Planning My Spending, Part Two

16 12 2012

A followup post to “Planning My Spending

When Ayo and I were trying to save as much as possible there were plenty of things that I wanted to have or do that I avoided spending money on. But now I am not working. There is no saving going on – only spending – and I am making my own spending decisions. So, now what?

I don’t know whether or not I’ll start earning money in the next few months. I can see that happening, but I can also see my non-earning lasting at least another year. Another post on that will come eventually. It’s a bit weird to write, but I have a while to go before I start to become uncomfortable with my net worth.

A way too detailed budget (for me)

A way too detailed budget (for me)

In the meantime, here is how I am approaching my spending:

I identified a total amount that I am comfortable spending annually and broke that out by month. That monthly budget is loosely broken out into categories, each of which have rough dollar figures associated with them:

  • Rent
  • Charity
  • Utilities
  • Dining in
  • Dining out
  • Entertainment / miscellaneous
  • Scooter gas and maintenance
  • Personal and household items

Rent and charity are fixed. My lease governs my rent and I have decided to give away a certain amount of money each month. Although I can of course vary my usage, utilities come in around the same each month. The rest of the items are all variable and are well within my control.

When I first drew up my budget I had an idea of how I wanted to allocate my spending by category. I have since decided that such an approach isn’t helpful and I now track my spending within each category without concern for how my spending is allocated. Rather than decide on categories and amounts, I realized that prefer to analyze how I naturally spend my money and make decisions from there.

A great purchase - small, fun, durable and cheap!

A great purchase – small, fun, durable and cheap!

There is a good deal of room in my budget and I don’t expect to touch the cap most months. So far I have both touched it and fallen short. I decided that on months where I come in under budget I will give half of the amount under budget to charity, allowing myself to carry over the other half.

That’s my approach. I am allowing myself the things that I want within the constraints of a pretty liberal budget. I track every penny that I spend (Google Docs) and try to ensure that I don’t accumulate too much stuff. When I do purchase something I think about the amount of space it will take and whether I am (a) comfortable owning it long-term, or (b) able to sell or give it away on short notice. I take an active role in passively managing my money (yes!) and focus on experiences over things.

So far, so good.

posted by yair




2 responses

3 09 2013

When I originally commented I clicked the “Notify me when new comments are added”
checkbox and now each time a comment is added I get three emails with the same
comment. Is there any way you can remove people from
that service? Bless you!

8 09 2013

Good info. Lucky me I discovered your site by accident (stumbleupon).
I have book marked it for later!

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