Drafting a plan for discretionary spending

I've decided to develop a budget.

This probably sounds strange coming from a guy who has been anti-budget all his life. Besides, haven't I paid off all my debt? Don't I have a positive cash-flow of over $1,000 per month? Yes, these things are true. But I've noticed something troubling: I've begun to experience that lifestyle inflation I'm always warning others about.

Lifestyle inflation is the natural tendency to increase our spending as our incomes increase. When we get a raise at work, we're likely to spend more at home. A little lifestyle inflation is fine. But there's a real danger of becoming too comfortable with increased spending. Once we become accustomed to a certain lifestyle, it's difficult to cut back.

Cracks in the Foundation

On our flight home from Orlando, Kris and I talked about my spending. It has increased in recent months. Some of this is deliberate. I've made a conscious decision to allow myself to spend more money on Wants. I can afford it. The trouble is that I've begun to spend indiscriminately again, and I'm afraid that's a slippery slope. I'll buy random magazines at the grocery store, or pick up a game for the Wii that I'm only half interested in.

I'm certainly not spending beyond my means, but I've begun to make more impulse purchases. I want to correct this now — before it becomes a problem. In the past, I've used a spending plan to help me meet my goals, and more recently I've been following the broad outlines of Elizabeth Warren's balanced money formula:

But sometimes broad outlines aren't enough. In this case, Kris suggested that a budget might help curb my impulsiveness, and I think she's right. With a budget, I can set specific goals. I can focus on the things I really want instead of just spending on random things that appeal to me in the moment.

So, I've decided to create a budget. Not a comprehensive budget — my Income, Needs, and Saving are all fine — but a budget for my Wants. I want to exercise discipline in this area so that I'm spending on things that are actually important to me instead of random stuff, stuff that ultimately turns into clutter.

Blueprint for Success

To start, I reviewed my discretionary spending from last year and compared it to the totals from the first four months of 2009. This is where tracking every penny you spend can prove valuable. By comparing my past spending to my present spending, I'm able to detect trends. It's very clear, for example, that I am again spending too much on dining out. Time to cut back.

Next, I thought about my goals. What is it that I really want to do? Lately, travel appeals to me. Kris and I both would like to take a vacation to Europe in 2010. To make that happen, I need to save. This gives me a medium-term goal to save toward.

Finally, I allocated a specific amount of money toward my monthly Wants. Remember, because I'm self-employed, I have an irregular income that passes through my business account first. If I pull out $2500 per month (after taxes) to act as personal income, that gives me $750 to spend on my passions. That should be plenty.

Note:Based on my Income, Needs, and Saving, I can afford to allocate $750 for Wants. This might seem high to some GRS readers. It would have seemed high to me once, too. But because I've paid off my consumer debt, I have $750 per month to spend on the things that make me happy.

Building the Budget

After collecting the data and setting my goals, I made a first pass at a budget. This is what I'll use for June and July:

  • Books: $50/month
  • Comic Books: $50/month
  • Entertainment: $50/month
  • Clothing: $50/month
  • Charity: $50/month
  • Dining Out: $200/month
  • Vacation 2010: $200/month (plus small windfalls)
  • Miscellaneous: $100/month

Obviously, you might make different choices. I know that many GRS readers are avid contributors to charity, for example, and I suspect few of you budget for comic books! These are the allocations that seem to make sense for me and my situation. I'm sure that I'll make changes to this budget as I work with it in the real world.

