How do you determine what to spend money on?

[Insomniator]

For things that are a complete waste/pointless, how do you justify buying them? Obviously if you are rich then what the hell but for your average person how does one balance spending/saving? For example, I live at home and have a decent job. But my bank account isn't growing by the 1k a month it technically should be if I paid rent. I don't know wtf I'm spending on exactly... probably food/bars.

Between computer and car parts I'd like I could probably spend 3 grand in one day... and technically I have the money. But I have people tell me to save every penny you'll need it later! While others say spend it now while you have it , once you have a family you won't be able to afford anything!

Seriously, there is no reason for me to spend 100 bucks to get my windows tinted, or 300 bucks for a new video card for Crysis 3. Going by that logic though I may as well just sit in my room all day eating celery and drinking water.

 

[IronWing]

We use the "Ooh shiny!" method for making pointless purchases. Works for us.

I don't know wtf I'm spending on exactly...

Track your spending. Write down what you spend your money on. Then you'll know and can decide if that's how you really want to spend your money.

 

[Sixguns]

If you work for your money buy whatever the hell you want. At least that is how I feel about it. Nothing wrong with buying something for yourself.

 

[Herr Kutz]

If I want it imma buy it, I don't ask no price.

 

[KentState]

Sounds like you know what you spend your money on. I buy a lot of shit too, but growing my savings account is my primary focus. I just make sure that any frivilous purchases do not take my savings account below the last months balance. Basically, take two steps forward and only 1 backwards and not the other way around.

 

[waggy]

easy.

after paying mortgage, bills and food. i look at what i have left over If there is something i want i get it. IF the item is over 1k i think do i really need this? if so i budget for it and buy it.

 

[KlokWyze]

Honestly, if you conscious enough about it you will be alright. I've been living paycheck to paycheck for 10 years and I'm OK, just not great. We just bought a house w/ barely any savings and that wiped out the little I saved in 6 months. Just have to start over. Should be easy, as I have no car payment, very low debt and I will be pulling a substantial income now... I hope it works out at the new place!

I think KentState put it in the right basic perspective.

 

[Slew Foot]

If I want it I buy it

 

[Alienwho]

I'm not house poor or car poor so I can spend quite freely and still watch my savings grow quite quickly. I feel like I won the lottery when I purchased my house because the timing was so great between the housing crash and insanely low interest rates. Not to mention I lucked out and got a short sale for 2/3 the actual value.

 

[Baked]

You just bust out one of many CCs and charge the toy on it and worry about the payments later.

 

[brianmanahan]

i wait to see if i still really want something 6 months later

if i still do, i usually get it

 

[DaveSimmons]

I just ask myself whether I really want it or not, and whether or not I'd actually use it.

I'm fairly well-off, but I'm also a penny-pincher.

I look at $1,500 gaming laptops or ultrabooks or the PS Vita and go "nifty!". But then look at my gaming desktop, PS2, PS3 and 360 and backlog of games and say "maybe some other month."

I think about buying some blu-ray box set, then usually just rent or stream it from Netflix instead.

I look at high end HDTVs, but my 7-year-old DLP still works fine so "maybe some other month."

 

[Kaido]

Ideally:

1. Cash only, no credit (for purchases). Exceptions are school, car, mortgage.
2. 6 months of savings to cover existing expenses (i.e. if you lost your income source, you could live fear-free for half a year)

There are times in your life when you have to sit home and eat beans and bread, and there are times in your life when you can enjoy the luxuries. There's no reason to sit at home and eat celery if you have no-dibs dollars, unless you like doing that. I've had a couple friends take sabbaticals from work for months at a time simply because they have the savings to go do whatever the heck they want and then come back to work. But that doesn't mean you should go spend-crazy...rich people stay rich because they don't spend their money.

Part of what helps is deciding what you want from life - setting some goals. If you have no reason to save money, then it will get flushed away unless you make it a point to save it. And you don't have to save all of it...just split half into savings and half into a fun-cash account for blowing however you want, for example. So having some sort of goals to guide your spending helps, otherwise you just kind of...drift.

 

[QueBert]

I go on Craigslist and with my eyes closed click on a random category. I then pick one of the first 3 things I see listed and drive to to a store that sells it and buy it. Did it this morning and tomorrow I'm going to go pick up a vinyl copy of Micheal Jackson's Thriller album.

 

[RossMAN]

I just ask myself whether I really want it or not, and whether or not I'd actually use it.

I'm fairly well-off, but I'm also a penny-pincher.

I look at $1,500 gaming laptops or ultrabooks or the PS Vita and go "nifty!". But then look at my gaming desktop, PS2, PS3 and 360 and backlog of games and say "maybe some other month." My first instinct used to be, buy it now! I'm proud of myself when I take a step back and rationalize it, do I need it, would I use it, can I go without it, etc.?

I think about buying some blu-ray box set, then usually just rent or stream it from Netflix instead.

