{"id":3620,"date":"2009-04-15T05:00:10","date_gmt":"2009-04-15T12:00:10","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=3620"},"modified":"2019-11-13T20:38:52","modified_gmt":"2019-11-14T04:38:52","slug":"the-per-diem-system-an-easy-way-to-budget-your-spending-money","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/the-per-diem-system-an-easy-way-to-budget-your-spending-money\/","title":{"rendered":"The per-diem system: An easy way to budget your spending money"},"content":{"rendered":"
This article was written by Spencer<\/b>, a GRS reader in New York.<\/i><\/p>\n
As a guy who just finished paying off $14,000 in credit card debt, I wanted to share one tip that helped me get over the bad debt hump. I allocate my spending money on a per diem<\/i> system. At the beginning of each cycle of my monthly budget, I set aside funds for:<\/p>\n <\/a>After allocating this money, I go to the bank, withdraw the remaining funds in cash, and divide it among envelopes for each day of the month. Each day, I open an envelope and add the day’s cash to my wallet. For me, the physical parceling of the cash is an important psychological step.<\/p>\n I tried just having the cash on hand and doling out the right amount each day, but I kept dipping into it whenever I was in a pinch. By investing a small amount of work in the division of the cash, dipping into my reserves makes me feel like I am undoing<\/i> work instead of just taking an advance.<\/p>\n My all-cash diet keeps me honest about my spending habits.<\/b> When I started, I allocated one amount for Monday through Thursday, and double that amount for weekends and holidays. I have more leeway in my cash flow<\/a> after paying off my credit cards, so now I just have one flat rate for each day.<\/p>\n Here’s why I like my system:<\/p>\n The most important thing I have discovered using a per diem<\/i> system is to be honest about your actual monthly expenses.<\/b> It’s better to add an item to you monthly budget and reduce your per diem<\/i> than to try to shoehorn in a recurring expense. For example, smokers should budget for cigarettes and not pay for them out of the per diem<\/i>. The per diem<\/i> is meant to only pay for expenses that you cannot otherwise predict.<\/p>\n It’s better to have a low per diem<\/i> (when I started I could only afford $12 on weekdays) than to regularly wipe out your per diem<\/i> with recurring charges. In the long run, that will just frustrate you and make you feel perpetually broke.<\/p>\n J.D.’s note:<\/b> Each of us has our own unique approaches to money management. We develop our own tricks \u2014 or money hacks \u2014 to circumvent our personal weaknesses and to help us meet our goals. If you have a personal money hack you’d like to share with GRS readers, please drop me a line. Photo by chrisdlugosz<\/a>.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":" This article was written by Spencer<\/b>, a GRS reader in New York.<\/i><\/p>\n As a guy who just finished paying off $14,000 in credit card debt, I wanted to share one tip that helped me get over the bad debt hump. I allocate my spending money on a per diem<\/i> system. At the beginning of each cycle of my monthly budget, I set aside funds for:<\/p>\n\n
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