Personal Finance

Responsible budgeting?

  • Last Updated:
  • Oct 12th, 2007 12:15 am
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Banned
User avatar
May 5, 2005
13286 posts
13 upvotes
Toronto, Canada

Responsible budgeting?

Does anyone care to share their techniques on personal spending? I'm trying to get into the habit of spending less and saving more as I'm getting older. I can't think of a plan of attack. I either spend nothing at all (except pay rent and my internet) which are the only two constant right now; food is taken cared of from work and I usually spend $10-25 a month on snacks.

Then there are periods when I go on a rampage and spend hundreds and thousands. I need a little more consistency. Thinking of putting a side a small jar of disposable income, contribute to it 5-10% of my monthly pay.

So if you have any ideas you'd like to share, please do so.. I think there are many of us compulsive buyers out there that would greatly benefit from this.

Thanks!
Joe Zawinul
1932 - 2007
5 replies
Newbie
Jun 21, 2007
93 posts
2 upvotes
Toronto
Emancipated wrote: Thinking of putting a side a small jar of disposable income, contribute to it 5-10% of my monthly pay.
Good idea. It's called "pay yourself first". Let some fraction of your salary (5% or 10% or 20% or whatever you are comfortable with) go from your paycheck directly to the savings or investment account. Ideally, this money shouldn't even appear on your checking account balance :)
Deal Addict
User avatar
Jul 31, 2007
1938 posts
3 upvotes
Earth
1. First thing every month put 10% of your income in a savings account or mutual fund.

2. Use a spreadsheet or other software to track *ALL* your expenses for a couple of months. Every dime. Chances are that there will be something that you spend a lot of money on and you don't realize it. For me, it was going out to restaurants.
I'm not overweight, I'm undertall.
Sr. Member
Jul 20, 2005
691 posts
6 upvotes
Put every paycheck, every purchase, asset, debt into a excel sheet and see where the money comes from and where it goes to and how much is the networth. Is your networth decreasing or increasing. At what rate? Then you can decide where to cut the expenses.
Deal Addict
Mar 31, 2003
4250 posts
155 upvotes
Cambridge
It sounds like you save and then splurge. The good news here is you know how to save.

I think the easiest thing for you to do is to set a goal for how much you want to have saved at the end of this year, and next year, and so on. Save like you already do, but when it comes time to spend big, take a look at your goal, if you have met it then go ahead and spend whatever is over the goal.

The idea you have of putting 10% of your monthly pay aside for fun spending will also work, but I think your goal is not "how can I find money to spend", I think your goal is "how can I hang on to the money I saved".
Banned
Jun 19, 2006
9349 posts
57 upvotes
Some people find that being on the debt treadmill helps them save. If you buy some assets/investments that have a decent return, and make payments on money borrowed to buy those assets, you will, over time, accumulate equity.

Keeping a promise to repay debt tends to be more psychologically compelling than sticking money into the proverbial cookie jar every month.

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