Poll (just curious): do you save, budget, or just hope?

[patandchickens]

Got curious about this from reading some other threads on sister forums. I'm not asking about your grand overall financial life plan or anything , just about how you make significant purchases (say, over $25, or for the better-off maybe over $100+), like a canner or an animal or stuff for a new shed/coop.

Do you:

a) save up for it in advance, either in a cookie jar or with actual real accounting so that the money is earmarked for that purpose, and then not buy the item til you have all the money actually in hand;

b) consider your monthly or quarterly budget (I just mean generally, your financial situation) and see that the money currently available for discretionary spending will adequately cover that expense, and then just remember not to 'double-spend' that money on anything ELSE that month/quarter;

c) buy the item if it seems important enough and if you feel reasonably sanguine about it not putting you into serious debt, and figure it will all work out in some fashion as time goes by.

(or I suppose also [d] - something else )

For whatever it's worth, I feel like I *should* routinely do [a] but in reality I only do that for large things (like over $100 dollars or so), and tend to do most of the time. (I think if I did [a] more, and less, I would spend more wisely and have a more saved for other purposes )

Howbout you? And how much of a difference do you think it makes?


Pat, not the very most fiscally-responsible person in the world, but *trying*

 

[tortoise]

I'm in between A and B. B is more my style, but my income is so low that I end up doing A a lot too.

Or I'll save up 1/2 the money and do B with the rest.

 

[lorihadams]

Well, my hubby and I usually go back and forth for a while over whether or not we really NEED something or if we can make do with what we have. Our big thing right now is furniture. We really want new living room furniture but our couch is still in relatively good shape and has a fairly new cover on it so we decided to hold off until we sell our other house and then think about it again.

For other smaller purchases we kind of do the same thing. Moving has really been a blessing in disguise cause it has forced us to go through everything we have and decide whether we really use something or if it is just taking up space.

We do charge some things....right now we have our lawnmower and weedeater that we just bought and desperately needed, cause now we have a full 3 acres to keep mowed as well as a fenceline on 6 more, on a home depot card with no payment and no interest for 12 months. Hubby and I have side jobs lined up in September that will almost completely pay it off and we earmarked that money for it before we decided to buy it.

I put aside any cash that I get and earmark it for "emergency" things. I do that every year with birthday and xmas money. Sometimes it takes me 6 months or more to spend it. I just spent $20 on new bras and used my birthday cash to pay for it.

I am the one that pays the bills in the house and I know how much we spend and how much is leftover so I am usually the one that controls the spending. I have "hidden" money from myself and my hubby before and it always surprises him when I pull out a wad of cash for something. He just looks at me and says "that's why you pay the bills, cause I could never do that."

 

[freemotion]

Mostly A and B, and C in an emergency, like if an appliance dies or the car needs repair. We have a savings account that my teaching income is directly deposited into for paying tax quarterlies (mostly self-employed) and there is sometimes a bit extra in there if an emergency comes up.

I always put any money that comes from selling any of my homestead stuff like eggs into an envelope that goes into the basket with all income to be deposited (another self-employed thing....pay is in the form of a bunch of little checks and piles of cash) and is clearly marked "egg money." I go to that envelope first for homestead project money, like building the pig house and paying for the piglets, and buying my new buckling. When I sell the buckling later, the money will go back into that envelope.

If a good deal comes along and the envelope is empty, I will check our bills vs income and see if we can afford it. I also don't pay for feed from the egg money, as there would not be enough. Feed is part of the "grocery" bill for the household, so comes from our regular income. In reality it is converted into food for us, so that is how I justify that. Otherwise, there would never be any project money.

If I want something big or anticipate needing something big, I will do "B" every week/month and put money aside until there is enough. Like my stove....it is obvious that it will need replacing soon, so I started saving months ago. I wanted to use the opportunity to convert to gas, which would cost almost triple what an emergency purchase of an electric stove would, so I was really motivated....if I didn't do it this year, it would likely wait until the next stove started breaking down.

We had some huge emergencies, one after another, and are being super frugal to get out of "C" for the first time in our lives. We don't have debt because of luxuries. We have debt because of roof leaks and urgent health related costs. I advise anyone who is young enough to live like you have nothing and pound down your debt....mortgage, car, school loans, etc. Then when something big happens, you can get through it. We are.

So yes, I think it makes a HUGE difference to live your life in "A!" Pay down current debt with "B." Use "C" only for dire emergencies.

 

[lorihadams]

I made some bad decisions on an investment in my early 20s and used 4 credit cards to fund that business venture and it went bust. I couldn't afford to pay the bills and ended up with $27000 of debt by the time I was 24. After my husband and I got married I did the credit counseling thing and paid it off over 3 years. I put all my extra money after paying bills into paying off my debt and we lived solely on my husband's income. We did without a lot of things then but it has paid off in the long run.

Credit is not bad if you use it responsibly. Only charge what you know you can pay off. We have a set budget on our credit card now and know how much we can spend and pay it off every month. We carry little or no balance on it if at all possible. We have built our credit scores up to over 800 (hubby) and high 790's for me. It really helped us out when we needed to get the construction loan for all the moving expenses and remodeling for the new house.

One of the best things that you can teach your children, that my parents never taught me, is how to use money.

*how to budget
*how to prioritize expenditures
*how to use credit cards
*how to balance a checkbook
*how to save for big purchases
*how to invest wisely
*how to barter and find good deals on purchases
*how to buy used goods without getting burned

My parents never talked to us about money. It came back to bite me later on and now we are trying to teach our children how to use money to their advantage.

We constantly make our children put things down and think about whether or not they really need or want that item before they spend their money. We always ask that people give our children money for birthdays and xmas cause then it gives us an opportunity to help teach them about spending/saving. We always make them put some in the bank and give them a small amount to spend on something that they want. It has made a difference with my 5 yr old son especially. You can see him thinking about what he wants to buy now. He's constantly putting things back on the shelf and saying out loud, "no, I don't need that", or "no, I already have something like that already"

 

[aggieterpkatie]

We mostly do B, but I'm starting to do A with stuff I want to buy for hobbies. I have been saving my money from egg, milk, and veggie sales (and the occasional craft sale) to buy things like supplies for an animal pen, soap making stuff, cheese making stuff, a Kitchenaid mixer, etc. I really hate to spend money on hobby stuff, so I'm hoping I can sell enough stuff to fund what I want.

 

[mekasmom]

We have done "all of the above" at one time or another.

 

[DrakeMaiden]

Well, I am always trying to save, if I can and where I can, so the item in question has to really be worth it to me or else fit within my monthly discretionary funds. For big ticket items, I often will put the purchase off (and by the time I buy it I will probably have saved enough to cover it) or recently when I couldn't do that I wrote the check (medical bill) and then just cut my food bill drastically for the next month plus until I had re-saved that amount. :/

So . . . I tend to save without earmarking, and spend either 1) considering the money previously saved (option B), or 2) saving extra after the fact, until I feel I am back to my previous financial state (option D?).

 

[Woodland Woman]

We make sure we can pay for it before we purchase it. Usually have only one big expense a month. Sometimes a vehicle repair or maybe an appliance on the high end and maybe lumber for a small project or some household expense on the low end. We live very frugally though. We do most things ourself if we can. Things like small appliances or tools might be birthday presents. It usually works itself out. So we don't really budget except that we try to keep our expenses down,

 

[Jaxom]

With the nominal amount of income I have. I have no other choice but to do A.