Believe me, I’ve done it. And 6 months of restaurant dinners is not worth $6000 of hard-saved cash. It’s much more worthwhile to either keep it as savings or use it to purchase something important.

If you’ve evaluated this and they are, that’s great for you. If you haven’t really evaluated your eventual needs for savings and retirement (separate things) then it would definitely be worth your while to take some time and take a look at them, then make sure your auto deductions get altered up to meet them.

Being able to “cover” something is different and distinct from being able to afford it.

With regard to your posts, I would say that the balance in your checking account is only a small part of the picture when it comes to whether you are meeting your financial goals. If you can afford the impulse purchases–and by afford, I mean that all of your long and medium term goals are currently fully funded, or on track to be funded,*and* you have enough money to spend on impulse stuff–then spend away!

I think the number of people who are in a position to do this are pretty small.

For example, someone who is young (20s) and single might think they have a lot of disposable income, not realizing that they haven’t planned ahead financially to pay for getting married in the future, for having their first kid, or that their rate of retirement savings is nowhere near what they would want to have if they stopped to actually plan it out. If they come from a kind of “work for salary” family background, they might not have thought about planning to have a good chunk of cash on hand to take advantage of business opportunities that may crop up, either.

Once you begin planning for these things, a lot of that “disposable” income that they are spendin may now need to be saved for allocation to some of these medium and long term goals.

But first make sure that you’ve really got a handle on those long, medium, and short term plans. And most would benefit from sequestering the money for them in a separate account from their everyday monthly checking account so that accessing those funds has to be done consciously.

Right now, I’m debating about just going nuts and saving to get a Louis Vuitton bag. Yup, the ultimate in consumer goods luxury and want…. But it’s a nice, like $700 goal that I think would be fun to save for. If not fun to see if I could actually drop that sort of money on a bag!! But something I know I would keep for a very long time and would be classic.

Maybe not, but the way things seem to be yet… I’m inclined to think so. Not an “investment” any more than I spend a ton up front to always have an awesome bag to use for the next few decades. I’ve used my $300 Coach bag for a year now. Not every day, but I haven’t had the desire for a new Coach so that’s a good sign. Maybe I’m ready for the next “step.” :)

Sometimes I have to ask myself two or three times, but if I get that far and the answer is still “yes”, then I go ahead.

I have probably saved myself thousands over the years by just going thru this simple ritual.

Excellent rule, excellent post.

It’s really a killer combo – typical store’s clever marketing and merchandizing + a very impatient and distracting 2-year old + overtired and hurried mom. Making a list means that a) I won’t forget what I came to the store for and b) I won’t make any impulse purchases.

Even though I do stray from my list from time to time, I still save a lot of money.

i was happy to find a purse i really, really liked and wanted to buy a few months ago still at marshall’s and marked down to $10. so i feel ok about that one.

but a lot of the other stuff i bought i didn’t really need.

but you know milton’s red swingline stapler from office space? i just bought 6 of them. i know i’ll give one to my friend christine, and i’ll keep one, but i don’t know who the other 4 are for. but they were only $5 each, marked down from $19.99.

today i HAD to buy them, but on another day i know i wouldn’t have felt the same way.

i bought one at office max, w/ the package of copy paper i needed, and a few other supplies. when it rang up at $5 instead of the $10 it was marked, i went back for the rest.

i’m pretty sure they, accompanied by an office space dvd, will be xmas presents in a few months, but i feel kind of crazy right now.

I do like your “blow money” plan. I like the idea of budgeting money for unbudgeted purposes!

About an hour after reading this article, I found this piece that I thought you are your readers would enjoy. Talk about timing!

http://news.yahoo.com/s/ap/20090821/ap_on_re_us/us_shopping_cart_abandonment

I’m guessing you are a single male? Add in a wife and couple of kids and budgeting becomes necessary because the actual needs (food, clothing, shelter), the responsible stuff (life/disability insurance, savings, college funding, retirement) and the wants (toys, activities, babysitters, etc) quickly overwhelm many people’s income and need to be prioritized and accounted for. If you don’t do this, it’s a quick trip to the credit card balance that doesn’t ever go away and debt hell.