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  1. #11
    Senior Member ptgatsby's Avatar
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    I don't budget, but I did track my expenses in great detail.

    Budgeting is not very effective at anything except cost estimation. Most people use it as a way to set hard limits on their spending but this tends to result in sub-optimal utilization of money.

    The real goal is to optimize utility. For example, we spent something like 800-1500/month eating out. That's a lot of money, and the question isn't if we should budget a lower amount (because we want to save), but if we'd rather eat out less and take more vacations. Relating costs helps constrain spending better than limiting yourself.

    Anyway, I had spreadsheets that tracked all expenses, then balanced it against income and savings. Same concept as any business accounting. It gave me an idea how accurate I was. I also used it to check credit card bills, etc.

    It actually helped quite a bit in making decisions later, like should we move to a nicer apartment and lose that bit of money. It's much easier to visualize what you need to sacrifice when you have the data.

    Kinda stopped tracking it when we spent all our money to travel around the world. It also changed my view on saving. I'm not a big fan of saving anymore. Seeing so many old people with money, but no energy left to enjoy it, was very sad. Not to mention, they seemed no happier for it. (All this within reason, of course.)

    I also tend to be a model builder and more data is always helpful.

    Quote Originally Posted by Jennifer View Post
    Anyway, this all taught me to live with a lot less than I was used to, and be far more tight and directed with my money. It's not my natural mode and I can't maintain it forever, but it taught me to be more prudent and think more long-term. My normal budget is a "fuzzy" one -- i have my recurring expenses figured out and how much is left as "fuzzy money" and then I kind of play it by ear.
    Budgets are pretty useful in these dire situations. It's a real shock how hard it is to survive in these cases... and at the same time, a shock how far money can go when you are pressed to the limit. Because it has to. Many people never experience that feeling.

    But whatever discretionary money we all end up with is normally best spent doing what we enjoy the most. Humans are normally pretty good at knowing that! It's the whole "pay down debt, save for retirement" that really has very little value to us at the time that is hard to do.

  2. #12
    @.~*virinaĉo*~.@ Totenkindly's Avatar
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    Quote Originally Posted by ptgatsby View Post
    The real goal is to optimize utility. For example, we spent something like 800-1500/month eating out. That's a lot of money, and the question isn't if we should budget a lower amount (because we want to save), but if we'd rather eat out less and take more vacations. Relating costs helps constrain spending better than limiting yourself.

    ...It's much easier to visualize what you need to sacrifice when you have the data.
    Yes, I agree with that. I view life now (after this experience) more as a matter of priorities: Since I'm not Bill Gates or a MegMillions winner, pretty much if I do one thing, I can't do something else. So I think in terms of, "If I eat out tonight, I can't really eat out over the weekend, and if I don't eat out 3-4x, I can afford to buy [whatever] that I would like to have, so what do I want the most?"

    It's MUCH easier to not spend money on one thing you want in the moment, when you know that if you save it, you can get something else you want a little further on that you will have with you.

    The bad cycle starts when I eat out AND spend the money to buy something else, when I really am just going into debt and spending money I don't actually have.

    ...Budgets are pretty useful in these dire situations. It's a real shock how hard it is to survive in these cases... and at the same time, a shock how far money can go when you are pressed to the limit. Because it has to. Many people never experience that feeling.
    Yeah. It was kind of scary to me, but it helped me to realize what I really NEEDED vs just badly wanted.

    It's helping me mentally to prepare for weight loss. All that I really need to do to lose weight is (1) don't eat when I'm not hungry and (2) burn some calories consistently. But it's amazing how much I just FEEL like eating something or DON'T feel like exercising for 20 minutes... it feels almost undeniable, yet all I really have to do is make myself do something or not do something ... it's a choice.


    ...Seeing so many old people with money, but no energy left to enjoy it, was very sad. Not to mention, they seemed no happier for it. (All this within reason, of course.)

    But whatever discretionary money we all end up with is normally best spent doing what we enjoy the most. Humans are normally pretty good at knowing that! It's the whole "pay down debt, save for retirement" that really has very little value to us at the time that is hard to do.
    yeah, that's what I'm feeling too. I want to have enough money that I can actually survive when retired, but I don't see the point in living miserably in the now for a future that might never even happen. We only really live in the "Now" moment anyway, it's where we exist, so our existence should be meaningful. (Note that meaning and money are not synonymous, though.)
    "Hey Capa -- We're only stardust." ~ "Sunshine"

    “Pleasure to me is wonder—the unexplored, the unexpected, the thing that is hidden and the changeless thing that lurks behind superficial mutability. To trace the remote in the immediate; the eternal in the ephemeral; the past in the present; the infinite in the finite; these are to me the springs of delight and beauty.” ~ H.P. Lovecraft

  3. #13
    Senior Member Tiltyred's Avatar
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    I suck at money management and am overdrawn nearly every other month. I don't worry about it too much -- twice a month, my employer dumps some more money in the account and I'm all good again. Things like the mortgage payment, car payment, utility bill, 401k payment, and flex account money come out via auto-deduction, leaving to my discretion what to do with the rest. Sometimes I feel virtuous and pay the bills. Sometimes I feel self-indulgent and buy perfume and jewelry. My credit score fluctuates. It bothers me not. I would like to do better than this but I never seem to get around to it.

