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« Get Organized, Get Energized, Get Out Of Debt | Main | Facts on Billionaires -- And How to Become One »

July 11, 2007

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Right now I just budgeting "by the force" instead of sitting down and making a detailed budget. The line of thinking is that as long as I pay myself first (Roth, 401K, emergency fund, etc.) then I don't need to explicitly budget my spending. I still track all my spending in Quicken, so I know what is going where. Is this a common approach or do most people "give every dollar a job?"

Cory, I share your approach. I fund my savings, allocate debt repayments, set aside sufficient funds for regular and irregular bills, and spend whatever is left over. Which usually isn't much! But I took an approach to tracking my spending and then adjusting my behavior to change how much money ends up going into each category, rather than writing a fixed budget and limiting myself to a dollar amount for such and such category.

This is a great website, very informative and helpful to one who was extremely naive and disinterested about finances as a young adult in the 70s. You can teach old dogs new tricks and I am living proof of that axiom. Keep up the posts, I read this at work daily.

I also share Cory's approach. I put a substantial chunk of each paycheck in a 401k and I have a savings account devoted to irregular expenses. I'm lucky that my budging for those unusual expenses is less complicated than it is for most people -- my pay structure at work includes an annual bonus that is typically 20% or so of my annual compensation. I stash 100% of this in my savings account, and it seems to cover my big irregular expenses (and serves as an emergency fund in the meantime). All my monthly/weekly/daily costs come out of my bimonthly, regular paychecks.

There is one more thing to do with money. Build with it. Like saving it is accumulating wealth, but like spending it turns cash into assets, but appreciating income producing businesses.

I learned to save from my parents. I learned to tithe when I became a Christian. Even some of the financial guru's says it is good to tithe.

Spending money is something "caught" from your parents & surrounding people. I think if we know how to spend well, i.e. spend when we can afford it, spending wisely, a lot of people will be in better financial shape. Many people don't spend well, therefore they can't save.

ed

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