life in dollars

makr blog, via muus

I mentioned earlier this year I wanted to tighten my clothing budget, and set aside money to buy things rather than buying them right away, so I thought I would go on a related note and share a bit about my experience trying to keep to a budget. (In case you thought this blog was all about waxing lyrical about dining alone.)

A few years ago, I set some rules about how many “treats” I would allow myself a month that would allow me to have a social life and indulge in the odd butter + sugar magic, in order to derive a realistic budget.

I came up with this:
  1. One takeaway latte a week, or four a month (S$22)
  2. Maximum of two magazines a month (about S$25)
  3. Nights out drinking capped at twice a month, assuming I spend about S$30-S$40 each time (S$60)
  4. Meals averaging S$40 maximum twice a month (S$80)
  5. Coffee time (usually with pastry/cake) averaging S$15 each time, maximum twice a month (S$30)
  6. Brunch, averaging S$30 each time, once a month
  7. Daily workday lunches should not exceed S$10 a day (S$50)
If I max out my limits every month, it would average about S$300 for four weeks, or S$112.50 a week. I added S$20 a week for odd things (movie, shampoo, instant coffee for the office), and another S$25 for the odd cab (I claim work-related cab rides from my company). This makes a budget of S$157.50 per week, which is far more realistic.(Obviously I have other expenses, like transport, utilities etc but those I account for separately.)

This isn't much to some, and a lot to some, but for me, it's comfortable. It leaves me enough room for the odd outrageously expensive meal or spend generously on gifts. And of course, the occasional pair of shoes.

And because I predict better how much I expect to spend, I've been able to save better too.

The mistake not to make is to aim for a magic number. It doesn't work if you don't track how much you're actually spending first, before deciding what to add and take away.

Anyway, if you're still reading my amateur attempt at financial advice, you may be wondering how my experiment with the MHL dress went. Predictably, I had lost interest by the time I set aside the money for the dress. This is not to say I won't ever buy the dress, but it demonstrated clearly to me that it was of little consequence. If I bought the dress, I would be happy, but not much happier than I already am. If I don't buy the dress, I'm not unhappier at all.

Isn't this so often the case?

Happy long weekend! (I am in fact working tomorrow, but I have Monday off!)


Kate said…
I liked reading about your budget. I think I need to do something similar - my online banking is full of the odd few pounds here, the odd few pounds there and it really adds up. If I started writing down the clothes and makeup I buy I think it'd make me really think about how much of my income goes on them. It's not extravagant, by any means, but it needs to be considered.
Joy said…
i love how smart you are with your money and that you are realistic about it too. i have heard time predicting things so i cannot budget all too wisely. the mhl dress or something even better in the future, can wait.

you have a great long weekend too yourself!
Joy said…
*hard not heard
A said…
I love your list, I have a similar one! :) (It actually really is very similar, also the content). Only somehow so much money still kind of "disappears". At the moment I try to keep lunch/coffee/drinks/other social stuff as low as possible without having to suffer from isolation, because I try to save as much as possible for travelling. And I still love clothes too much. Don't know, I can be really strict with all the other stuff, just clothes/shoes etc don't work, even though I really wait for sales, special offers etc. And books, but they tend to be less pricey ...

Have a great weekend!
Anonymous said…
fantastically, painfully true!

each month i give myself a set maximum i can spend each day (family of 3+dog) for groceries, transportation, treats (human and canine variety). and i use cash. some days i am well below, and that gives me a little more to play with on other days (i have to keep track). it easily becomes a bit of a fun challenge to try and end up with a nice amount left over at the end of the month.
a budget is a simple concept that just = responsible.

when i focus on keeping track of the actual dollars, then the things i normally purchase, the distractions, the acquisitions, they are less powerful. buuuuuuut, when one does catch my eye, it is suddenly soooo hard to remember your lesson of the MHL dress, which is always true of "things". i guess my challenge is to never look up. ;)
Jess said…
My bank in Australia very conveniently provided a really good budget tracker - I paid for most things by debit card, so the transaction came up in my internet banking and the budget tracker actually automatically sorted the value of the transaction into what it thought was the right category, so bills, groceries, restaurants, etc. (it has a database based on what other people with the same bank have sorted similar transactions into, so it recognises restaurant names, supermarket chains, utility companies, etc). All I had to do was activate the tracker, and then come back a month later and be absolutely appalled at my spending behaviour. It was so confronting! That really spurred me to do a proper budget, because it is just absolutely impossible to comprehend your spending habits and to meet goals without really sitting down and thinking about it. So your post reminds me that I actually need to sit down and do that all again, since I have moved overseas and am with a new bank that doesn't provide me with awesome, automatic budget tracking.

And I also find that if I put a desired purchase out of reach for a little while, by the time I get around to considering it again, 95% of the time my desire to purchase has diminished to very low levels. I don't think of myself as being particularly fickle, but it seems like I might be. Oh well, financially it's certainly a good thing!
Unknown said…
I'm glad you posted about this because it's something I've been thinking about a lot. I recently started making a real salary again (more than I ever have before) and the temptation to have treats all the time has become very real. You're right - it IS the little things like coffee and work lunch that will get you eventually. I've started to make similar rules with myself after going to get coffee everyday just because it's a good break, but it becomes so expensive after awhile! Your rules are similar to the ones I've been unofficially thinking about, so thank you for the inspiration!
Unknown said…
My bank is like Jess's, they have a tracker that automatically puts spendings into categories (which you can change if they are wrong) and then offers graphs at the end of the month. I also use iXpenseIt for iPhone to track my spendings with my own categories. That's the "what did I spend" part.