  4. #14
    i love skylights's Avatar
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    Quote Originally Posted by The Iron Giant View Post
    Since my eight year old still refuses to manage the money in my household


    My style of budgeting is pretty low-key, since I tend to save money by nature. I try to work around 30 hours a week, as long as school allows it, try to spend reasonably, and pay my credit card off in full at the bank a week or so before it's due. I haven't even bothered to register with the online account service yet since I rarely check it. Most of my money is spent on "experiences", especially travel.

    When I was working 40+ hours a week and not in school I spent a lot more. Now I have to be more restrictive. But it's cool, I've adjusted. I'm also working on saving money to start a 401K. It's been harder since moving out of my parents' place and going back to school, but I'll get there soon. I did just get my money market data for the year and I made a tiny bit on that, yay.

  5. #15
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    Yes, when money is spent on something. That isn't very often, so I don't have to do a lot of work here.
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  6. #16
    Senior Member cafe's Avatar
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    I have a fairly accurate idea of our expenses from repetition. I struggle with a lot of bad habits that come from chronic poverty. Statistically, we're low-income, but we live in a low cost of living area, so we're doing okay right now, but we don't have much of a safety net.

    If we have anything like a strategy it's:

    We try to keep fixed expenses low:
    -paid cash for a crappy house and make what major improvements we can afford with each tax refund
    -cars are paid for, make repairs as needed
    -don't use credit for anything: if we don't have the money to do it, we don't do it
    -we have a grocery buying routine that reduces the temptation to eat out
    -regularly scheduled weekly date night that averages $30, including generous tip

    Keep taxable income low (among other things, helps kids be eligible for scholarships and the lunch program at school)
    -we buy the best health insurance husband's employer offers
    -we max out our medical savings

    savings (this is something that is a challenge for me)
    -we have an automatic withdrawal of $40/wk from husband's check go into separate account for emergency fund. It is in his possession because money burns a hole in my pocket
    -I just started a $20/wk withdrawal schedule for Christmas savings
    -husband is now eligible for 401K at work. we will up our contribution once we have a few $K in the emergency fund (it is going to be awhile before he is vested anyway)

    Because our fixed expenses are pretty low, it's usually not hard to pay utilities, etc, so I just pay them as they are due, trying to spread them throughout the month so they don't all pile up on one payday.

    If my husband has an extra good paycheck we buy the stuff we can't always afford, like clothes, haircuts, etc
    “There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.”
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  7. #17
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by Jennifer View Post
    It's helping me mentally to prepare for weight loss. All that I really need to do to lose weight is (1) don't eat when I'm not hungry and (2) burn some calories consistently. But it's amazing how much I just FEEL like eating something or DON'T feel like exercising for 20 minutes... it feels almost undeniable, yet all I really have to do is make myself do something or not do something ... it's a choice.
    It's a bit off topic, but weight loss is more about diet. Health goes with excercise, but ver few lose weight by excercising. We adjust our need for food whenever we burn calories. Of course, you get more benefit from excercising than dieting

    Its actually a good analogy for budgeting. Few spend less by budgeting but most people will spend less by tracking expenses. It's like tracking calories/food diary. If you associate calories as the "cost" with food, not money, it becomes much easier to lose weight. Tracking expenses makes us focus on the cost and then links the cost to the activity. Or, put another way... it makes you suffer for eating/spending, and negative feedback reduces the activity!

    I say this as I sit next to a costco sized chocolate bin and a bag of potato chips.

    yeah, that's what I'm feeling too. I want to have enough money that I can actually survive when retired, but I don't see the point in living miserably in the now for a future that might never even happen. We only really live in the "Now" moment anyway, it's where we exist, so our existence should be meaningful. (Note that meaning and money are not synonymous, though.)
    Certainly within reason.

    Another reason, for myself anyway, is that technology is decreasing the cost to enjoy life so dramatically that sometimes I wonder if we are actually in a deflationary spiral. I don't really need to spend money for discretionary things anymore. Even when I do, the cost for everything keeps dropping so fast. It doesn't matter if I'm streaming music, watching netflix or reading e-books. Besides rent, food and utilities, I could survive fully entertained forever. And none of it requires me to be paying the astronomically high amount I am currently paying, hah.

    I would use blizzard's hearthstone as an example (since I just got into the beta, finally). Many solid games are going f2p, and if you just enjoy playing...

  8. #18
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    Money comes easily to me, I like it, it likes me and we hang out often. I've never had a budget because I find the more you watch a budget and see the money slipping away the more stressed you feel. I work on a set and forget system of money management. I work out what it costs me to reasonably live via this formula...

    Regular bills + food + eating out once or twice a week + nice things to buy once or twice a year = reasonable living expenses.

    Then I get my entire pay put into my savings account and set up an automatic debit for my weekly expenses into my account with a card attached. I spend whats in my card account and forget the rest exists. If I over-run my card account consistently I revise my living expenses. If I've got money left overr its mine to spend however I choose.

    Using this system I save on average 35% of my after tax income a year. It doesn't seem to matter too much how well paying my jobs are or not I still manage to amass fair amount of savings within short periods of time. I'm a big believer it matters more how good you are with the money you've got than how much money it is you make.

  9. #19
    royal member Rasofy's Avatar
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    My basic needs are kinda spartan, so saving money is somewhat effortless.

  10. #20
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    I use my credit cards because I hate carrying wads of cash around. It's also easier to fix losing a credit card by reporting it lost or stolen (God bless you, Android apps)...if Iost cash, i'm probably never gonna get it back.

    In the case of budgeting, I never really felt the need for it, as I tend to at least break even at the end of the month, and I have my credit cards set to pay themselves. I don't like to think about things like budgeting...I've got more important things to worry about...like spending...and investing.

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