How do you budget for something you can already afford?

[Anonymous]

I get a lot of advice to "set money away" for big things like vacations or expensive shoes or whatever - but how does that work when you already have the money? I am sorry if that's a stupid question.

[Anonymous]

Just invest it and save for your retirement, OP. I wish I saved more when I was younger, rather than spending it all. Though I must admit it was fun.

[Anonymous]

That advice is for people who would otherwise spend everything they make as it comes in. It sounds like you don’t have that issue, which is a good spot to be in! You might benefit from a bigger picture view of budgeting where you consider longer term goals. Do you want a vacation home? To retire early? How do you make these things happen?

[Anonymous]

I don't budget for those kinds of expenses but do set targets for retirement and other savings, and for bigger expenses like home improvement projects or a new car. If you don't need to budget for vacations or moderate purchases then don't do it.

[Anonymous]

I think once you have enough money to pay for all of the things you want, "budgeting" means being intentional about how you spend and allocate savings; so if you have $x disposable income in a year, you decide you want $x for retirement, $x for college savings, $x for home improvement, $x for vacations, etc.

[Anonymous]

Make sure you pay off any debt, have a 6 month emergency fund, are saving enough for retirement to meet your retirement goals. Same if you have goals re: college savings for kids (if you have them). If you can cover all of that and still have discretionary income, how you spend it is up to you.

[Anonymous]

Anonymous wrote:I think once you have enough money to pay for all of the things you want, "budgeting" means being intentional about how you spend and allocate savings; so if you have $x disposable income in a year, you decide you want $x for retirement, $x for college savings, $x for home improvement, $x for vacations, etc.

+1

[Anonymous]

I don’t do a budget at all. I have 4 direct depots that happen with each paycheck.

1. Retirement
2. Brokerage account
3. Short term savings
4 college fund

I then blew everything else on whatever I want to spend it on. Sometimes I don’t blow it all and a bunch of money collects in my checking. In that case I usually add more to my brokerage and college fund.

Budgets are for people with spending problems and or cash flow problems.

[Anonymous]

Anonymous wrote:I don’t do a budget at all. I have 4 direct depots that happen with each paycheck.

1. Retirement
2. Brokerage account
3. Short term savings
4 college fund

I then blew everything else on whatever I want to spend it on. Sometimes I don’t blow it all and a bunch of money collects in my checking. In that case I usually add more to my brokerage and college fund.

Budgets are for people with spending problems and or cash flow problems.

[Anonymous]

Anonymous wrote:I don’t do a budget at all. I have 4 direct depots that happen with each paycheck.

1. Retirement
2. Brokerage account
3. Short term savings
4 college fund

I then blew everything else on whatever I want to spend it on. Sometimes I don’t blow it all and a bunch of money collects in my checking. In that case I usually add more to my brokerage and college fund.

Budgets are for people with spending problems and or cash flow problems.

You had to decide how much the direct deposits should be, right? That’s called…budgeting.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don’t do a budget at all. I have 4 direct depots that happen with each paycheck.

1. Retirement
2. Brokerage account
3. Short term savings
4 college fund

I then blew everything else on whatever I want to spend it on. Sometimes I don’t blow it all and a bunch of money collects in my checking. In that case I usually add more to my brokerage and college fund.

Budgets are for people with spending problems and or cash flow problems.

You had to decide how much the direct deposits should be, right? That’s called…budgeting.

Sure, I do it as a percentage of income (though not the 401k due to maximizing tax savings). But no I do not “budget” for shoes or vacations. That’s what the OP asked. I’m going to Utah for the 3 day weekend coming up, I just decided this this week because it’s been so freakishly hot here and skiing the East is looking like it’s not happening this year. Did I budget? No. Did I look in my checking and see if I had the cash for airfare, hotel and lift tickets? Yes. Does that mean I can take another vacation in January? No.

[Anonymous]

We're not big spenders, so we've always just tracked spending rather than setting aside money for things (other than, say, retirement, or saving for a down payment). Knowing we generally spend $x/year on trips or $y/month on clothes helps us keep on track and make decisions about purchases.

[Anonymous]

Anonymous wrote:I don’t do a budget at all. I have 4 direct depots that happen with each paycheck.

1. Retirement
2. Brokerage account
3. Short term savings
4 college fund

I then blew everything else on whatever I want to spend it on. Sometimes I don’t blow it all and a bunch of money collects in my checking. In that case I usually add more to my brokerage and college fund.

Budgets are for people with spending problems and or cash flow problems.

This is pretty much what we do as well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think once you have enough money to pay for all of the things you want, "budgeting" means being intentional about how you spend and allocate savings; so if you have $x disposable income in a year, you decide you want $x for retirement, $x for college savings, $x for home improvement, $x for vacations, etc.

+1

+2.

[Anonymous]

I went from making not so much (grad student stipend) to six figures in my early 30s w/o any responsibilities, so never really had to “budget” in the sense of saving a certain amount a month to pay for a vacation— when I was a student, I didn’t have enough to save up, and then when I was working, if I had the money, I decided if it was worth spending on whatever I was wanting. So, yes to a pair $100 shoes I really liked, but no to a pair of $500 shoes, even though I liked them and had enough money, because that is, to me, a ridiculous amount to spend on a pair of shoes.

I do have auto savings into a brokerage account on top of my retirement savings, and then occasionally dump money from my checking/savings into my brokerage account (or buy some i Bonds).

MAJOR expenses (like down payments/renovations) have come from saving, but it’s never been a “save X amount first” sort of thing, it’s more, we have X saved, we can spend Y on something.

I don’t think this is ideal, but it’s basically the way both my husband and I have operated, and it seems we’re living below our means…