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Old 08-27-2007, 11:55 AM   #23
Alex
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Join Date: Feb 2005
Posts: 13,354
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Keeping a budget for a while doesn't just tell you how to cut out all of the fun from your life but also helps to make sure you are actually spending the money on things that are of a priority to you.

I've never really been a budgeter. When I have money I spend it and when I don't I stop spending it. I've always been good at that and it has worked for me and we've never really operated on a large credit load. But when I was looking at quitting Wells and working on MousePlanet full time we did have to spend some time looking at the math.

Once we did that it showed that we could pretty much cut our income by 40% without dramatically altering the parts of our lifestyle that were important to us. I stopped spending $150/month on DVDs (which I like to have but never actually watch). We ate at home more often (but still ate out a fair bit). We cut back on the spontaneous three-day road trips (where the huge expense was rack-rate hotel rooms since we often didn't know where we'd be until we got there).

And it can reveal some surprisingly easy ways to stop spending money in places you just don't think about. Spending $3 for a cup of coffee seems negligible, perhaps, but less so when you combine that and realize it is $720/year if you grab one every day on the way to work simply because it is more convenient than some alternative. One thing I learned when we looked at the budget was that I was spending about $200/year on newspapers essentially so that I could do the crossword puzzle on the train home.

One thing GC mentions is that he has a Costco membership. Though it is an annual expense, since he says he doesn't cook at home much I'd make a strong guess that this is an expense that comes nowhere near paying for itself. You generally have to spend thousands of dollars at Costco to recoup the expense in product savings.

If the big strain is the apartment and you're locked in for a long while, you might consider talking to your management or landlords about it. Letting them know that you can squeeze the payments but that you've maybe bitten off more than is comfortable and that if they can place the unit you'd be interested in moving on. The worst thing they can do is say no.
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