I don’t track anything. Income, outcome… nothing. I just buy whatever I want, with a sorta fifth sense on how much I can “safely” spend.
Budgeting? Tracking spending? I don’t need that kind of stress.
So far it’s worked out O.K., I guess.
I hate financial stuff. Just leave me alone and let me spend my money where I want to.
I forget where I heard this, but it’s true: When most people say “I wish I had a million dollars,” what they really mean is “I wish I could spend a million dollars.”
I have @We_re_wolves_not_werewolves money and I still wouldn’t buy a $30k. In fact I just bought a used BMW for less than $23k. And the only reason I bought a car at all was because my 15 year old Ford Taurus became undriveable. But fuck it. I wanted to get a car I actually enjoy driving instead of another utilitarian shitbox I drive into the ground.
While I’m on the topic, it just doesn’t make sense to buy a brand new car. I paid cash for my car and I’m free and clear financially while my friend who bought a similar make and model around the same year is still paying it off.
My normal lifestyle is about $2,000 less than my income. I have a very simple life. I check my balances now and then, but I can pretty much buy what I want. I don’t have a high income either.
For me, the real advantage of having enough money is not buying things, since I have enough stuff to last me the rest of my life, but to be able to throw money at a problem.
Example: when we were visiting my daughter’s house, my wife’s car battery died (in their driveway, at least.) We were able to call AAA and buy a new battery without trying to find the best deal. Ditto for a new fridge when ours was dying, and an additional small garage fridge to tide us over until the real one got delivered.
totally agree. Cars are not investments, they are depreciating assets. Buying new fancy cars every couple years is one of the best ways to ensure you will never get ahead financially
I have never been good at any of that stuff, even when we’ve been tight for cash, I have never budgeted in particular.
But as a general rule I use is: would this save more money than I would get paid, if this was a contracting gig and I was getting paid my hourly rate to do this thing? A lot of things like clipping coupons I think you actually make you a lot less per hour than minimum wage. Of course this is used as justification for not doing something I wasn’t going to do anyway, so make of that what you will
On the other hand, if you’re just sitting around reading the paper or a magazine and you come across a coupon… As opposed to driving out of your way to save a couple of cents a gallon on gas, when you might actually be costing yourself dollar to save a quarter.
We have enough in the bank to cover 6+ months of living expenses. However, I still check my balance and transactions almost daily. Don’t want to find out months later that someone has gained access to our account or skimmed our cards.
For us, we stopped tracking our budget after I got a new job with a 40% raise. That pushed into the lower-upper-middle class. Most things, other than new car purchases or expensive vacations, do not require any forethought.
My credit union has an option where I get notifications of credit card purchases according to my preferences. So any on-line purchase, any out-of-country, and any over $20 trigger a text. This has enabled me to catch fraud a couple of times within minutes.
I think the limit to tracking expenses is too high for me to picture. I have a 93 year old neighbor whose net worth is 2-3 million US dollars. She had a window with a medium-sized crack in it, which she duct-taped together rather than buy a new window.
The dear woman is resourceful in ways that don’t involve depleting funds. I figure that if I had that kind of balance, I would still make similar choices.
We tried that for a while. We put everything we can on credit cards for the points, so the number of notifications got to be too much. I am also a control freak that likes to keep track of things.
Being old but not that old, I think the issue might be not the money, but the hassle in finding someone to come and fix the window. You have to search somewhere - and she might be good online, then schedule it, then worry that the repair would be good. If the duct tape seems good enough, while does she need the aggravation.
I have a list of things that don’t really need to be fixed, and don’t affect our life at all, but which I’d be happy to get a good handyperson to do. We had one but he moved. The money is trivial.
I probably sailed past the point I could have stopped tracking every penny and still kept doing it for another couple income increases. It’s a habit borne of legitimate worries and tends to become an ingrained habit.
But there did come a point when I stopped making a new entry in the Excel workbook of how much I had in the bank account and all the bills I had to pay, to make sure I wasn’t going to queue up payments that would exceed my bank balance.
