease you desire later? We can turn Girl Math into real savings and still have fun spending guilt-free when we set up an automated budget. Enter the iCASH Budget System™, your solution to spending smarter, without giving up the things you love!

The iCASH Budget System: A Fun and Smart Way to Manage Money

Our solution to Girl Math is the iCASH system. It’s simple, effective, and keeps you in control of your spending and savings goals. Here’s how it works:

1. i = Identify Dreams and Goals. Start by identifying what matters most to you. Do you want to save for a house, a vacation, or financial freedom? By getting clear on your dreams and goals, you’ll feel more motivated to stick to your budget.
2. C = Calculate the Cost. Next, figure out how much those goals will cost. If you want to save $50,000 for a house down payment in five years, that’s $10,000 a year or $833 per month. Knowing the numbers makes it easier to see what you need to save.
3. A = Assemble Your Personal Financial Plan. Once you have the numbers, it's time to assemble a plan that balances your goals with your spending habits. So long as you're setting aside the $575 a month you need for retirement in the Blended Retirement System (BRS) and the $833 you'll need to buy your Forever Home with a VA Loan, you can set aside $500 for a "Girl Math Account" stress-free.
4. S = Set Up Automation. The key to achieving a win-win between Saving and Spending is to automate everything. Set up automatic transfers for savings and investments. Then, create a separate spending account with a debit card just for shopping. Use it guilt-free until the balance hits zero.
5. H = Hold Yourself Accountable. With everything automated, you’ll only have a set amount to spend on fun. When your “Girl Math Account” hits zero, that’s it. No cheating by moving money from other accounts! If you overdraw the account, it's the bank that will be calling you, not your partner, so there won't be any blood on anyone's hands.

Check back over the next few weeks for more posts introducing our iCASH Budget System, and more brilliant insights on why budgeting apps just don't cut it -- and aren't even real budgets in the first place.

Why the iCASH System is a Win-Win for Couples and Spenders

Here’s where the magic happens: If you’re in a relationship where one person is trying to save and the other loves to spend, iCASH is your peacekeeper. Let's just admit up front that if you are a planner and saver, you're speaking an entirely different language than is someone who is spending and using Girl Math to waste the hard-earned money you and your family have earned. It's like a Left Brain-Right Brain, or Mars-versus-Venus standoff. So long as you continue to think and argue and debate on those terms using totally incompatible language, you'll never find an answer.

Budgeting will help you find a "Win-Win". Agree on a set amount for the "Girl Math Account" every month, and the Spender in your relationship can spend on what they want and justify it however they want until they use up the monthly allotment. The Saver is also on a budget, with a similar "set amount" going into their chosen accounts each month. Both of you get to accomplish your goals. And if you're single and just have a bad spending habit, this is a way to reconcile your "Lizard Brain" with your "Monkey Brain": the Monkey Brain planned all your savings goals and needs a budget to be happy, while your Lizard Brain doesn't plan for anything and just reacts, but also makes you happy, and so deserves a little bit of cash. 

When you set and stick to a budget, you create a win-win both by achieving future savings goals while also not living like a pauper in a wood hut in the woods. But more than that, it actually creates a Win-Win-Win by taking money stress and arguments out of your monthly, weekly, or daily interactions. There's no point in fighting over money when you're speaking different languages, and no logical argument, no matter how air-tight, can ever defeat Girl Math. You've got to get "asymmetric" or "unconventional" in the military jargon, and stop trying to meet your opponent head-on.

Why iCASH Works: Bridging the Gap

iCASH brings Spenders and Savers together, and mends all wounds between those who think using "Girl Math" and those who use actual math. It’s the budget that gives you the freedom to spend without the guilt, while ensuring your long-term goals are still on track. The reason why it works (when no other budgets or plans can work) is that it starts with shared "Dreams and Goals." You can agree with your "Spender Self", or you can agree with your "Spender Partner", that you don't want to live Paycheck-to-Paycheck the rest of your lives: you need massive savings so you can level up your life and achieve more.

When you save, you can help your kids avoid crippling life-long debt from attending college, you can afford your Dream Home, you can Retire Early, you can live out your Dream Life. Only you can't do any of that without a budget and without savings goals.

When you spend, you buy things that make you happy right now -- and with tomorrow never guaranteed, there's little joy in living a life without rewards and fun today. So no matter your long-term and big-picture life goals, you need to budget cash today to spend on the fun stuff.

Instead of arguing about why the Spender spent too much or the Saver is too tight with money, use iCASH to secure your future financial goals through monthly automated savings deposits and investments. And also use iCASH to give yourself a reasonable monthly spending budget for today. You get your “fun money” while still making sure you’re saving for the future.

The best part? From shear fear at over-drawing your "Girl Math Account", you'll never actually take it all the way down to $0, so at the end of the year you’ll likely have a surplus in your account. You may have a few hundred extra dollars for a guilt-free reward -- or a couple thousand for a nice beach vacation! As it turns out, Girl Match can actually be pretty smart (so long as it's paired with the iCASH Budget System).