Tuesday 26 February 2008

Boredom based budgeting

Last century I used to use Quicken to track my expenses and income down to the cent, but I haven't done so for about ten years (although one of my goals for 2008 is to start doing it again, mainly to make my tax returns a bit easier to complete). That meant that I was able to get an accurate view of a year's income and expenses and make a pretty accurate budget for the following year. However, these days I manage without having any formal budget (at least I haven't written one down on paper for years) as everything is running more or less on autopilot, I have sufficient sources of funds available to manage any peaks and troughs in income or expenses, and I know my overall spending for the year will be won't throw out my savings plan.

How do I know that my spending will be in control, without using any budget? By living a very boring, predictable lifestyle (some would say, contented and stable). I have relatively fixed expenses on rates, utilities, travel etc. and we tend to eat the same things for breakfast and lunch (I bring lunch from home, although DW tends to eat out a bit more often), and randomly cycle through a selection of fairly simple home-cooked meals for dinner. For entertainment I generally watch free-to-air TV, browse the web, or read investment books from the local library (or while browsing in a book store). We also spend some time gardening, or travelling to the local parks and beaches, and I don't have a lot of free time anyhow since I'm busy with the kids and doing some part-time study by distance education. Of course this only works because we don't make any 'spur of the moment' purchases, and we don't spend anything on restaurants, movies etc. and don't do much (any) "entertaining" such as dinner parties. It also helps that I'd previously accumulated a whole lot of "toys" (camera, video, telescope, scuba gear, skis, mountain bike etc.) over many, many years, so that I now have a garage packed full of "stuff" to play with whenever the mood strikes (and I have any spare time!). Since I don't even have any room to store more "stuff" if I did buy it, it's quite easy to just go window shopping and ignore any pangs of temptation to buy a new shiny, plaything.

Copyright Enough Wealth 2007


Stephen Colman said...

I've been meaning to comment on your blog for a while. Very interesting read, it's good to see someone in such high control of their personal finances, it's a rare instance in this "have to have in now" culture we seem to be in the grip of. That said, after reading this post, don't you feel maybe you're missing out on some of the spontaneity of life? Don't let accumulation of wealth be a governing force in your life. Everything in a balance I guess.

Keep up the great blogging.

enoughwealth@yahoo.com said...

I'm not a particularly spontaneous person by nature - more introverted and analytical. I do have "fun" - but it tends to be things that take preparation and training, like target shooting, cave diving and playing the bassoon and piano, rather than going out partying. I spend some of my time on accumulating wealth because I enjoy it as an intersting hobby, not because I need to attain any particular level of wealth.

Anonymous said...

I like you - Sometimes I feel like such an outsider for not being a "highly motivated consumer." I just don't get off on spending money. Hubby and I live well below our means and still enjoy a good quality of life. I personally like building up equity via savings/investments/real estate - but people are sometimes so put off that we don't:
Have cell phones
Pay for television
Eat out all the time
Shop - Shop - Shop

Thanks for making me feel like we are not the only "boring" ones out there!

Anonymous said...

My husband and I think the same way you do. However, there is a downside. If you mention to people that you are in control of your finances, they will inevitably 1) expect you to pay a greater share when going out as a group, 2) ask to borrow money, and 3)hate you for turning them down 4)be jealous of you for having more money than them. Sadly, it happens within our family very often. Long story short - it's best not to preach or flaunt it.