Like you, I also plan future budget, based on what I spent before, picking important categories, fixed expenses, choosing where to reduce etc. I have read somewhere that people are more relaxed when they spend only 70-80% of their income, that way they never feel they don't have enough. Something I'm trying to incorporate into my budget too.
lin said…
Kate: I used a basic app called TOSHL on my iphone; at first I was using it only for holidays but then I started using it just to keep track of spending for a few months. I don't find it very user-friendly but it was a good way to start!

Joy: I could be a lot smarter with my money; I'm not saying I ALWAYS manage to stay within budget, haha. I think these things just come with age, in the sense that once you start working and become more financially independent you have no choice but to confront it.

Cato: I save a lot by only eating one meal out...this means cooking, haha.

I also started borrowing books from the library rather than buying. I still buy books sometimes but much much less than before.

editor: Having that maximum there (and knowing it's a realistic one) is a really helpful mental brake and within weeks of setting the budget I could tell I was being a lot more mindful about what to spend on, and that's always a good thing.

It's so tempting when something lovely comes along (I saw such a pretty dress just earlier today) but remembering that the lift in mood is temporary really helps drag me back to rationality.

Jess: That's brilliant! How comes the banks here don't do that. I don't pay so much with debit but if my bank was so handy with these things I definitely would.

Increasingly, I've noticed that the longer I go without buying things the more I start to thing, "I've been so good so I can buy this"...which is dangerous! I think it goes to show how deeply and frighteningly engrained consumerism is in all of us.

rachel: i noticed a year after i graduated and started working full-time that although i was making more money, I wqas spending more as well, and consequently not better off at all a whole year after I started earning money! it's great that you've already started thinking about this and i can't stress how important it is, especially when job security is so low these days.

Kali: I think that's an amazing idea and I wish my bank did that! shall check out that app - the one i've got isn't all that great and others i have tried are too complicated.

i consciously overbudget (a little) as well...i think it's absolutely true that you don't feel so stressed out if you have a little "leftover" each month and you don't always feel like you don't have any room for extras. i think if a budget makes me feel bad that i'm more like to not stick it and simply bust it.
Maja H said…
I do something very similar. The boyfriend and I have a shared account for food, dog stuff and household items, so we place a set amount of money there every month. I know exactly how much I will have to pay in bills and how much I would like to save, so I put that amount into a separate account as soon as I get my pay check. I then put a good chunk of what's left into my buffer account, so in the end all that is left in my actual "spending" account is my fun-money.

It is not a perfect system, but it does give me a good overview of how I can spend my money at any given time. I also keep a sort of budget in google docs where I have added things like birthdays, dentist checkups, insureance payments and so on - those things that come at the same time every year, but that still always come as a surprise. Not any more!
jamie-lee said…
I really like the way that you've budgeted - and I honestly can say I would like to start doing something similar. At the moment, I tend to put aside $100 a week for food, then another $100 or so for miscellaneous expenses per two weeks. I don't tend to eat out a lot, making all my lunches, and realistically I know I could survive on less (although L and I tend to buy chocolate and cheese etc, not all of which is consumed by me!).

Having only 2 months left onmy current contract, I do need to start tightening up a little, my biggest problem is my seemingly unlimited shopping budget, it's like oh, I have some spare money? I know, let's buy new shoes... eek.
Nyssa Jayne said…
i used to have this thing, "oh, i've just been paid, so i can go buy something!" and that would be my weekly "treat". i never thought about what i was going to buy, i would just go out and buy it. once i stopped doing that, i found that my budgets worked a lot better. :D

i still buy a coffee every day, or every other day, but i don't go to restaurants. it took me a long time to realise that when people made lists of things to consider, that these lists would not necessarily be the same for me. :)
Eileen said…
I think I need to be as disciplined as you are in putting it all down in dollars and cents.

Sometimes I feel that I let money flow out of my purse too easily and without me knowing! A little novelty here and there and my disposal income is all gone!

I love your attitude towards shopping.. the desire, however intense, will pass and like you said, life is still intact and so is your joy:)
lin said…
Maja H: I think the hardest part is getting started on writing things down. You feel like you know where your money is going so you refuse to get started, haha.

jamie-lee: I know I can survive on less too - I have this terrible habit of spending more carelessly come the end of the week when I've been good all week. I guess it means it comes down to reviewing my budget regularly.

Nyssa Jayne: Exactky! I had to make a list of what I was spending on first in order to decide what I could do without. In university I used to have a music budget - I bought new albums almost every month. But that sort of became irrelevant when I no longer had the energy to sit around and check out new bands.

Eileen: Thanks! I had to do this budget because I was having so much trouble remembering where my money went!
Jocy said…
I loved reading your budget. I've been trying to work one into my life because it's all those lattes and daily lunches add up.

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