Actually, I have a lot of questions about how a budget should work in the real world. Because I'm a budgeting novice, I could use some help. I'm hoping that you experienced budgeters can answer some of my questions:

  • How often do you re-evaluate your budget? Do you make monthly adjustments? Quarterly? Yearly?
  • If you go over budget for a month, what do you do? Do you make immediate adjustments? Or do you simply try to correct things the following month?
  • What if I go under budget in a category? Does that mean I get to carry that money into the next month? Can I use it for a different Want category? (Perhaps sweep anything extra into the Vacation fund?) Or does does that money go to Saving instead? Or should I donate it to charity?
  • How do you track your spending against the budget? If I used the envelope system, I'd allocate the actual cash to each account before-hand. But what if I don't want to have that much cash around the house? Is there a good way to keep track of current spending in each category? Should I carry a notecard with my monthly spending on it? (That seems to be what Bargain Babe recommends.)
  • Do you try to further reduce spending on these categories? For example, should I try to drop my budget for Dining Out even more?

This is a strange new world for me. Over the past year, I've been pursuing more and more advanced personal finance subjects and concepts. Yet here I am, in better financial shape than ever, about to implement a basic skill I've never mastered before. That's okay. I believe it's important to continue focusing on the fundamentals even as we tackle more advanced topics.

My Discretionary Spending: Bits and Pieces

I want to talk about a couple of my spending habits. One is a worrisome trend, and one is a thing I'm doing right.

Food for Thought

Long-time readers know that Kris and I love to dine out. It's one of those things we're willing to spend on. We cut corners in other areas of our lives so that we can afford to make this happen. Still, I've been concerned about my restaurant spending for the past couple of years. It seems a tad excessive.

How'd I do last year? Well, my grocery spending dropped, but my restaurant spending went up again — a lot. Here's a look at five years of data:

  • In 2005, we spent $1423.39 to dine out 100 times, for an average cost of $14.23 per meal.
  • In 2006, we spent $1869.58 to dine out 108 times, for an average cost of $17.31 per meal.
  • In 2007, we spent $2051.93 to dine out 84 times, for an average cost of $24.43 per meal.
  • In 2008, we spent $2628.08 to dine out 77 times, for an average cost of $34.14 per meal.
  • In 2009, we spent $3443.61 to dine out 69 times, for an average cost of $49.91 per meal.

Holy cats! Will you look at those numbers? We're only dining out about half two-thirds as often as we were in 2006, but we're spending nearly three times as much per meal. At the current rate of spending growth, we'll be spending $300 per meal in 2015! Since I can afford our current spending — I'm not living beyond my means — the real question is: Am I getting my money's worth? I'm not sure that I am.

If I'm honest, I have to admit that I don't like the idea that we're paying $50 per meal. I'd much rather return to our former habit: Dining out more often, but spending less each time. To that end, I've been brainstorming ways we can work to cut costs:

    • We could do a better job of looking for discounts. We have an Entertainment book, and the local paper often features specials at local restaurants. We should take advantage of both of these. We used to do this, but have fallen out of the habit (primarily because we've become so used to eating at the same places again and again).
    • We need to find more cheap places to eat. Half the fun of going out is just going out. Sure, we love the fancy restaurants, but we used to be happy with Dairy Queen. (This is lifestyle inflation in action!) The real problem is that the cheap places I know and love (Cha Cha Cha and Imperial Garden) aren't Kris' favorites. We need to find cheap places we both like.
    • When we do eat in the same old haunts, we need to make an effort to reduce our spending. It's okay to have an appetizer, entree, dessert, and drink all in the same meal now and then, but we could save money by cutting one or two of these from the mix each time we dine out.
    • Finally, we should invite friends to our home for dinner more often. As soon as the book is done (getting close!), I'm going to make a habit of inviting one family to dine with us every couple of weeks. We used to do this a lot, but have fallen out of the habit. It's fun and frugal to have folks over for dinner.

So, that's one part of my financial life that still needs work. Next, let's look at something I'm doing right.

Tangent: Portlanders, help me out. What are your favorite cheap places to eat around town? Bonus points for inner southeast, West of 39th from Hawthorne south to Oregon City.

A Waning of Want

Here's something that amazes me: We're twelve days into the year and I haven't spent anything yet on personal expenses. I haven't even felt the urge. I've bought gas for the Mini and groceries for home, and Kris and I went out to lunch last Friday, but I haven't spent a dime on gadgets or books or games or toys or magazines.

