When I prompted Stackers to share about their budgeting habits, I wasn't expecting a flurry of responses. But my simple question generated such a well of deep sharing that it appealed to the investigative journalist within me. I wanted to consolidate your responses and install some form of structure in hopes that this might help some individual out there.
There are two types of people in the world: those who budget and others who don't. @go replied with a resounding YES while @Satoshis_Code replied with a tentative Roughly. On the other hand, @kytt doesn't keep a budget but feels that he should. @BTCFC used to keep a budget, but now that he feels empowered via Bitcoin, he feels he no longer needs to.
Let's discuss the WHY behind budgeting first. What prompts some people to budget and not others? As someone who studied Finance in school, @TNStacker may be known as the budget guru in his real life. He budgets not only for himself, but for organisations where he volunteers. Perhaps he is accustomed to the need to customise and manage the variables for varied contexts. I guess he must like being methodical.
Other people may not have a finance background but will attest to the power of budgeting. @Undisciplined shares how budgeting helped him achieve various financial goals during his undergraduate days when he had to live off the income he gained from a 20-hour weekly job. Budgeting helps him to be proactive and feel in control of managing his limited finances then. The need to exhibit control was also the impetus towards @TheBTCManual's budgeting practice. He noticed that his savings were getting depleted and turned to budget so that he could deploy funds towards investing.
@nullama has what I feel a novel way of thinking about money. He calculates his hourly/daily/weekly/monthly wage and compares it to his daily/weekly/monthly expenses. I think having your hourly wage written down and staring at you in the face makes you super conscious of the life energy you are exchanging for an activity. Should make it easier to say nope to things that distract you from your long-term goals. After all, time is the most valuable currency we have.
When you are clear about your motivations for budgeting, finding the most appropriate way will require some experimentation but shouldn't be that difficult. @2d uses the popular tool called "You Need A Budget". @q used to use the envelope budgeting method but now turns to https://actualbudget.org. If you want to know more about the envelope budgeting method, you should check out Dave Ramsey's course (2006). After all, this is what instructed @dayOldDonuts on how to use only cash to pay for his transactions. He used to go to the bank and get different denominations of cash so that he could fill up his envelopes accurately. If this sounds like too much work for you, however, In any case, the trusty Excel file works - @criptopanas uses that.
I need to attend to my children soon, but before I end off this musing on an abrupt note, I just want to highlight how important it is to be self-aware of your inclination. If you budget but the one whom you love doesn't, is it a deal breaker for you? @grayruby and his wife seem to have worked out an arrangement that works for them. If neither you nor your partner does budgeting, someone has to be in charge of tracking and eyeballing the family's expenses so that you can release some pressure off the accelerator pedal when the family is burning through their money a bit faster than you would like. @Undisciplined might have some first-hand insights to share with you on this.
Sending 69% happy sats to @siggy47 who is maintaining several territories for our collective good.
I budget. I was using an excel spreadsheet to do everything then this new year I tried YNAB as suggested by @ek I used it for a month and thought this app is very confusing and takes too much time to get everything started. I almost gave up on it but I found it every useful to track how and where my money goes. The budgeting feature I’m still lost on how to use but it’s great for tracking expenses and then running reports.
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Yes things work well for us but I would like to teach my wife a bit more about finance, budgeting, saving, investing in case something ever happens to me.
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Financial education is a very interesting topic, that's why you got so many answers. I downloaded a excel template from the web site Mr. Money Moustache and I customised it to show some more personal info.
I added my personal portafolio and I could know how far am I from the FIRE number.
If you don't know about Financial Independence Retiretment Early and the formula behind, here is a very short explanation.
In order to reach the FIRE number you need to know your monthly expenses and multiply this number by 300.
When you reach the FIRE number, they say that you could withdraw 4% of the portafolio to pay your expenses, and you'll never consume your capital.
IMO it's a very good topic to explore.
Don't be afraid to calculate your FIRE number. It's a good goal to set.
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Calculate FIRE number then adjust for inflation? If I want to retire in 20 years, assuming 15% inflation, that would be 1/16th purchasing power in 2 decades.
(Rule of 72, divide by inflation rate and that is when money is cut in half, every 5 years at 15%)
Multiply monthly expenses by 300, then multiply by 16 (to retire in 20 years). I’ll need $100M, which is about 4x what I thought I would need.
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Do you know the story, the richest man in Babylon?
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Great book.
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What is the moral of the story?
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The moral of "The Richest Man in Babylon" revolves around the principles of disciplined saving, wise investing, avoiding debt, continuous learning, and making decisions based on careful consideration rather than impulsivity.
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Save 10 percent, get by on 90 percent
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Pay yourself first
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Save 10 percent first
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Incorporating this behavior is key, but it is the budgeting that can get one here, so I say the opposite. Budget first, which will allow you to see how you can save 10% and still live and pay bills.
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63 sats \ 0 replies \ @go 9 Mar
Book to consume: Profit First by Mike Michalowicz
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Invest half and develop half βœ”
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0 sats \ 0 replies \ @q 9 Mar
Hehe this feels allot it was made with chatGPT. It starts to feel that majority of what you read on these kind of communities are more and more generated stuff.
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Most excellent post, sir! Great summary and share of valuable info. Of course, as one of the proponents of budgeting, I would think that, right!? 😁
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stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.
stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.