I have always tracked every penny, not because I have to, but because it’s printed right next to the dollars, which shows up just to the right of all the hundreds, and those I do need to track. So I copy/paste the whole number into a spreadsheet.
As for spending, I don’t ever need to check how much money I have. I only check if it’s worth it, and that’s all in my own subjective head. It’s not really tracking pennies. It’s valuing them, I guess.
So here’s something I came up with that might help not having to micromanage your budget.
First of all, I automate as much of my finances as possible. My paychecks are direct deposited into my checking account and 401k each month obviously. I pay for everything with a credit card so that it tracks every purchase (I also get cash back on it). Nearly all my bills are set up to auto pay each month. I have a separate savings account where every couple of weeks, a certain amount of money is transferred from checking to savings.
My bank has overdraft protection so money is taken from my savings account to cover overpayment in my checking account.
So my checking account is effectively my operating account where I only need to keep enough money in it to cover my bills each month. My savings account becomes a sort of combination sweep account for storing extra cash up to about 6-12 months salary. Above that, I then look for something to invest that money in (stocks mostly).
About once a month, I update Quicken as well as an Excel workbook I created to get a snapshot of my finances and make sure everything is in order. It’s all highly categorized so I know what and where I spend my money.
So the part about not having to micromanage every purchase. Do a budget and see where you spent your money for the past year to estimate your future spending patterns. Subtract known fixed expenses like rent/mortgage, cable, internet, streaming services, electricity, phone, etc. Subtract average spending for more variable but regular and relatively stable necessary purchases like gas, commuting costs, lunch, etc.
What you have left should be how much cash you have left for random stuff like unexpected car repairs (assuming you didn’t account for this already), coffee, dining out, a new book, whatever. Then divide this by the number of days (or weeks) between paychecks.
So let’s say that number is $50 a day or $350 a week. Then you know that on any given day, you don’t have to think about a purchase of less than $50 because it’s not going to impact your budget. Or if it’s a bit more than $50, you can be like “I didn’t make an unexpected purchases yesterday so I’m still good”.
It depends. My understanding is that after covid, cars are depreciating less. Especially Japanese cars known for reliability.
EVs and luxury cars depreciate rapidly and its better to buy slightly used. But if you want a toyota or Honda, buying it new vs slightly used isn’t as big a savings as you may think nowadays.
A toyota or Honda may only lose 25-30% of its MSRP after 5 years, so a 30k car goes for 20k after 5 years. Thats 2k a year, which in the grand scheme of things isn’t a big deal considering the car’s lifespan is probably 20-25 years.
However if you want to buy a Lexus LS, its best to buy it used. The new one may be 90k, and the 5 year old one may be 40-50k.
Cars have always been an depreciating loss.
For me, it’s more about finding a balance between finding a car that’s fun to drive vs paying a fortune for it.
Well, it’s certainly better to buy a used car with money you have than a new car with money you have to borrow. But if you have enough money to buy a new car without a loan, and you want a new car, then it does “make sense.” I’ve purchased used cars a few times, they all had some issues. New cars aren’t perfect, but they’re at least not something some pevious owner wanted to get rid of.
We’ve had both new and used vehicles over the years. My Sonata was purchased new 14 years ago. I’m on the brink of 225K miles, shooting for at least 250K. Our pickup was a year old with under 15K miles when we bought it in 2010. It’s still under 80K miles - no, we don’t drive it much.
I prefer to buy new so I know that the vehicle has been cared for properly and meticulously. So I feel like the depreciation isn’t an issue since I plan to drive my Sonata till it (or I) dies. I don’t recall what we paid for it, but I’d say that it was well worth 14 years of dependability. And it helps that we’ve got a great car guy to service it.
My husband was stuck in the mindset that you need to be rid of your car before it hits 100K miles. I’m on my second that’s gone over 200K, and I drove three that went over 100K. I think he finally conceded that with regular maintenance, a vehicle can be expected to last much longer than 100K - he says he’ll hold on to his Santa Fe rather than trade it in early. We shall see.