“Big deal,” you might say. “That's how it should be.” You're right. But for me, this is a big deal. All my life, I've had the uncontrollable urge to buy Stuff. It used to be that I couldn't go more than a day or two without buying something. Even while writing this blog, that's been the case. (I've just learned to channel my desires into smaller, cheaper things.) Now, as last, I seem to have licked it.

I still want things — no question! — but I've become very good at ignoring the wants and moving on. How?

  • Sometimes, I just put down the thing I want, turn off my brain, and walk away. I force myself to stop thinking about it. (Usually by thinking about something else — like our upcoming trip to Europe, and how I need to save for that instead.)
  • If I still want the thing when I get home, I put it on my Amazon wish-list. For whatever reason, that's often enough to satisfy the strange inner workings of my mind. I feel comforted knowing I've let myself put it on a list where I won't forget it.
  • I'm very good about using the 30-day rule to control my impulse spending. My Amazon wish-list plays a role in that, but so does my mountain of index cards. (My life wouldn't be complete without index cards.) I have a handful of cards on my desk filled with notes about the things I want. It's amazing how many times I sort through this stack and end up throwing cards away because I no longer want the item I've written down.

These techniques help me deal with desire. They don't quell it completely — nor would I want them to — but they do keep it in check. That last rule is probably the most effective. By delaying purchases 30 days, I don't feel like I'm denying myself. I can still buy what I want if I want it 30 days later, but I'm not just giving in to impulse spending. (When 30 days rolls around and I do still want something, it actually feels pretty good to be able to buy it.)

My current spending moratorium isn't permanent, and I know that. In fact, the new Dick Tracy anthology comes out tomorrow, so if nothing else, I'll be shelling over $25 for that.

Remember: there's nothing inherently wrong with spending money on things that bring you joy. Problems arise when you finance these purchases with debt. If you're meeting your other financial goals and have money left over, it's good to indulge your interests and passions. Just make sure you're getting value for the dollars you spend.

A Look Back to Previous Years

I believe there are two components to building wealth:

  • Reducing costs
  • Boosting income

Doing one or the other can help you meet your goals, but to really succeed, you must do both. My goal has been to create a significant positive monthly cash flow. I've managed to do this. But as my income increases, so does the temptation to spend more. Have I been able to fight the urge? It's time for the annual review of my largest sources of discretionary spending:

Comic Books (2005: $2810.52, 2006: $3202.91, 2007: $897.08, 2008: $550.51)
Although I use comics as a prop for laughs at Get Rich Slowly, I've genuinely struggled with my spending on them in the past. Not this year. I made vast improvements in 2008, actually spending less on comics than I had planned. There are two reasons for this. First, I've narrowed my focus, collecting only those titles I most desire. I'm also making an effort to read all of the books I've bought but never finished. These two changes have helped me to spend less on this hobby.
Books (2005: $1049.91, 2006: $657.96, 2007: $702.73, 2008: $404.49)
At one time, I spent over $200 a month on books. Now I spend less than $40. I'm content with this number, especially since many of these are for our monthly book group. One reason my inclination to buy books has decreased is that I'm able to purchase personal-finance books through Get Rich Slowly, the business. (Plus authors and publishers send them to me for free.) This gives me a never-ending source of reading material, and makes me less inclined to spend time in a bookstore. And again, I'm trying to read books I own but have never finished.
Entertainment (2005: $478.81, 2006: $543.55, 2007: $1094.83, 2008: $897.91)
This number isn't as bad as it seems. It includes two Decemberists concerts for me and Kris, and it also includes some of our television viewing. (Remember that Kris and I cut back to basic cable, and now we watch TV through Netflix and through the iTunes Music Store.) There's also a one-time $236 event here that ought to have been a business expense. I'm not unhappy with my spending on Entertainment.
Pets (2005: $397.76, 2006: $471.03, 2007: $625.52, 2008: $378.75)
Many personal finance writers view pets as an unnecessary expense. To me, $35 a month to keep four cats is a bargain. It only costs me about a quarter a day for each animal, and they bring much more joy to my life than that. If Kris would let me, I'd be the “crazy cat lady” on the block. (Are there “crazy cat gentlemen”?) Note that our actual pet expenses are greater. Kris pays for their food, and that's not reflected in these numbers
Vice (2005: $1055.33, 2006: $768.95, 2007: $431.89, 2008: $924.79)
This includes wine, liquor, pipe tobacco, poker nights, etc. I don't smoke regularly, but I do smoke a pipe maybe a dozen times a year. Most of this expense is for alcohol at dinner parties and social gatherings. My alcohol consumption did increase during 2008, which is a concern, but that's not the reason for the increased spending. For the first time ever, we bought a couple of cases of wine. This will actually reduce the “wages of sin” in the long run, but it bumped the number for 2008.

