I feel like I have complete control over my impulse spending and yet still get the excitement of shopping for cool random things and experiences.
Details:
I put $100/week into my "luxury" account and use this money to buy anything other than regular food/expenses that comes up.
This means my regular supermarket trips, haircuts, bills, membership fees, etc... don't change at all. I already budgeted carefully for these and I keep good track of them using my credit card as a buffer.
However, if I want to buy a new computer monitor, a pair of shoes, a nice pen, go on a trip to California, go out for dinner, etc...I charge this to the luxury account (charge it through my credit card to get rewards, but pay the bill with the luxury account). The only change in my behavior is that as I make a decision about whether to buy something, I check the account and see if I have enough money to do it. If so, great, I do it. If not I don't. No deliberation, no feeling it out and deciding if it is worth the expense, the money in that account is mine to spend without anguish.
Note: My personal financial focus right now is grad-school. $100/week represents a pretty small luxury allotment compared to my income. I am saving/investing in excess of 60% right now with the intention of either letting the investment earn interest while I'm in grad-school or buying a house near grad-school that could gain equity.
This has had the immediate result of reducing my spending at very little perceived change to quality of life. Long-term, I can now write out my exact financial roadmap and tune it to make fixed goals, i.e. making a certain down payment on a house 8 months from now.
Submitted January 26, 2017 at 03:26PM by bduxbellorum http://ift.tt/2k6yjYe
