Guilt free budget?

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Guilt free budget?

Post by Izmuth on Mon Feb 29, 2016 1:54 pm

TW: Spoiled rich (well, more like middle class?) kid first world problems

Having said that: hey guys!

To give some background: I'm currently working my first real job in my life, which means I have my first real income.

I'm just unsure how to spend it wisely. My parents pay for a lot of stuff (car stuff, health insurance etc. etc.), so these "hidden" costs make me nervous for a time when I have to foot the bill myself.

I just don't want to learn any bad spending habits that are going to bite me in the ass.

So, to the point, does anyone have a good rule of thumb how much of your budget you should save and how much you can spend guilt free? (I'm going to try make a spreadsheet and include all the costs my parents pay, but I *think* I will have plenty left over)

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Re: Guilt free budget?

Post by caliseivy on Mon Feb 29, 2016 6:29 pm

It's a great idea to make a spreadsheet of things you need/pay for and to include what your parents pay, having that picture will definitely make figuring out a budget easier, and you'll be able to edit it should your financial situation change.
At one time, it was advised to save 10% (or 15?) of your income in a savings account; I don't know if that's still the rule, but I've found it works for me. Maybe setting aside some percentage of your income as soon as you get it will work for you too.

Not gonna lie, my guilt free spending varies a bit because I haven't given myself a set amount to keep to (I really like food Shrug ), but I've sort of narrowed it down based on what I on average spend a month, and what I spend it on. I've given myself an arbitrary, but reasonable, amount I'm trying not to exceed every month. Even if I go over some months, it's never far from that number so I think having it always at the back of my mind helps me from just spending on a whim without any kind of regulation.
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Re: Guilt free budget?

Post by sky on Mon Feb 29, 2016 8:51 pm

Izmuth wrote:I just don't want to learn any bad spending habits that are going to bite me in the ass.

So, to the point, does anyone have a good rule of thumb how much of your budget you should save and how much you can spend guilt free? (I'm going to try make a spreadsheet and include all the costs my parents pay, but I *think* I will have plenty left over)

I would say count up the amount you want or need to save each month, and whatever's left after that is what's for spending. So if you add up your monthly expenses, plus the costs your parents are covering that you'd like to be able to to pay if necessary, plus whatever additional amount you'd like to be funneling into savings/IRA*/investments, plus if you want to save up for a vacation or other large purchase, then the amount that is left is what you can spend. In my experience, the "guilt free" part comes of its own accord just by knowing that I'm not spending money that I needed to have available for something else.

To account for your income amount to go up or down over time, I'd recommend you focus on building a habit where you periodically reasses how much you're spending and saving and adjust your budget as necessary. There is no "right amount to spend" that works for everybody all the time. There is only the amount that works best for each individual set of circumstances.

(*If you find you have excess money right now, this is an excellent time to funnel a large chunk of it into retirement savings where it can collect compound interest for the rest of the length of your career.)
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Re: Guilt free budget?

Post by Izmuth on Sun Apr 17, 2016 7:20 pm

Thanks for the advice guys!

It's still a bit hard to make an inventory of all costs, since my mother still likes to give me clothes, shoes and all that jazz (also because I would wear them longer than she thinks I "should"), and more of those hidden things I didn't think yet of to put in a budget :/

But slowly my spreadsheet is getting more detailed and accurate!
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