Although this report is interesting, there are problems with my methodology. For example, I've included my grocery spending above (although it's not really discretionary), but have not included spending on exercise equipment (which is discretionary). Also, Kris pays for much of our grocery shopping. Because we keep separate accounts, her share of that expense isn't reflected in these numbers.

In order to be consistent from year-to-year, however, I've elected to continue reporting the same expenses in the same ways. You'll have to take my word that the figures here are representative of my spending as a whole. This annual report is sort of like tracking a stock market index, I guess. It doesn't reveal nuances, but it's still a useful indicator of the Big Picture.

So despite cutting back on the areas that are really important to me — books and comics — my spending increased. And most of that increase came from dining out.

How did you do on your spending goals last year? Are there areas where you wish you spent less? If so, what strategies do you use to keep yourself in check?

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cribcage
cribcage
13 years ago

Batman and Superman won’t pay for retirement. True enough – but the flip side, as you’ve said, is that tomorrow is promised to no one; and thus the real challenge isn’t just to build a secure, sufficient retirement fund (which, taken alone, would be easy), but instead to strike a balance between providing for tomorrow while enjoying today. I know how you feel, re: comics. I used to maintain a dozen subscriptions through my local store, plus whatever loose books I’d find when I visited monthly; and by the time I pulled out my wallet, I’d be carrying a pile… Read more »

Tim
Tim
13 years ago

So JD, what tool do you use to keep track of your finances and how does it treat you?

J.D.
J.D.
13 years ago

@Stephen I, too, am a trade-paperback purchaser. When I say that I’m buying comics, I actually bought maybe two real comic books last year. The rest were compilations: hardbound, paperbound, etc. I am particularly fond of comic strips, and buy these collections when I can find them cheap. It’s all comics, though! @Tim I use Quicken for the Mac. Now that I have an Intel-based machine, I’m going to dig up my old copy of Quicken for PC. This is one area in which the PC version is vastly superior to the Mac version. Both work fine, but the PC… Read more »

Andi
Andi
13 years ago

Music spending is a **HUGE** problem around here. My husband satisfies his cravings for an ever-changing rack of CDs by using LaLa.com and I satisfy my cravings by rifling through the music selection at archive.org. LaLa reduces some of our household clutter by ensuring that CDs that aren’t in rotation go out. You pay something like $1.75 for each CD you receive and you have to send one out for every one that you get. Archive.org has a large collection of live recordings from trade/tape friendly bands. Increasingly, the recordings are available in lossless format rather than MP3. All downloads… Read more »

MissPinkKate
MissPinkKate
13 years ago

$3,000 on comic books but you didn’t fully fund your IRA?!?!? Ugh, that hurts.

