Enforcing a budget

[Martha]

Maybe an internet vacation? Such as having one week a month where you do no discretionary shopping, no looking for deals. Maybe the two of you have become too good at shopping.

 

[twaddle]

Maybe an internet vacation? Such as having one week a month where you do no discretionary shopping, no looking for deals. Maybe the two of you have become too good at shopping.

That actually sounds pretty good. But it's too late. I already had the neural wi-fi implant put in. My mind has melded with the net.

Seriously, this is not an addiction, and it's not out of control. I'm just looking for a simple negative feedback loop that doesn't involve nagging or guilt trips.

 

[cute fuzzy bunny]

Seriously, this is not an addiction, and it's not out of control.

Come now twad...isnt the first step is to admit that you have a problem and are powerless to your addiction?

 

[twaddle]

Come now twad...isnt the first step is to admit that you have a problem and are powerless to your addiction?

I knew that was coming. Next up: "when did you stop beating your wife?"

OK, I'll try the credit card limit or paypal thing and see if that works as a non-fascist gentle budgetary reminder.

 

[Martha]

I am curious as to how it goes; let us know.

But if it is not a problem don't make it a problem.

 

[CuppaJoe]

Maybe an internet vacation? Such as having one week a month where you do no discretionary shopping....

I really like this one! I only go on-line at work which is a problem when I take an on-line class, but I know how to log on at the library. How would you advise me to continue this life-style?

My fifth grade teacher would have me write on the blackboard 100 times: I will not buy that laptop, I will not get a high-speed internet connection at home.

 

[FIREd]

But here's the deal. The breadth and depth of stuff you can buy over the net has increased a bunch. And it's only one click away. I see an increasing number of boxes arriving at our door.

I have to admit, I also like to shop online... It's so convenient and you can find so many cool things to buy on the internet nowadays! And If I was single I would probably get in trouble with that stuff. But then there is the enforcer: My wife! I better not overspend, otherwise there is hell to pay... So there you are, now you all know my real secret to "enforce" our budget...

 

[two4theroad]

Investment income goes into Vanguard spending account. Pension goes into "OUR" Checking account along with cash from Vanguard account to reach a predetermined amount monthly. Some money is transferred from OUR account to each one of HIS and HERS personal accounts. It is necessary that HIS and HERS receive an equal amount monthly!! We have 3 credit cards, OURS, HIS and HERS. OUR checking and credit card pay for all bills, auto costs, restaurants and other entertainment. HIS and HER accounts are for whatever we want other than necessary stuff (like gifts to family and each other)and when the money is gone, too bad. If too much money accumulates in the Vanguard account we purchase another index fund or fill up on one we are short on. If clothing is HER problem that would be one of the items that I would remove from the OUR account expenditures but be sure that HIS clothing also comes from HIS account. If she thinks HE spends too much on computer software then HIS account should pay for it. It is a negotiation until the boundaries are set but we have no trouble with this system.
2fer

 

[Darryl]

Twaddle, put the card down and slowly back away and your spending will drop by about 15%, before you know it you'll be talking real money.

We returned to the cash envelopes almost three years ago and we're having trouble finding places to stash the extra cash. We can't completely let go of the cards though due to the convenience items you mentioned. So rather than a "gold standard" we have implemented a "cash standard" if you want to make a charge go for it as long as you have enough money in the envelope gas? adult clothes? kids clothes? etc... once you make the charge move that amount of cash out of that envelope to the spent on credit envelope which is the base we use to start next weeks cash disbursements. No spreadsheets or calculations if you can count currency you can stay within the budget.

 

[W2R]

Twaddle, put the card down and slowly back away and your spending will drop by about 15%, before you know it you'll be talking real money.

We returned to the cash envelopes almost three years ago and we're having trouble finding places to stash the extra cash. We can't completely let go of the cards though due to the convenience items you mentioned. So rather than a "gold standard" we have implemented a "cash standard" if you want to make a charge go for it as long as you have enough money in the envelope gas? adult clothes? kids clothes? etc... once you make the charge move that amount of cash out of that envelope to the spent on credit envelope which is the base we use to start next weeks cash disbursements. No spreadsheets or calculations if you can count currency you can stay within the budget.

I don't think he can do it!

The average American is in total denial about their addiction to credit cards and obsessive shopping, in my opinion. Ever know an alcoholic (or smoker) who would say, "Sure, I can quit drinking (or smoking), but I enjoy it so I choose not to quit."

 

[cute fuzzy bunny]

I knew that was coming. Next up: "when did you stop beating your wife?"

Well?

 

[Sandy]

We have a monthly target budget, but month to month, it varies considerably, the total and by category (kid activities, paying for car insurance one month and not the next, etc.)

I only started tracking carefully last summer and figure that over the course of the year, it evens out - that is how I set my monthly target budget. The big stuff we agree upon, and most of the little stuff too.

 

[youbet]

So, the take-home message is that nobody really sets, tracks or enforces their budgets?

No...... everybody is setting and tracking budgets...... with no or little "enforcement" necessary.

If you need "enforcement" in order to follow your own plan, you have a personal problem with self-discipline in regard to spending. That's a hard one to help you with with just a few words of advise.

 

[Khan]

The pension goes into my checking account on the first of the month.

Recurring payments are automatic, groceries go on CC; about the 20th of the month I see what is left over after paying CC and any additional costs (dentist, veterinarian, plumber...), buy a thing or two on wish list if funds are available; on next to last day of month, transfer everything over $10 to MMA.

