Budgeting help please.

[TanksHill]

Well for me if I can live without it it's a want. TV was a want. Electricity is not.

I don't have a lot of extras. So my budget is very basic.

It's just a rule of thumb. Helps you realize if you are living beyond your means.

For example on the above list the Fun Money, Personal, Recreation would all pretty much be wants. If you don't have enough for your needs, food, housing, medical, taxes, you probably shouldn't be spending on the want items.

It's just a guide line.

 

[tortoise]

I guess it depends on how essential to life something is? Food = need. Car = want. ??

 

[Marianne]

I guess it depends on how essential to life something is? Food = need. Car = want. ??

For most of us, a vehicle is a need. Maybe it's more NEW car=want?

TanksHill, that was pretty basic and I like it. Since we're on commission, budget never was something I entertained for very long. My system was (and still is, I guess):

Bills first - pay down debt as fast as possible, but basic ele, etc paid first
Wants - once in a while, not often. Thankfully we enjoy simple things.
Savings - whenever possible, always thinking ahead of taxes and insurance premiums. Yeck.

 

[patandchickens]

I don't know as it's possible to have a hard and fast dichotomy between 'needs' and 'wants'. I mean, a car is not a TRUE need for most people, but most "need" it in the sense that they WANT the things that a car is somewhat of a prerequisite for (a salary of the sort you get by having a job you have to drive to; the ability to go shop whenever and more or less wherever you want; etc)

In the most basic sense, the only needs a human being has are food/water sufficient to sustain life, clothing and shelter sufficient to prevent you dying from exposure, and some means of protection against things trying to kill ya. Perhaps you could argue it should also include sufficient companionship to enable "adequate" happiness (which varies greatly among people) and someone with whom to reproduce.

But most people would not be real thrilled to have ONLY those basic biological needs met, especially if you've lived your whole life about a zillion orders of magnitude more comfortably than just bare-bones survival. So we speak of other things as "needs" too, like electricity or a salaried job. And indeed in many ways those are awfully nice things to have and certainly not as arbitrary or luxury-type as other "wants" such as a Gucci handbag or a vacation villa in the south of Spain, or even just a restaurant meal

So it's complicated.

Pat

 

[freemotion]

Entertainment fund? Clothes fund? What the heck are those??

That's when you clean your car and find $5.62 in change and so you have enough to buy a new pair of jeans on sale at the Goodwill

I hear some people use couches to store their clothing and entertainment funds.

Jeans AND a shirt!!!

 

[freemotion]

Needs vs wants....this is how I look at it.

Needs are food (only nutrient-dense foods are in the need category), clothing (clean and modest, not necessarily fashionable....and just enough items to get me from laundry day to laundry day....anything else is wants) and shelter (mortgage or rent, insurance, maintenance, etc).

Other items: If I can justify that it will save me money, make me money, or at least break even on a need purchase that is on my list, I buy it. If not, I don't. For example, I just got an incubator. It cost me the same amount as my chick order last year.....10 meaties and 15 layers. We lost most of the layers, and broody hens aren't doing enough to keep up with the hawks. So if I get only 25 chickens from this incubator, it has broken even, and I know I'll get more than that, since I get the eggs from my own flock. I'll get turkeys, too, I hope. I've seen goose eggs advertised locally on craigslist in the spring, cheap, so I may get some of those, too, who knows? That purchase is in the need category since it will cover a need and then some.

I've cut out almost all food-on-the-road purchases...those stops at a convenience store for a snack or bottled water while driving for work. I have actually stopped, parked, gone into a store, and come back out empty handed by talking myself out of purchasing....my new mantra is "Tolerate hunger. Tolerate thirst. You are only (so many minutes or an hour) from home, when you can eat and drink for a fraction of this price." My travels that tempt me the most are the horse farms and the school, and all have water coolers/heaters so I always have supplies to make tea in my car and in every bag and in my forms holder for my horse days, and fill up before I leave each place. It is far easier to drive by a convenience store or drive-through while sipping a full double-mug of tea.

It took a while to change my habits, but it was really about changing the conversation in my head. I used to say to myself....I am making this much money today, so I can easily afford to buy food and drink. But the reality was, in that conversation, I didn't remind myself about my budget. I save a significant amount this way and no longer feel deprived, as my internal conversation is different....I congratulate myself and count the dollars I am saving and tell myself how much more delicious the stuff I made is over what I could be buying....and nutritious.

 

[TanksHill]

Free, you seem to talk to yourself a lot!

 

[LovinLife]

Free, you seem to talk to yourself a lot!

I always wonder if we should worry about paying our CC and Student Loan debt off before putting money away for Savings/retirement.

 

[AnnaRaven]

Free, you seem to talk to yourself a lot!

I always wonder if we should worry about paying our CC and Student Loan debt off before putting money away for Savings/retirement.

Your credit card debt is costing you probably 16% or more every month. The best savings account is running less than 1.5%.
If interest rates rise, they will on your credit cards too.
Think of it this way:
Every dollar you out into savings gets your 1.5 but loses you 16. For a net loss of 14.50. Before inflation.

Definitely pay off your CC debt. Putting something aside every month toward an emergency if you can while paying off CCs, do that. But your best money move is to get out of debt. Then keep the CCs open but maybe freeze the card in an iceblock so you don't use it, that way it's avail for emergencies.

 

[LovinLife]

Free, you seem to talk to yourself a lot!

I always wonder if we should worry about paying our CC and Student Loan debt off before putting money away for Savings/retirement.

Your credit card debt is costing you probably 16% or more every month. The best savings account is running less than 1.5%.
If interest rates rise, they will on your credit cards too.
Think of it this way:
Every dollar you out into savings gets your 1.5 but loses you 16. For a net loss of 14.50. Before inflation.

Definitely pay off your CC debt. Putting something aside every month toward an emergency if you can while paying off CCs, do that. But your best money move is to get out of debt. Then keep the CCs open but maybe freeze the card in an iceblock so you don't use it, that way it's avail for emergencies.

Yeah that's kinda what I was thinking. Credit cards are bad!!!