J.D.
J.D.
13 years ago

Tell me about it. I still have a few months to rectify the situation, of course, and I plan to do it. But it’s numbers like this that make a fellow sit up and say, “If I’m so smart, how come I’m so stupid?” 🙂

goldbug
goldbug
13 years ago

To decrease your book spending, you might consider joining paperbackswap or bookmooch. You won’t be able to get all the books you want there, but you’ll be able to get some of them.

MillionDollarJourney.com
MillionDollarJourney.com
13 years ago

Excellent post. It really puts things in perspective when you look at your expenses on a yearly basis.

I use MS Money and have been for the past couple of years. Have you ever tried MS Money? If so, how would you compare it to Quicken?

FT
http://www.MillionDollarJourney.com

Hermgirl
Hermgirl
13 years ago

I just wanted to say that I so know what you mean about comic books. They’re insidious: You get hooked into a story line, and you feel like you have to follow every thread and side-plot that that story line takes. Marvel was really good at this with the X-Men, I had a huge X-Men jones. They would make references to something and then actually put an apostrophy, saying “*To understand what Gambit is saying, check out X-Force 7” or something like that. When the story lines got too convoluted that it seemed like even the writers couldn’t follow what… Read more »

RJ
RJ
13 years ago

It looks like you have a lot to celebrate, J.D. Just how much of your income do you set aside for retirement, savings, and debt reduction every year? If it’s a large percentage, perhaps the expenses on comics and dining out aren’t so bad, after all. You can sock away up to 15 or 20% of your income–or more–but that means you still have money to blow for things that suit you. Some people spend a lot on travel, others spend on golf, others on clothes, etc. Ya gotta have some fun while you’re alive, y’know! Do you keep all… Read more »

sfmoneymusings
sfmoneymusings
13 years ago

Wow, I can’t believe you spent so much on books! I bought one writing book last month at full price but I justified it because the author offered to sign my copy after I emailed him and asked.

What about clothing expenses? I’m assuming you don’t buy clothes often?

Thanks for sharing such specific numbers and thoughts. It doesn’t make me feel so guilty when I enjoy the things I buy.

I’ve never tried that restaurant but I love Nikolas? or Nikolai’s in the East Burnside area of Portland. Their coffee is amazing.

Don
Don
13 years ago

Hmm…I do recall you getting a Wii…did you include that in entertainment? Just trying to keep you honest 😉

Peg
Peg
13 years ago

“Batman and Superman won’t pay for retirement.”

I do actually know someone who came up with the down payment for his house by selling his comic book collection.

Bobby
Bobby
13 years ago

“…Batman and Superman won’t pay for retirement.”

Like Peg said, I wouldn’t be too sure. It depends on which comics you are buying. There are some on ebay in excess of $1K each.

http://search.ebay.com/superman_Comics_W0QQcatrefZC6QQfromZR10QQfsooZ2QQfsopZ3QQftrtZ1QQftrvZ1QQsacatZ63QQsbrsrtZl

http://collectibles.search.ebay.com/batman_Comics_W0QQcatrefZC6QQfromZR10QQfsooZ2QQfsopZ3QQftrtZ1QQftrvZ1QQsacatZ63QQsbrsrtZlQQssPageNameZWLRS

Andy
Andy
13 years ago

The sin category is awesome!

George Burke
George Burke
13 years ago

The book savings category is HUGE. The average book consumer buying 3 new books per month pays close to $60 every month. Maybe buying these books isn’t necessary. BookSwim.com, http://www.bookswim.com, is a library book club service that allows book rentals, Netflix-style.

Ed
Ed
13 years ago

I have some comics to sell if you are interested 😉
SpiderMan/Mary Jane wedding
Groo #1 ?!?

I have a semi decent comic collection, but I have them all in plastic bags (after reading them of course). I had considered them an “investment” but that is only if there is someone else out there to purchase them from me.

As with selling anyting there needs to be soneone willing to buy at the price you want.

So is there a debt repayment category or are you out of debt (excluding mortgage)?

