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April 02, 2007

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8% investment? where? how? what?

Geez, i'm losing. :(

If the daily splurges do make your life better, then go for it... but if it's just a $5 latte from starbucks, you don't have to cut morning coffee completely. Brew it yourself or grab it from dunkin donuts for $2 and you're effectively saving $3/day.

Tanya: Generally the stock market over the long periods of time returns 8% or bettter.

Tanyetta, don't feel so bad, the $10 a day over 40 years is only about $200K after inflation - and less after you pay taxes on the investment gains. Still, it would be nice to have an extra $175K, wouldn't it?

My rule remains the same: don't spend money unless you're getting good value from it. Which is not the miserly pinch-pennies-until-Lincoln-screams-in-agony strategy it sounds like. It simply means shedding expenses that don't add much to net happiness, and finding ways to get more value out of the ones that do.

I find that the only way I can keep on top of this is to give myself an allowance each month. Then I can fritter away the money on whatever I like but it doesn't affect my overall goals. I have been known to spend nearly all of it within a few days at the beginning of the month and then I'm left eating toast for the rest of the month. But at least I don't waste any more money.

I'd rather spend $5 a day on stuff than trying to not spend anything with a house costing 50% of income. Because one slip and it's over.

I still don't understand how anyone can enjoy a $5 cup of coffee.

@ LAL - me niether. I feel bad when I "slurge" and buy a large pop in the morning for $1.25.

Dh and I also get our "personal fund money" at the beginning of each month. $50 each to cover anything the budget doesn't already address. So lattes at Starbucks, computer programs, cross stitch supplies, etc come out of our "personal fund." It can accumulate month to month in case we want to save for something bigger than $50. We can blow all $50 on candy if we want....no questions asked. One month I used my fund to buy my daughter a Sonicare to help brush her teeth with her braces. It was my money to do what I wanted with and that's what I wanted to do.
Once the $50 is gone, it's gone. :)

Oh yeah. I totally agree: it's like not fixing the dripping faucet and then finding out later on that you've lost hundreds of gallons of water in the course of a month.

Good post; one of my carnival picks this time around.

People think that little things don't add up but clearly they do. Most often people do not think twice about making these purchases. That's why tracking your expenses is so important so at the end of a week or month or year, you will really see how much you spend. (It's not budgeting per se, simply spend as you do and see what it adds up to be). It's quite enlightening. Try it. Then make the decision whether a $5 coffee is really that tasty.

I used to get anywhere from 1-2 sometimes three large mocha frappacinos a week. Then I started looking at what I was spending. Just one a week with the value of a dollar I was spending $20 a month on coffee. Two or more a week well...you see the point. Now I have maybe two a month. Just today while grocery shopping, I ordered a small instead of a large. Still coughed up $3.75. I'm in the mode of disciplining myself and though I am getting better, it's still not easy. One thing I have been good at though is I haven't had a credit card in twelve years at least. Don't need em' don't want em'. I'm trying to put into much better practice, if I don't have the cash it doesn't come home with me.

I say if all your ducks are in order then it's ok to splurge, just don't abuse your wealth

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