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How I missed my pledge and how I'm fixing it

I failed to meet my pledge this year due to poor budgeting. In this post, I explain what I think happened and how I plan to avoid similar problems in the future.

I wrote this post because I felt like I owed the community something for missing my pledge, and I thought others in a similar situation might benefit from this -- I can easily imagine others running into this kind of problem.

What happened this year

I'm not great with budgeting in my personal life. This is my single biggest problem with meeting my pledge. This year, it bit me especially hard, and I expect to fail to meet my pledge for the year.

There were a few things I wanted to do that were expensive, time-limited, and really "fun" -- not necessary to stay alive, but part of what makes my life worth living. Some friends of mine had weddings that I wanted to fly to, dress well for, and buy presents for, and there were a couple of other events that I expected to be really fulfilling in a similar way. I'm in my late 20s, and passing these things up just felt too painful to me -- I don't know when I'll get these opportunities again. I don't think this is an excuse for failing my pledge, just a reality of my financial situation that I didn't realize early enough. I didn't have enough in my normal monthly "fun" budget to cover these expenses.

The plan was to borrow against future months' budgets to finance these fun things. I would spend less on fun in later months of the year, and use that money to pay pledges I'd missed (and to catch up on paying off my debts).

This plan didn't work. I might have been able to make it work by (1) figuring out how much I'd have to give each month and how much I'd have to put into my debts to catch up, and (2) setting aside part of each paycheck to pledge / pay debts, but I didn't do that.

At this stage, I haven't put aside enough money to expect to hit my pledge this year without creating serious problems in my life. This sucks.

How I'm fixing it

I'm not explicitly planning for now to catch up on my pledge -- effectively, I'm declaring bankruptcy on the pledges I've missed. I found it too daunting to figure out how to make this work, and I expect to lose more future pledges if I don't stabilize now. Assuming I stabilize, I might revisit this and try to catch up on my pledge in the future, but I'm not making promises there.

I've created a new budget category, "Fun savings". The purpose of this category is to save against future expensive, time-limited things that I'm not realistically going to pass up.

I've also created a new procedure that I'll follow on the first of each month:

  • Pay my pledge and my debts.
  • Leave housing, monthly costs, and monthly fun budget in checking.
  • Transfer the remainder to savings.

The effect of step 3 is to move this month's fun savings and anything unspent last month into fun savings. When special, time-sensitive, expensive "fun" things show up -- I expect most of these to be travel, because most other things can just be deferred until I've saved up for them -- I'll dip into fun savings to finance them.

Comments (9)

Comment author: Julia_Wise 26 October 2016 03:36:33PM 1 point [-]

I love it when people talk about the nitty-gritty of how this actually works (particularly because it works very differently for different people, and we need multiple models out there). Thanks for writing this up!

Comment author: Daniel_Dewey 26 October 2016 03:44:16PM 0 points [-]

You're welcome :) Glad you liked it!

Comment author: Milan_Griffes 18 October 2016 08:12:23PM 0 points [-]

I enjoyed reading this, though sorry to hear about pledge-related stress!

I'm curious about your reasoning behind donating a big portion while simultaneously paying down debt. My intuition is to focus first on paying off the debt, then ramp up giving once you're debt-free.

Comment author: Daniel_Dewey 24 October 2016 06:01:47PM *  0 points [-]

Thanks Milan!

I haven't thought a lot about that, and might be making the wrong call. Off the top of my head:

  • There's a community norm toward donating 10%, and I'm following that without thinking too hard.
  • I expect donation effectiveness on the scale of my donations to get worse over time, so giving earlier at the cost of giving a little (?) less over my career seems like it might be better.
  • Giving feels good in a way that paying debt doesn't. This isn't an EA reason :)

I guess I could put my 10% toward debt reduction instead -- if you or anyone else has pointers to info that might cause me to decide to do that, I'd be interested in seeing it, and in promoting it so that other debt-saddled EAs can make better decisions!

Comment author: Milan_Griffes 25 October 2016 11:08:21PM 1 point [-]

I don't have pointers to good info, other than Mr. Money Mustache's blog, which I think was already mentioned.

I'm following in intuition along the lines of "put on your own oxygen mask before helping those around you with theirs."

My bet is that my personal impact will be much larger once I'm financially independent. Giving a significant portion of my income now is a drag on reaching financial independence. I'd prefer to accelerate my progress towards financial independence at the expense of doing good today.

We're touching on the "give now vs. give later" debate here; intuitions may diverge.

Comment author: Jmd 24 October 2016 09:19:51PM 2 points [-]

I disagree that 'giving cause it feels good' isn't an EA reason to give. It's about the head and the heart right? I give because it feels good, and it feels even better knowing that where you give is high impact and if giving makes you feel good then that's encouraging to others as well :) And I also started giving when I had my student loan to pay off - maybe if my loan was bigger I would have thought about starting with smaller donations like with The Life You Can Save, but my main motivation was that if the debt is an excuse now, then buying a house will be an excuse later, and then all the other life excuses and I will never do it. So I leapt. People live really well on less than I did even with the donations and the loan repayments, it does mean thinking more about 'fun' activities' though I found that I could still do all those things and where I spent less was on 'stuff' - things you buy but don't really need anyways.

Comment author: Daniel_Dewey 25 October 2016 12:07:48AM 0 points [-]

Thanks for mentioning this -- I totally see what you're pointing at here, and I think you make valid points re: there always being more excuses later.

I just meant to emphasize that "giving now feels good" wasn't something I was prepared to justify in terms of its actual impact on the world; if I found out that this good feeling was justified in terms of impact, that'd be great, but if it turned out that I could give up that good feeling in order to have a better impact, I'd try my best to do so.

Comment author: DavidNash 10 October 2016 12:27:42PM 3 points [-]

You may find it helps to look into some of the techniques that this guy used to retire at 30, but instead to save more for paying off debts and the pledge.

http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/

When I took the pledge I was already saving 35% of my relatively small income and so it made it a lot easier to take.

Comment author: Daniel_Dewey 10 October 2016 05:02:24PM 0 points [-]

Thanks! I'll check it out.