Dusitn
Dusitn
13 years ago

Hey J.D.

I like bestwebbuys.com/books for finding cheaper books. This site will search all the major online bookstores and ranks them for you (with shipping). I got through college this way and never paid more than $150 per term for books. You can save > 50% sometimes. Try it out.

Dustin

William Mize
William Mize
13 years ago

I love this post, J.D. It’s nice to see that no one is perfect in these categories. A few suggestions if I may, based on my own experience/shortcomings. – Books – I sell a lot on amazon.com. Last month, in three days, I sold close to $300 worth of used books on amazon. After amazon takes their cut, I will get about $200. Think about culling your herd and getting a positive cash flow coming back into your house. Also, my new book mantra is “Books are not trophies.” – Comics – I’m now down to ONE TITLE. “Ultimate X-Men”.… Read more »

Jared Rice
Jared Rice
13 years ago

I would be careful thinking that your Food budget will drop with the commencement of a wellness program. Although you may cut out some of the dining out (and that is expensive), there is a reason that people in this country are overweight – food that is good for you is expensive. Fruits, veggies, and good grains, always cost way more than the cheap stuff you can buy to fill your stomach (frozen pizzas, TV dinners, etc.). You can definitely save some money by cutting the AMOUNT you are eating (and any good wellness program should do this, at least… Read more »

Justin
Justin
13 years ago

I’m glad to see that I’m not the only one with a comic addiction. At the end of 2005, when I first started paying attention to my personal finances, I realized that throughout the year I had spent about $3500 on comics. It didn’t seem like that much until I realized that $3500 was over 10% of my income. Needless to say, in 2006, I severely cut back on my comic spending. This year I held it back to about $1500. A lot of that savings came from realizing that my local library carries a lot of new trade paperbacks… Read more »

English Major
English Major
13 years ago

Mmm, Paley’s Place. If you haven’t already (I bet you have), you should stop in at Wildwood sometime–it’s right across the street. Do you really get a chance to read $50 worth of books a month if you’re also reading comic books and watching $50 worth of Netflix DVDs and iTunes downloads? I’d love to see some sort of estimate on the cost per hour, if only to see how many hours you estimate you’re spending this way. It sounds like you have more fun than I do! It seems to me that here is a good place to adopt… Read more »

brad
brad
13 years ago

I used buy a lot of books, and I kept the ones I really liked because I figured I’d read them again sometime. But as the years rolled by it became clear that I’d never get around to re-reading them. Same goes for DVDs: I own 23 DVDs and have never watched any of them more than three times. What a waste! When I emigrated to Canada four years ago I had to prepare an inventory of everything I owned and its value in Canadian dollars. That motivated me to cut my book collection in half, and that was so… Read more »

Giania
Giania
13 years ago

Aye! take heed to the other commenters here and don’t worry too much about your comics. If you take good care of them, some of them could end up being an investment of sorts. Especially if collect perennially popular series. Some of the comics you have may already be worth more than you paid for them, because of the limited release nature of comics. So what you might want to consider is purging your comics archive once in a while. Sell off some of the ones that might be kind of rare, but something you aren’t likely to read and… Read more »

Roger
Roger
13 years ago

JD, it’s none of my business, but does your net worth include real property or just liquid assets? If the former I’m doing OK, if the latter, well, not so hot.

J.D.
J.D.
13 years ago

Roger, that’s a good question, and one I hope to delve into in the future. Without going into the whys and wherefors: My net worth includes real property and associated debt. It doesn’t include any of my wife’s finances, however, or any of the assets/liabilities that she tracks. (Remember: we keeps separate finances.) Because I track the house and the mortgage, it’s in this number. I figure as long as I’m staying consistent with which numbers I’m using, I’m doing okay. At some point, in preparation for a future entry, I’ll actually sit down and computer our household net worth,… Read more »

dimes
dimes
13 years ago

Those must be some great comic books! Maybe there’s a Comicreaders Anonymous?
Aside from that, don’t feel too bad.

