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What’s everyone up to this weekend? 🥳
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Anyone else into Bank Bonus churning?
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Think about how much you pay per day post tax. Your take home pay. If you get biweekly paycheck, divided the amount that hits your bank account by 10 (the number of working days in 2 weeks). That number is what you make every day you work
Any purchases you make, compare it with that number. Divide the number by 8 (for hours in a working day). Calculate how many hours or days it takes to pay for that item/service. Is it worth it?
Goals
I have specific CCs for specific purposes:
1. Dedicated to monthly bills.
1. Dedicated for food and basic needs.
And I have been doing fine for the past 7 years. 🙂
Here's how I distribute my paycheck:
70% - Investments.
10% - Savings.
10% - Bills.
10% - Everything else
So no matter how much spending urge I have, I can only spend <= 10% of my monthly. ¯\_(ツ)_/¯
Oliver - yeah, you should 100% move. Full disclosure here:
My mortgage is ~700/month. I found a 150k home in Jersey and ~45min to 1hr commute to NYC. So yeah, gtfo of NYC. 🙂
Prioritize expenses that have a high number of entertainment hours per $. Get into reading. Play an instrument. If you can make yourself a gym nut do that. $10 Netflix subscription >> $10 movie. Etc. It’ll vary by person. Buy that stuff first and you’ll have less time spent thinking about what else you want.
Also invest using something that will show you how the investment changes in a nice graph and check that a lot. The gambling instinct will kick in even if it’s just index funds.
Max out all retirement vehicles to reduce available funds and then start investing. Basically put the money out of easy reach.
Distinguish between wants and needs. You need shampoo but you do not need a new outfit.
Freeze your credit card in an ice block in the freezer and remove it from autofill. If you want to purchase something, you have to unthaw it.
I know this is a joke but I have a horrible habit of misplacing my credit card which makes it so much harder to spend money. So I can get behind the ice block idea.
Price your purchases in working hours. For example, if you want a new $1000 phone how many hours do you have to grind at the office to make that much. I started doing it and it stings like a b*stards!
Lovely insight PwC1.
Figure out what you roughly make per hour/day. Before swiping the card or clicking buy, do a loose calc in your head to figure out how much of your time something is going to cost you. Sometimes changing the perspective helps.
Whenever you get your paycheck, withdraw only the amount you budgeted for discretionary spending as cash with the rest automatically going into savings or food budget or bills. Then use the cash and when you run out you don’t have any money left to spend.
Direct deposit for spending goes into my checking. Everything else goes directly into savings.
Have you tried clearly defining your goals? Plan to spend instead of spending spontaneously. If travel makes you happy, set aside a healthy budget for that. But that might mean that you intentionally cut back on dining out if that doesn't bring you as much joy.
Everything is a trade off. You don't have unlimited funds. You Presumably aren't independently wealthy. If you spend an extra $5000 each year for 20 years instead of investing, that means retiring a couple years later. If you're okay with it, then that's fine. Figure what will make you happiest. And remind yourself of that decision when you plan out your spending.
I don’t believe in budgets - I set up automatic payment/withdrawal for all my investment goals at the start of the year ~50% (this started smaller and has increased with wage increases). I found this allows me to design my live around what’s left, while reaching my investing goals.
Interesting, i do something similar. I'm a super saver, so I spend less than 50% of my salary.
I will say that portioning out your paycheck is a form of budgeting. But it isn't the most efficient if your goal is to maximize savings. At least that is my case. I often find myself transferring money from checking to savings at the end of the month (in additional to what was already initially direct deposited)
That tells me that I'm not spending s set amount any month. Which means that sometimes I definitely am spending freely just because the money is there. BUT I think this makes me happier not having to say no to myself on buying something when I already know that I'm saving a ton.
Coach
Have a budget and stick to it
This. It will guarantee you save the amount you intend to if you stick to your budget.
I try to replace money on unnecessary discretionary expenses. So if I buy a tv or something I'll find a way to make more money outside of work. I'll also consider the utility of what I want to buy as far as how often I see myself using it or how much time I have to put into configuring it.
Spend it on stonks