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This article is about Spare Change
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I don’t know in what alternate universe Ms. Singletary lives in, but I can’t fathom exactly how most working parents are only going to budget one percentage of their income to childcare (and have that include travel as well!), or for that matter, how anybody without fairly good company policy is going to budget less than six percent of their income for health insurance.
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While I really liked the idea of percentage budgeting, I have to admit that looking at their figures was pretty scary. I’m glad they mentioned that it could vary widely for individuals.
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The problem I’ve always had with percentage budgeting is that as income goes up, spending does too, ‘automatically.’ By working entirely with fixed numbers, when I get a raise, I’m not instantly thinking “Okay, my housing percentage went up, so now I can get a bigger apartment,” or “Ah, I can drive an extra hundred miles a week on my new gas budget!” If you’re happy with your current standard of living, why spend more just to stay within a particular percentage range?
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The childcare %s are definitely absurd. Particularly if that is also the same category as entertainment & travel. Uh, no choice about paying for childcare, unlike entertainment & travel.
Also, I thought the savings % too low & the personal debt too high – but then I guess the budget is one designed for people paying down balances, in which case you’d want to pay down the debt before flipping more money over to savings.
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Michelle Singletary is a fraud. I’ve listened to many of her NPR reports and it always sounds like she’s making up numbers in her head. How she gets so much airplay is really a mystery.
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I’m trying to guess how someone could think these numbers are good. And I thought: family with a stay-at-home parent. Then the “childcare” just means occasional babysitting, and then maybe you only need one car (the stay-at-home parent can drive the other one to work and then keep the car all day). Still, 1% for everything fun, and 21% for food?
I looked up Money Management International to see if I could find any bias, and all I could see are that they help people with debt relief. So, I guess when you are at risk of bankruptcy, it makes sense to budget very little (but still some!) for fun.
I notice that if you add up the debt (14%) and the savings (7%), you get a pretty nice total (21%) to apply toward savings once your consumer debt is paid off. And that’s about the percentage I save.
I spend more like 20% on miscellaneous, though–14% on short-term fun (movies, lessons, music, parties, gifts) plus 7% on long-term fun (travel and expensive toys like computers). To make up for it, I spend much less than average on housing (small house) and transportation (old but reliable car). I pay more for insurance, more for utilities, and less for food than indicated here, even though I do eat out occasionally and am eating more organic and whole-grained foods than I used to.
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