budgeting
Money
Ditch The “Fake It Until You Make It” Mentality Concerning Wealth
9:30AM Azadeh Ensha | You can’t judge a book by its cover. You know this if you’ve watched a fancy vehicle pull up to a much-less fancy-abode. The takeaway lesson? Being rich and appearing rich are two very different things. More »
Make Your Budget Easier to Grasp with Targeted Accounts
8:00AM Kevin Purdy | Personal Finance blog Funny About Money tweaks the concept of a “freedom account”—a single stash for irregular-but-common expenses like car repair and clothing—and comes up with targeted accounts. That means opening up a money market or similar small account for each kind of expense, based on how often it occurs, rather than track a bunch of expenses from a big fund. For example, I look to the irregular little surprises that can happen at any time (plumbing or car repairs, vet bills, etc.), annual expenses (car and home owner’s insurance, property tax, income tax), and long-term expenses (purchase of a new car, about once every ten years; major repairs or renovations on the house, which I hope don’t happen more often than about once every eight or ten years). That way, the author states, big walloping expenses like car repair don’t throw off your budget and give you a clearer view at what you’re spending. Targeting your emergency savings [Funny About Money] More »Build a Dead-Simple Budget with a Shoebox
11:50PM Kevin Purdy | The Simple Dollar personal finance blog delves into household budgeting—something more of us should do, but are kept away from by fear of spreadsheets, math, and undue time commitments. Blogger Trent’s solution is simple and reliable, however, and takes only a willingness to collect paper and toss it in a shoe box. Collect one to three months’ worth of receipts, checks, pay stubs, and other paper records of money in and out, drop them on a floor when you’re done, and then arrange them however you’d like: You’ll probably find yourself shifting piles around and making new piles throughout this process, as you should. The goal is to find ways to group your spending that’s natural to you. Don’t try to force it to match someone else’s groupings – if a group of receipts or statements feel like a natural group to you, that’s how they should be sorted. More »
Build a Responsible Budget with the 60% Solution
4:00AM Adam Pash | Despite the content of his site, financial blogger J.D. Roth isn’t a budgeter—opting instead to follow what he calls a “spending plan.” But in the wake of some financial changes, he’s decided it’s time to build his first budget. His choice and suggestion for anyone looking to set up their first real budget is called the 60% solution, which allocates the lion’s share of your gross monthly income to committed expenses (like rent and car insurance), then divvies up the remaining 40% equally to retirement, irregular expenses, long-term savings, and “fun money.” The 60% solution, as Roth points out, is intended for recent college grads, but it should also work well as a starting point if you’re on your first budget. If you’ve already got a tried-and-true budgeting plan, share what works for you in the comments. Building Your First Budget [Get Rich Slowly] More »
Stick to Your Budget with “Reverse Credit”
9:00AM Gina Trapani | One way to save up for large purchases is to buy yourself gift cards in small increments in advance, says a reader at personal finance blog Get Rich Slowly. So if you’re saving up for an iPhone, for instance, buy yourself a $20 gift card to the Apple store every few weeks. Editor J.D. Roth writes: You can use “reverse credit” to save for more than just large items. You might use it to budget for your morning coffee, for example. If you want to limit your spending at Starbucks, put a fixed amount ($20 maybe) on a card at the beginning of the month. When that card is drained, you know you’ve spent your coffee budget. At the start of next month, put another $20 on the card. As J.D. points out, this method is similar to “envelope budgeting”, the classic method your grandparents used to put money aside for specific purposes. Use “Reverse Credit” to Stick to Your Budget [Get Rich Slowly] More »
Use a Separate Debit Card to Control Spending
12:08AM Kevin Purdy | Ramit at I Will Teach You To Be Rich shares a system his friend uses to set a firm amount of discretionary spending each month and then not spend more. It’s a take on the “cash in envelopes” system (represented digitally in programs like Budget, and it’s just as grok-able—when the money’s gone for the month, it’s gone. Obviously, you’d want to ensure you don’t draw serious overdraft fees, and you’d have to have a handle on your monthly budget to begin with, but it’s at least as effective as deducting credit charges as you go, and possibly moreso, with the thought of having a card turned down a nice social conditioner. For those with a fuzzy grip on spending, this technique could make the numbers seem pretty firm. How to use a separate debit card for discretionary spending [I Will Teach You To Be Rich] More »Give your financial wellbeing a checkup with 20 questions
5:10PM Sarah Stokely | Rather than just crunching numbers and spitting out a budget, The Simple Dollar blog suggests taking a step further back to examine your relationship to money.The article offers up 20 thought-provoking questions and suggests using a journal to record your responses and thoughts:
“it’s almost like self-therapy – you’re digging through the relationship
you’ve built up with money throughout your life and exposing the areas
that really need work.”
The questions including asking about ways you’ve attempted to control your spending in the past, how money is involved with your relationship to those closest to you, and asks where you want to be in five years and how you want to get there financially. Some of those questions are pretty challenging, but if you take the time to work through the list it could provide a pretty solid roadmap for where you’re going financially.
Reflections on Money: 20 Valuable Questions to Ask Yourself [The Simple Dollar]
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Save Money While Spending Freely with Reverse Budgeting
10:00AM Adam Pash | Weblog fivecentnickel makes budgeting simple by practicing the art of “reverse budgeting”. The upshot: Rather than setting precise budgeting constraints by category, reverse budgeting sets apart a specific amount for saving and the rest is all fair game for spending. If you’ve dabbled with lots of different budgeting systems but always end up abandoning your budget because you can never bring yourself to follow the exacting constraints of some budgets, a reverse budget along these lines might be just what you need. It’s not an unheard of idea, so if you’re a reverse budgeter, let’s hear your tips for setting up and sticking to a reverse budget in the comments. The Fine Art of ‘Reverse Budgeting’ [fivecentnickel] More »
Cope with Frugality Burnout
10:00AM Adam Pash | If budgeting was at the top of your 2008 resolutions, you’ve probably reached that one-month burnout point where you’re beginning to wonder if you can keep up the penny-pinching. Weblog Get Rich Slowly suggests several ways of coping with frugality burnout so you don’t fall of the thrift wagon. For example: Don’t try to do it all at once. Even frugality zealots don’t follow 100% of the things they write about. It’s important to choose a few ideas that work best for you, and to begin incorporating them into your life. If you’re big on budgeting, share your tips for how you cope with frugality burnout without going on a spending binge in the comments. How to Cope with Frugality Burnout [Get Rich Slowly] More »