Covert7
Covert7
13 years ago

Oh wow, a fellow (young!) pipe smoker! How very rare these days! I know it’s not really related to finances, but do you have a local tobacconist that you have access to or do you get your leaf from the Internet?

When I saw that, I just smiled and thought “Yeah, his personality does seem like a pipe smokers.” 🙂 Take it easy JD and may you enjoy at least a couple of good smokes this winter season!

matildaben
matildaben
13 years ago

You’re lucky to spend such a small amount on your pets. When my late cats were alive, I had to lay out a few hundred dollars every 3 months for testing and treatment for a chronic condition in an elderly cat, and both of my current, younger cats have had to have emergency surgeries to the tune of about $3000 each.

Kurt
Kurt
13 years ago

My wife and I signed up for paperbackswap.com in December. It has been great so far, I’ve sent out 6, and requested 7, exchanging books I didn’t want for ones that I do. My wife has sent out a bunch and picked up 6 books that were on her Amazon wishlist for a cost that works out to around $2/book.

Greg Williams
Greg Williams
12 years ago

Gino’s is quite good. Eating out was probably one of our biggest downfalls last year. My wife and I love to eat at China Delight and Queen of Sheba. Not to mention half a dozen other places. My personal downfall was board games. Funny that I keep stumbling onto blogs that turn out to be written by Portland residents. How odd.

Greg

Jim_W
Jim_W
12 years ago

The most useful point (to me) in Rich Dad, Poor Dad was the concept of categorizing things as assets or liabilities by his definition. Basically if the thing brings value or drains you. I place books under education in my budget and don’t think a grand in books is bad at all and are categorized as assets. Your Sin category could be categorized as a liability if a guest gets a DUI, that comes back on you, or from the health factor point of view. But you could argue it’s an asset too socially, networking, etc. Good job on not… Read more »

Stephanie
Stephanie
12 years ago

Thanks so much for being brave enough to share that kind of information with us. I think it takes a lot of courage: You’re not just speaking in vague terms about “I decreased spending in this area of my life last year”, you’re giving us actual numbers! It’s hard to do, but I think such habits will increase accountability. I think a lot of people would benefit from having a partner to divulge EXACTLY (down to the penny) how much they spend on certain areas.

Ernesto
Ernesto
12 years ago

You should start blogging about comics; then you could shift that expense into the business column.

Andy Didyk
Andy Didyk
12 years ago

I’ve been lurking on the site for several years now, and I just wanted to say thanks for sharing this information. My wife and I are doing our budgets for this year, and it’s always good to hear about someone else’s success.

RacerX
RacerX
12 years ago

One of the best comments that you have said is that “there’s nothing inherently wrong with purchasing things that bring you joy. But problems come when you finance these purchases with debt.”

You just need to make sure your needs are taken care of before you go on to wants, then desires!

Great post!

Mrs. Micah
Mrs. Micah
12 years ago

Your drop in comic book spending is particularly admirable, congratulations. Ernesto’s idea is kind of cool unless you think it’d lead to more spending problems. But you do so well with your blogs anyway that maybe when you cut back from your full-time job you might find time for a comic one.

Megan
Megan
12 years ago

JD,

Have you ever looked into using a website like Paperback Swap to obtain new, used books for just the cost of shipping? This has helped me to greatly reduce my spending on books.

And I love that you have a category called Sin, I got a good laugh from that! 🙂

Mikell
Mikell
12 years ago

Congrats on bringing down the spending. The Decemberists’ show should be pretty awesome… I’m jealous!

Dividends4Life
Dividends4Life
12 years ago

It’s impressive you tracked all that. The closest I come to something I track is “Entertainment” (which includes eating out). It went from $2,016 in 2006 to $3,870 in 2007.

