Assuming you DON’T track how much you spend in expenses on a daily basis, and that you do spend on miscellaneous items that you haven’t budgeted for (if you even have a budget), is spending $48 on “I don’t know” seem reasonable to you?
That’s the dollar figure given on average when researchers surveyed Americans to ask how much they couldn’t account for on a weekly basis.
$48 x 4 = $192, almost $200 being unaccounted for that’s spend per month!
For most of us buried in debt, $200 can be quite significant, but if you have a general idea of “yes, it’s postage stamps, the odd chocolate bar here and there, and a lottery ticket, plus other snacks and coffees for when I’m out running with the kids”, then $48/week might be reasonable for you as a petty cash fund to dip into.
They were also assuming that this $48/week was spent on ‘useless’ things like (coffee, or snacks), although that may be debated, that isn’t always the case. That $48/week may have been on buying tokens to use public transportation, but you just never accounted for it, because you never bought a monthly pass, but just whenever you need the bus or subway. But even if it isn’t ‘wasted’ money, it might still be a good idea to create a fund for it, and see whether or not you still spent $48/week on ‘stuff’.
I’d personally suggest tracking expenses even just for ONE month, and seeing what you spend it on. It can make a real world of a difference for you to see where it’s all going, and even if you don’t want to change your habits and still want that $5 cup of joe in the morning, at least you’ll now be able to say where that $35/week of the $48/week is going, which only leaves $13 unaccounted for, which seems more reasonable to me.
Your money is personal to you, and if you want that $5 coffee in a morning because it helps you stay awake and feel good, and you don’t spend $50 in shops every day shopping for another retail pick-me-up, then by all means go for it.
All I’m trying to do is put into perspective that you may be able to take a cut in certain areas depending on what your goals are for the future: to be debt free? To own a house? To own every pair of Manolo Blahniks available?
If you are still wondering where that cash is going but don’t want to track expenses (assuming you use credit cards and not cash), try a cash budget and see how you do.
- December 2007 Update on Finances
- January 2009 Budget
- Not to jinx myself here…
- Random thoughts
- FB’s Financial Goals for 2008
Ms. M&P
on Sep 22nd, 2007
@ 2:51 PM:
Oh man. I can’t imagine not knowing where every dime goes! I’ve even started keeping pretty meticulous tabs on my cash spending. I hope I won’t always have to be this careful, but getting out of debt is paramount for me and every penny counts! I agree with you that everyone should look at what they spend in each month. It really helps you budget better!
Fabulously Broke in the City
on Sep 22nd, 2007
@ 3:30 PM:
Ms. M&P: I’m really really happy that I started my 5 Excel Sheet system. I love being able to know at any time, anywhere, how much I have in any bank account or owing on a credit card and what’s waiting to be paid off…
My budgeting skills have improved tremdenously with my system!!
Mrs. Micah
on Sep 22nd, 2007
@ 8:59 PM:
My Misc. fund is $25 per month. It’s for things like birthday presents…normally there’s not more than 1 of those per month.
Of course, I budget for dates and clothes and the like…and keep track of where the money goes.
Fabulously Broke in the City
on Sep 22nd, 2007
@ 9:23 PM:
Mrs. Micah: Same here. I don’t like having a huge miscellanous fund. Actually.. my “misc” fund doesn’t even exist. I have a category for EVERYTHING, and usually know ahead of time whether I need to budget it or change the name of that budget to “gift” or “date” or whatever….