Comments on: Don’t Sweat The Small Stuff: Another Way To Find Room In Your Budget For Retirement Or Other Savings http://www.thesimpledollar.com/2007/02/04/dont-sweat-the-small-stuff-another-way-to-find-room-in-your-budget-for-retirement-or-other-savings/ Simple, applicable personal finance advice for the modern world Sat, 21 Nov 2009 15:46:38 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Debbie http://www.thesimpledollar.com/2007/02/04/dont-sweat-the-small-stuff-another-way-to-find-room-in-your-budget-for-retirement-or-other-savings/comment-page-1/#comment-5218 Debbie Mon, 05 Feb 2007 14:35:16 +0000 http://www.thesimpledollar.com/2007/02/04/dont-sweat-the-small-stuff-another-way-to-find-room-in-your-budget-for-retirement-or-other-savings/#comment-5218 I really like this idea of ordering your expenditures by cost per month so you can better compare expenditures of rare expensive buys and multiple less expensive buys. One interesting thing about your example is that it appears that before you talked to her, your friend did not realize that there was another viable option. So if she had done your exercise, she may have thought to herself, "There is no way to eliminate or severely reduce this expense without a major change to my life because I need to drive and because having to drive an economy car would change my life in a bad way." Looking at your expenses in order is a good first step, but magically noticing a cheaper option that you have never yet noticed during your entire life seems unlikely. Maybe some more good advice would be to look at the top few things on one's list, write down all the reasons why you can't reduce this expense, and then think of ways to research whether these reasons are actually true. I really like this idea of ordering your expenditures by cost per month so you can better compare expenditures of rare expensive buys and multiple less expensive buys.

One interesting thing about your example is that it appears that before you talked to her, your friend did not realize that there was another viable option. So if she had done your exercise, she may have thought to herself, “There is no way to eliminate or severely reduce this expense without a major change to my life because I need to drive and because having to drive an economy car would change my life in a bad way.”

Looking at your expenses in order is a good first step, but magically noticing a cheaper option that you have never yet noticed during your entire life seems unlikely.

Maybe some more good advice would be to look at the top few things on one’s list, write down all the reasons why you can’t reduce this expense, and then think of ways to research whether these reasons are actually true.

]]> By: Missy http://www.thesimpledollar.com/2007/02/04/dont-sweat-the-small-stuff-another-way-to-find-room-in-your-budget-for-retirement-or-other-savings/comment-page-1/#comment-5144 Missy Mon, 05 Feb 2007 04:30:17 +0000 http://www.thesimpledollar.com/2007/02/04/dont-sweat-the-small-stuff-another-way-to-find-room-in-your-budget-for-retirement-or-other-savings/#comment-5144 I have been tracing all expenses. I have found this helpful in that I actually KNOW where the money is going. I have had to make adjustments to the categories in my budget because I underestimated the actual amount I spent. The budget is not something that will work in just one month. It takes time and correction. I just have to accept the small failures as lessons learned. I have been tracing all expenses. I have found this helpful in that I actually KNOW where the money is going. I have had to make adjustments to the categories in my budget because I underestimated the actual amount I spent.

The budget is not something that will work in just one month. It takes time and correction. I just have to accept the small failures as lessons learned.

]]> By: Enough Wealth http://www.thesimpledollar.com/2007/02/04/dont-sweat-the-small-stuff-another-way-to-find-room-in-your-budget-for-retirement-or-other-savings/comment-page-1/#comment-5114 Enough Wealth Mon, 05 Feb 2007 00:30:44 +0000 http://www.thesimpledollar.com/2007/02/04/dont-sweat-the-small-stuff-another-way-to-find-room-in-your-budget-for-retirement-or-other-savings/#comment-5114 Both approaches are valid in some situations. If you are blowing large amounts of cash on big ticket items, that's where you can have a big impact on your budget. So it would be stupid to focus on the "latte factor" in that situation. (Although just spending an extra $10 a day on coffee and a donut has a similar effect spending $350 a month more for a more expensive car lease). However, if your big ticket items (transport, food, housing etc) are already cut back to the bone, then you do have to look for any other small "luxury" items to cut out in order to be able to save any extra for retirement. As with most "rules" of personal finance, it all depends on your own situation, and there is no "one size fits all" formula that can be applied. Regards http://enoughwealth.com Both approaches are valid in some situations.

If you are blowing large amounts of cash on big ticket items, that’s where you can have a big impact on your budget. So it would be stupid to focus on the “latte factor” in that situation. (Although just spending an extra $10 a day on coffee and a donut has a similar effect spending $350 a month more for a more expensive car lease).

However, if your big ticket items (transport, food, housing etc) are already cut back to the bone, then you do have to look for any other small “luxury” items to cut out in order to be able to save any extra for retirement.

As with most “rules” of personal finance, it all depends on your own situation, and there is no “one size fits all” formula that can be applied.

Regards
http://enoughwealth.com

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