Usually in December I transfer some back to checking to cover charitable checks.

As long as outgoing is less than incoming I don't worry about the details, though I do track everything.

 

[Milton]

If you need "enforcement" in order to follow your own plan, you have a personal problem with self-discipline in regard to spending. That's a hard one to help you with, with just a few words of advice.

Exactly right.

 

[twaddle]

We can't completely let go of the cards though due to the convenience items you mentioned. So rather than a "gold standard" we have implemented a "cash standard" if you want to make a charge go for it as long as you have enough money in the envelope gas? adult clothes? kids clothes? etc... once you make the charge move that amount of cash out of that envelope to the spent on credit envelope which is the base we use to start next weeks cash disbursements. No spreadsheets or calculations if you can count currency you can stay within the budget.

Thanks! This is my favorite idea so far!

You wouldn't even have to implement this with real cash -- we could use monopoly money. For us, it's really just a matter of tracking. It's much easier to keep to a budget if you have a real-time handle on where you are in the budget.

For those who feel they need to scold me for my spendthrift ways, I appreciate it. I understand the discipline required, and the ethic of self-sacrifice in order to reach your long-term goals.

But we're living waaay below our means. I like a simple lifestyle, but we still indulge in certain vices. And we're loving it!

 

[Milton]

We're living waaay below our means ... but we still indulge in certain vices. And we're loving it!

Sure. I hear that. Good for you, well done.

But given the above points, this thread has been a complete waste of time. Clearly you don't have a problem, and you don't require advice.

 

[twaddle]

Sure. I hear that. Good for you, well done.

But given the above points, this thread has been a complete waste of time. Clearly you don't have a problem, and you don't require advice.

Huh? Are budgets only for savers? Doesn't your company have a budget?

We want to put an envelope around certain activities. We look at historical spending, and we say "let's try to keep this within this range +/- X%."

I asked how people checked themselves against their budgetary goals. Got some great answers. Stuff I imagine we can all use even if we have different motivations. Sorry if you felt this was a wasted thread, but I thought there was some excellent advice.

 

[haha]

Sure. I hear that. Good for you, well done.

But given the above points, this thread has been a complete waste of time. Clearly you don't have a problem, and you don't require advice.

Are you out of a Hawthorne novel?

Ha

 

[bssc]

OK, everyone. Relax and return to the topic of the thread. Or don't post.

 

[mb]

Have never made up a budget and doubt I could enforce it if I tried.

Me: Hi dear! Guess what I developed a budget so that we can LBYM!
DW: I DON'T NEED NO STINKING BUDGET! I MAKE $XXX/year AND I'LL SPEND IT AS I DARN WELL PLEASE!

I go about it from the opposite direction. First both 401ks are maxed out. DW also maxs out her employee stock plan. Automatic investments are made monthly into the kids 529s plans. Finally automatic after tax investments also go into various funds. This totals to a substantial fraction of our gross income. I figure that if we are doing ok on the investment side then the spending side is also ok. I guess this is the pay yourself first idea.

After R we may have to focus more on the spending side but for now I comfortable with it.

We are fortunate enough that for the most part we both seem to naturally LBYM. (DW does spend her money the way she wants but she spends a lot less than she makes so that is fine.)

MB

 

[twaddle]

Relax and return to the topic of the thread. Or don't post.

Mod, I thought we allowed off-topic tangets per the new community guidelines.

I think Milton has an interesting point. There are a lot of LBYM types here who might conclude that self-discipline and self-sacrifice is their turf. Budgets are only for goals that get you closer to ER.

But once you're ER, and the market has been good to you, what then? Throw discipline out the window? Shop till you drop?

In theory, we could party a bit more I suppose, but that's not us. One of the reasons for us to keep a budget is to keep us from drifting into a different lifestyle with different expectations and perhaps even a different ethic.

In fact, since the "pay yourself first" idea works so well for savers, one could even argue that a budget is more important for ERs than for wanna-be-ERs.

 

[Martha]

One of the reasons for us to keep a budget is to keep us from drifting into a different lifestyle with different expectations and perhaps even a different ethic.

This is heretical, but maybe you have too much money? Time to ramp up a gifting program?

 

[twaddle]

This is heretical, but maybe you have too much money? Time to ramp up a gifting program?

Yes, giving away a lot of money would definitely instill much more budget discipline at the Twaddle household, and yes, it is heretical.

With a potential retirement of 50 years (or even 80 years if we get really "lucky"), I want the fattest safety margin I can get. So, it's not just a love for an ascetic lifestyle that drives the budget. We have a lot of wiggle room, but we still want some budgetary discipline.

I'll let our 4-year-old deal with the gifting program when she's a little older.

 

[ladelfina]

I don't see why you just don't use ONE cc account with 2 names for online purchases if that's where spending is getting out of hand. Download the statements into Quicken. Establish a credit limit for the cc if necessary. At least you will see it all in one place on one statement.

Use cash or a checking debit card for gas, food, clothes and other everday stuff. Don't buy any of that on credit even if you have low rates or pay off the cards each month. Limit what's in the checking account since that's what folks usually do anyway, keeping the rest in savings or MM or brokerage. You can't spend "out-of-pocket" what's not in the checking account.

Isn't this just psychologically simpler? Who wants to track a whole series of CCs? Cut 'em up and pay 'em off. All you need are 2 cards: 1 credit, 1 debit.