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Update, we can’t pay off our buy now pay later loans. Shoutout!

A new survey found that 56% of Gen Z can't keep track of when their installment payments are due. Installments are the individual scheduled payments you have from having to do a buy now, pay later.

Between Klarna, credit cards, and Afterpay options popping up everywhere, It’s easier to buy-now pay-later (BNPL) yourself into a hole faster than you can say free Teletubby squish mellow. 

A lot of the financial tools available to us can provide services that may seem helpful in the moment but can actually be problematic. 

These BNPY services are especially bad because they make it easy to forget or fall into a situation with fees heavy fees.

And then budgeting apps are reactive, so they tell you that you’re spending a bunch of money. Not how to avoid it in the first place.

Which is a planning problem, and budgeting apps won’t solve that.

Here's the pitch every budgeting app gives you: "Connect your accounts, see where your money goes, get insights." 

Sounds epic. And it is useful. Knowing you spent $340 on DoorDash last month is important information.

But it's information about a decision you already made. You can't uneat those nuggets. Please don’t. Please.

Think of it like driving. A rearview mirror helps you see what's behind you. You need one. But if you're only looking in the rearview mirror, you're going to crash into something. You also need a windshield. The thing that shows you what's coming.

What's coming, not what did I spend. Rent deposit on a new apartment, spring break travel, new school year supplies all add up and it helps if you think ahead on these purchases rather than look back and realize you’re cheddar is cheesed.

If you’re a true reader of Cense, you’ll know last newsletter focused on the savings equation.

But it’s math you can do.

If you need $1,200 for a spring break trip in 6 months and you get paid twice a month, that's $100 per paycheck. But budgeting apps don't think about that.

Your budget tells you income minus expenses, but that’s not what you need necessarily.

You should focus on income minus expenses minus future obligations. 

If that gap is negative, you should know that ahead of time to make adjustments.

Say you make $800/month from a part-time job. 

Your fixed costs (bills that don’t budge, like rent, phone, subscriptions, food eat up 200. Your budgeting app says you have $600 left. Great.

But you've got a $1,000 spring break trip coming up, $100 in textbooks next semester, and you also spending $150 on Christmas gifts at the end of the year. That's $1,250 in upcoming expenses over the next few months. You actually need to be saving $250 to $300 of that $400 "leftover" every single month.

Don’t abandon your budgeting app, just add a layer on top. 

A notes app works. Write down upcoming expenses, assign them monthly savings targets, and subtract those from your "available" money before you spend a dime.

A sinking fund is just a savings bucket labeled for a specific future expense.

Some banks like Capital One let you create multiple named savings buckets inside one account for free. So instead of one big savings balance that you "hope" covers everything, you split it into labeled pots that each have a job.

Set up an auto-transfer from checking into each bucket on payday. The money moves before you can spend it. Gravy baby.

Also, quick reminder that I am not sponsored by any of the tools I note here. I wish I was! These are just the tools I use.

Open a note on your phone right now. 

Write down every expense over $50 you know is coming in the next 6 months. 

Put a specific dollar amount next to each one. 

Add them up, divide by 6, and that's your real monthly savings target.

Takes 5 minutes. Changes everything ;).

Thank you so much for being a part of this newsletter. I am grateful to write to you weekly and I hope this helps you feel more confident with your finances.

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