Thursday, April 16, 2015

Avoiding budget exhaustion

I have been trying to get our family on a consistent budget for something like two years, and it has never really worked. My wife and I fell into a nasty little pattern in which I became the designated grinch and she the designated spendthrift. I think we broke through the past couple of months, finally.

Every couple - or indeed, person! - has to negotiate these things with/for themselves. But I have a couple of observations which perhaps generalize.

  1. If you think somewhat analytically about money, you may have internalized the idea that one of money's main purposes is to make more money. I think this is a good framing, but realize that although it seems obvious once you see things that way, most folks are more goal-oriented. For them, budgeting is best expressed in terms like "How soon can we move into a 3-bedroom house at this savings rate?" Just saving money to maximize utility is not intrinsically motivating for such folks, even if it is for you or me, the kind of person who reads personal finance blogs.
  2. Narrow the budget down to "elastic" items, i.e., things you have some control over. For us, that means: food, shopping (catch-all for most optional purchases), gifts, kid stuff, entertainment, utilities, and of course savings. Mint records all other transactions, and I categorize them, but I don't see the point of a separate budget line item for, say, our (flat monthly) internet bill. The only reason utilities is in there is so we do worry a little about saving electricity. Don't overload the non-budgeter in your family with non-actionable information about insurance premiums etc. (These things are worth discussing maybe twice yearly or something, but the rest of the time they should be invisible from your budget.)

1 comment:

  1. लोग जानेगे कि Dogma Soft DG Merchant Kya Hai और इससे लाखो रूपये कैसे कमा सकते है? इसमें रोयालिटी इनकम भी है जिसमे आप सिर्फ एक मेहनत करके हर महीने एक फिक्स इनकम प्राप्त कर सकते है.

    इसके लिए आपको इस आर्टिकल को ध्यानपूर्वक पढना है और इस प्रोजेक्ट को अच्छे से समझना है.

    Dogma Soft DG Merchant Kya Hai?

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