The significant percentage of people have problems with spend more money than they have, so they usually overspend.
To counter their overspending habit, the more prudent ones typically implement some sort of budget. I’ve never implemented such a budget, but my situation is a bit different that other!
My problem is I underspend!
So while most folks go to the store to go shopping and bring home bags full of items bought, I often come home empty-handed. Oh I’ll spend 1/2 to a full hour looking at the item I want to buy, but often in the end, I leave telling myself I’ll wait for it to go on sale, or that I’ll get the next newer model when it comes out. I’ve been doing this process for years with the flat HD TVs.
Some people would say: “Oh, you’re just cheap”, but those people don’t see what I spend on my kids. I’m much quicker to loosen the purse strings when the kids come into question versus anything else.
How Does My Wife Handle My Underspending?
Surprisingly very well, but then again, she is even more frugal than I am. So I’ll suggest something that we need and she’ll mildly question it, and I’ll then gladly, quickly backpedal, saving me the bucks!
While this is a positive for a financial perspective, it also leads to a less than optimized lifestyle that I’m trying to fix. I’ve been encouraging my wife go out during the day when the kids are at school to meet with friends for lunch once a week. She seems to enjoy this little (new) tradition.
Now that I have enough money generated from my Free Lunch Experiment, I might go out to lunch with people or friends, once a week too!
So that all said, with both my wife and I going out once a week for lunch, surely I must be spending more, but not so fast! You see, my wife has a small (around 8 hours total) weekly job, where she uses the money to spend on herself and the kids, so this doesn’t cost me. And the Free Lunch Experiment provides me money from the dividends so I don’t have to pay for those 1 or 2 lunches that I eat out once a week!
So I’m really not paying from my income either of the weekly lunch out sessions.
A Budget For Spending:
This is where a Budget for Spending would be ideal! The idea would be to determine that amount of money we want to spend on entertainment at the beginning of the year, and make a spending budget to make sure that money get spend on those goals. Of course, the money can come from any source (income, investments, dividends, money found, etc).
Thinking about it, I can imagine the following Budget Goals (Kids activities, vacations, entertainment, house projects, Gifts, etc).
Is there any readers out there that have “Nospenditis” like I do?
-MR
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That’s a new one! I had never heard of underspending before. You don’t splurge on yourself but you do the kids. So it balances out well.
Yeah, my family was extremely frugal, and spending money was a no-no. We actually had some hardships when I was very young and it just stuck with me…
I’m actually kind of surprised that I don’t mind spending money on my kids though. It’s like a free pass to spend when it comes to them. Luckily, my wife doesn’t have that free pass and she keeps me grounded in a frugal reality…
Ah, more optimization. Inspired by our yesterday’s post about you? You should know our standard response to that by now. One of these days you do need to read The Paradox of Choice.
We spend whatever we want at the grocery store and through Scholastic books but don’t tend to buy a lot of stuff otherwise. (Though when we decide we want something, we go to consumersearch, figure out which is the one we want, then do a search for where it costs least and purchase. We don’t do intertemporal substitutions.)
We talked about whether or not we should be spending more just for the sake of spending. Then we had the opportunity for a sabbatical if we were willing to take a year off from being paid, so we saved up for that. The time was worth immeasurably more than any stuff. And we wouldn’t have been able to do it without having had a big untargeted savings buffer.
So… no, I don’t think there’s a need to force yourself to spend. Money will find a home sooner or later. If not now, then when the kids are in college or if you get laid off etc.
The problem seems to be that you waste all that time deciding on the best thing to get and then don’t get it after all. Either make the purchase or don’t waste the time looking. Time is money.
Hmmm, I would say this is more of a tweak then an optimization… I’m just saying that I need to spend more because I was raise to be too frugal…
I do like reviewing magazined on product too. 🙂
I’m just saying that a budget could work both ways. If you don’t spend much on yourself, you might be missing out. So set a spending budget to keep yourself balance if you are out of balance on the miserly side. No one want to die being a miser (or at least I don’t).
Usually money is like air, it finds a way to fill whatever limit is set! 🙂
But in your case, you are lucky that you underspend MR!