Best Wishes,
D4L

Heidi
Heidi
12 years ago

I did this exercise fot the first time last year and was astounded at how much my fiance and I spend to feed a family of two ($10k – but that includes alcohol and food for dinner parties for friends). This year I’m starting an ‘entertaining at home’ category so I can see exactly how much we spend on the get-togethers we host. You did a great job keeping your pet care costs in the ‘reasonable’ category. I only buy my dog toys, my partner takes care of the vet bills and kennel expenses – I bet we easily spent… Read more »

Jordan
Jordan
12 years ago

I’ve seen the Decemberists in concert several times, the first few times I was lucky enough to see them for $9, $12 and $15, the next time they came to town (Montreal, Canada) it was more along the lines of $30. I sadly missed that show. Their increase in popularity is good for them, but bad for my wallet.

KC
KC
12 years ago

I hate to think what I spend on my 80lb. Golden Retriever. He’s 11 so the vet bills are going up with his age. At his size he’s not cheap to feed. But we don’t spoil him much with toys or treats so those costs are low. But the benefits are something you can’t measure – my blood pressure actually dropped 8 points on average after we got him about 6 years ago. He has brought my husband and I closer because we walk him together and talk about our day. We’re exercising and laughing so much more now that… Read more »

MoneyChangesThings
MoneyChangesThings
12 years ago

Do you buy your books used? I love http://www.fetchbook.info where you can compare prices and find the lowest price.
Also – since your blog has wide readership, you should be able to finagle reviewers copies. My husband is an academic and you wouldn’t believe what a boondoggle it is for getting books, most of which we donate to their library anyway.
ANd… you can resell the books. A lot of them, I’m sure you’ve found out, are not very useful.

J.D.
J.D.
12 years ago

Re-reading this entry, I see that there’s a little bit of ambiguity. I say that my spending last year was half of what it was in 2006, yet the numbers at the end of the article don’t reflect that. What I mean to say is that my overall spending was sliced in half. Discretionary spending is just a part of that.

Re: The Decemberists. This will be the third time I’ve seen them live. Should be fun! 🙂

Faculties
Faculties
12 years ago

I’m a little bit boggled by your numbers still. $702 on books — that’s $7000 over the course of ten years. If you have to own them, have you tried buying them on Half.com? I was shocked to find I really could buy anything I wanted at half price or less — sometimes 75 cents. Of course, the library is free even for personal finance books. And if they don’t have them, interlibrary loan is free too.

Christine
Christine
12 years ago

J.D. Though I don’t have a problem with debt, I enjoy reading your column as it helps keep me focused on using my money wisely. I do have a question about this analysis. When I see these real world examples I often wonder if the amounts are for a household, a couple, or an individual – who may be part of a household or couple. In your example some of the totals look like they are couple expenses (food and maybe sin)and some look like they are particular to you as an individual(comic books), and some I’m unclear on (books… Read more »

Sam
Sam
12 years ago

I was working on this over the weekend as well and posted my numbers in the GRS personal finance forum under annual expenses.

I have some trouble figuring out what is discretionary and what is not. Books, eating out, gifts are all, charity, are, to me, discretionary. But what about dry cleaning, clothes, and vet bills for the dog? I think a $1000 dress is discretinary spending within the clothing category but are clothes, in general, discretionary?

I guess my question is as follows: are all spending choices beyond the very basics of food, shelter, clothing, insurance, transportation discretionary?

Amy
Amy
12 years ago

Off topic, but The Decemberists are AWESOME live! I got to see them perform with the Baltimore Symphony Orchestra, and it was seriously one of the best concerts I’ve ever been to.

Jordan
Jordan
12 years ago

I’ve been chronicling my spending on a “private” blog since December, I’m having a hard time breaking it down so much, I buy beer when I buy groceries often, so my beer spending often gets lumped into my grocery spending. Do you go through all of your receipts individually? and Do you use any sort of computer program/website to help you keep track?

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