I look at high end HDTVs, but my 7-year-old DLP still works fine so "maybe some other month."

I use the same reasoning and logic when considering a new purchase. You have to watch those small daily purchases like coffee, snacks, lunch, those small purchases add up quickly.

Speaking of HDTV's, our 50" DLP is also 7 years old and works just fine. Actually it's still on the original bulb which is one of the reasons we (OK I) decided to upgrade to a Sony LCD LED last year and well Fry's had a good deal.

 

[supremor]

If it's fairly cheap I'll just be like what the hell and get it. For more expensive things I consider how much use/enjoyment I'll get from it versus the cost and use that to determine whether I think its worth that price or not. Never felt the need to justify anything.

 

[Sho'Nuff]

I break my finances into four categories:

1. Non-discretionary expenses (home, daycare, food, utilities etc.)
2. Retirement investments (self explanatory)
3. Non-Retirement investments and savings (self explanatory/includes kids 529 plans)
4. Discretionary income.

Once 1 is paid and percentages for 2-3 are fulfilled, the rest goes into 4. I can spend 4 on anything I want whenever I want.

As to what I buy, it depends. I usually limit discretionary purchases to things that I believe provide enjoyment and good value. Tickets to see my favorite band = enjoyment + good value. Buying a new car = enjoyment but pretty bad value so long as my current car is operational and paid off. Vacation = enjoyment and good value if cost is reasonable.

Now that I think about it, it is somewhat odd that apply a pseudo economic analysis to each of my discretionary purchases. But that is what I do and it has served me well thus far.

 

[Kelvrick]

I take how much I make an hour and think to myself. Would I work for spend that much more time at work in order to have this.

 

[RossMAN]

I take how much I make an hour and think to myself. Would I work for spend that much more time at work in order to have this.

I started doing this a few years ago and it works wonders. Suddenly that $169 purchase isn't so appealing after you realize you have to work xx hours to pay for it. Instead that $ can be allocated towards savings or extra principal payments towards the mortgage.

 

[Humpy]

I ask my wife.

 

[Kelvrick]

I started doing this a few years ago and it works wonders. Suddenly that $169 purchase isn't so appealing after you realize you have to work xx hours to pay for it. Instead that $ can be allocated towards savings or extra principal payments towards the mortgage.

Haha, you quoting me realized how horribly wrong I wrote that second sentence. Mind fart.

 

[hans007]

i've gotten to this point that i make a pretty good amoutn of money. i am not really sure what to spend it on.

i mean i contribute to my 401k to get the maximum matching. i pay my rent (my place is ok, its not great, but i don tthink id be happier with a nicer place so i dont care). i buy food and go out and get drinks and whatever .

but other than that, and like replacing consumables like clothes when they get old i just save it. always good to have money i guess for when you do decide what you want.

it kind of boggles my mind how people hwo make 6 figures and are single and not say dying of cancer, are broke, but i've known people like that where somehow they manage to spend every dollar they earn just on random stuff, lavish vacations etc. i guess for some people they always spend as much as they can take in, and they really like having a lot of expensive stuff...i mean, they buy $200 jeans, $2000 TVs, have every gadget and they constantly get new ones.

hell i buy a new car every like 3-4 years, that would be my one really bad financial decision. but yeah spend what you want on your necessities, and what makes you happy. try to save some just incase you need it later or find something you want even more. easy.

 

[DaveSimmons]

i mean i contribute to my 401k to get the maximum matching. i pay my rent (my place is ok, its not great, but i don think id be happier with a nicer place so i dont care). i buy food and go out and get drinks and whatever .

I was living in an older, slightly run-down place until a couple of years ago, then moved to a new high-rise in a better location. It really does make a difference having newer appliances, better fixtures and nicer floors, and being able to walk just a block to pick up a bag of apples and loaf of bread. So when your lease is up again you might look around for something better.

Paying the extra rent to live here is one expense I don't regret a bit. It sounds like your cars might be the same for you.

 

[LagunaX]

Don't scrimp on toilet paper.
Charmin Ultra is worth it and you are not saving that much money at all.

 

[dmcowen674]

How do you determine what to spend money on?

For things that are a complete waste/pointless, how do you justify buying them? Obviously if you are rich then what the hell but for your average person how does one balance spending/saving? For example, I live at home and have a decent job. But my bank account isn't growing by the 1k a month it technically should be if I paid rent. I don't know wtf I'm spending on exactly... probably food/bars.

Between computer and car parts I'd like I could probably spend 3 grand in one day... and technically I have the money. But I have people tell me to save every penny you'll need it later! While others say spend it now while you have it , once you have a family you won't be able to afford anything!

Seriously, there is no reason for me to spend 100 bucks to get my windows tinted, or 300 bucks for a new video card for Crysis 3. Going by that logic though I may as well just sit in my room all day eating celery and drinking water.

God damn 1%ers

Contribute money and time to a worthy charity, you entitlement sob.