Perhaps, but I have missed out on so great opportunities because I’m too frugal… I think it’s from having such frugal ways drummed into me from childhood (which is good, don’t get me wrong).
Yeah, we were talking about budgeting in more spending a couple weeks ago. I still think it is a fabulous idea.
I don’t want to miss out on opportunities that I passed because I was too stingy!
But I don’t want to go into debt either, so why not budget for spending only. I have no problem saving… 🙂
I think it’s a great idea that you are thinking of budgeting more for spending, enjoy life and being young! I learned that from my grandparents (although I never followed it until now).
Did you write this just for me? Yes, I have no spenditis, big time. I even forced myself to shop this weekend. My clothes were getting embarrassingly ratty (even the work ones) and I spent the whole winter without snow boots because I was too cheap to go buy a pair and we got about 50 storms this winter. My ankles got so frozen from sledding that I stopped going. (oh my poor kids).
I just mail ordered snow boots on Sunday so I’d have them for next season. It just got ridiculous.
I am really thinking of having a personal maintenance category where I spend a certain amount on myself and housewares every month or quarter. My kids complain about having to eat off of chipped dishes and I used a broken measuring cup for 8 months before spending $2 on a new one. It’s just gotten out of control.
I need to make myself a “needs” list and pick a couple of things off of it every month. Shopping is such a chore and I think that’s why I put it off so much. I just don’t enjoy the process or the time it takes to get stuff.
I think you come from a similar upbring as I did. So you are frugal by nature too 🙂
I’m glad to hear that you are following a similar path, why not enjoy life a little… as long as you can met your saving goals (which based on reading your blog I’m sure you can)!
Thanks for such a great comment, it’s good to know I have company!
I don’t adhere to a strict budget, I generally just spend where I have to. I save as much as possible on groceries, but I don’t just restrict myself to off-label items. Food is one thing I will spend on.
I have found the last couple years that there aren’t many ‘wants’ that I need to spend on. The biggest expense for us is our house, as there are many things we need to replace. (front door, driveway, etc.)
Food is a great think to spend on! Especially when raising kids!!!
I too have to spend on my house, but I’ve been putting it off… until now. The kitchen just had a new and fresh layer of paint applied. It’s looks great!!!
I can relate to your condition! I tend to underspend. In a strange way, my wife contributes to this simple lifestyle by not spending too much either. We make up for the underspending every other year with a major trip. We still try to keep the expenses low using miles for flights and getting the best deals.
We just started going on nice trips (we were stingy with those expenses too).
Your lifestyle sounds very similar to mine (or at least where I want to be)!
I don’t mind paying extra for great experiences via more expensive vacations!
I think I spend just right. 😉 I don’t have nospenditis.
We get $100/week allowance and can spend those anyway we want. If I want to save up for something, then I save the money. I haven’t spend much money lately.
The Mrs. is more frugal than me and I think she does have nospenditis.
My wife’s an accountant, so I think she probably thinks the same about me too!
We do pretty good with expenses, my problems is I’ll put off an expense that should be taken care of sooner than later because I know it will be costly to do so. Then instead of paying someone to do it, I do it my self. So far I’ve been lucky, but someday it will come back to bite me.
That’s actually a great idea, to create a spending budget. I’ll bet that in the end you might end up spending less than if you hadn’t budgeted a set amount. When I look at our spending patterns, I tend to underspend to balance out my husband’s overspending, so I guess it all works out. 😉
Sounds like a win-win! It’s good to keep a balance. My wife is much more frugal than I am, so it’s good to see her go out with friends for lunch occasionally.
I’ve already started spending more too. on Tuesdays. My son and I go out to eat and talk while my wife and daughter go to gymnastics class.
Budgets are really important for me, since I’m in college. However, I just cant seem to stop spending. It seems like we have contrasting problems.
I think it all has to do with the way you were raised. My entire family is pretty frugal, so it’s nature that I picked up their teachings.
I like the post. Many people have mentioned using the envelope system to budget their money. It is the same idea as yours but with envelopes. You budget your money for each envelope/category, and place the cash in each one. You only use the money for each category that is in the envelopes.
Crystal at BIFS does that, and it works great for her!
I only have reward credit cards, so I’ll use them instead, but I will keep a spending journal to keep track of what I use the credit card for…
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