The twenty dollar rule revisited

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
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pondering
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The twenty dollar rule revisited

Post by pondering » Sat Sep 15, 2018 8:49 am

We had our best month since June!

After terrible spending months in July and September we finally got our main credit card spending below $3000.

I think having each other approve in advance discretionary purchases of over $20 is finally having an positive impact. I check on all spending most days of the week, mostly by monitoring the text messages that occur with each purchase.

What do you do to control your family's spending?
--Robert Sterbal | 412-977-3526 call/text

GoldenFinch
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Re: The twenty dollar rule revisited

Post by GoldenFinch » Sat Sep 15, 2018 9:03 am

We just haven’t increased our spending over the years as income has risen, so it’s not an issue. We also don’t accumulate or want “stuff” anymore, so no “control” is necessary.

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dwickenh
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Re: The twenty dollar rule revisited

Post by dwickenh » Sat Sep 15, 2018 9:09 am

pondering wrote:
Sat Sep 15, 2018 8:49 am
We had our best month since June!

After terrible spending months in July and September we finally got our main credit card spending below $3000.

I think having each other approve in advance discretionary purchases of over $20 is finally having an positive impact. I check on all spending most days of the week, mostly by monitoring the text messages that occur with each purchase.

What do you do to control your family's spending?
I like your idea, but can you just apply it to the half that does all the spending!!

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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pondering
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Re: The twenty dollar rule revisited

Post by pondering » Sat Sep 15, 2018 9:20 am

dwickenh wrote:
Sat Sep 15, 2018 9:09 am
pondering wrote:
Sat Sep 15, 2018 8:49 am
We had our best month since June!

After terrible spending months in July and September we finally got our main credit card spending below $3000.

I think having each other approve in advance discretionary purchases of over $20 is finally having an positive impact. I check on all spending most days of the week, mostly by monitoring the text messages that occur with each purchase.

What do you do to control your family's spending?
I like your idea, but can you just apply it to the half that does all the spending!!

Dan
Both my wife and I don't mind spending money. For me it is often because I get the satisfaction of solving a problem, like when I bought the Google Wifi and when I bought the SSD drive from my main computer.

My wife likes spending money on things that make our house more like a home.
--Robert Sterbal | 412-977-3526 call/text

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Re: The twenty dollar rule revisited

Post by Grt2bOutdoors » Sat Sep 15, 2018 9:26 am

Consider this, most spending is done in lumps. While you may budget say $2,500 a month spending, some months it may come in at $2,000 and some months it will come in at $3,000. The end result? You still spent $30,000 but not evenly over the course of a year.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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pondering
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Re: The twenty dollar rule revisited

Post by pondering » Sat Sep 15, 2018 10:16 am

Grt2bOutdoors wrote:
Sat Sep 15, 2018 9:26 am
Consider this, most spending is done in lumps. While you may budget say $2,500 a month spending, some months it may come in at $2,000 and some months it will come in at $3,000. The end result? You still spent $30,000 but not evenly over the course of a year.
Our Lumps this year:
Jan 5,024
Feb 3,760
Mar 5,621
Apr 3,476
May 5,161
Jun 2,794
Jul 8,774
Aug 3,100
Sep 7,009
Oct 2,947
--Robert Sterbal | 412-977-3526 call/text

JackoC
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Re: The twenty dollar rule revisited

Post by JackoC » Sat Sep 15, 2018 11:11 am

If we have any rule it's implicit and something like maybe 'well north of $500', except for our agreement that my wife withdraws $1,000/month in cash to do as she pleases including saving up and spending several month's worth at once. That was agreed to increase the peace because it annoyed her sometimes when I'd ask about every purchase when compiling the monthly record spreadsheet by category, 28 yrs running. She is less convinced of the need to even track our spending than I am. The compromise is I continue to track but w/ no real 'budgeting' of every day categories and a minimum of her having to hear about it at all. If it were just her, spending might be higher, if just me lower, but it's an amicable implicit compromise which comes out below our means. A key IMO is that the other member of the couple is really as on board with whatever the rules are as the member describing them on the internet.

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pondering
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Re: The twenty dollar rule revisited

Post by pondering » Sat Sep 15, 2018 11:45 am

So getting constructive feedback on the Internet is a problem?
--Robert Sterbal | 412-977-3526 call/text

iamlucky13
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Re: The twenty dollar rule revisited

Post by iamlucky13 » Sat Sep 15, 2018 12:12 pm

I think that's a pretty good rule. Each family might have a different limit, but some value.

My wife and I never had a set limit, but have always had a habit of discussing discretionary purposes. The habit has gotten a little looser as we've gotten more financially secure and developed a good savings pattern.

It has been a conversation I've been thinking of restarting, though - she came home with a piece of art from a street fair last week that wasn't unreasonable, but I do wish she'd brought it up before buying.

Single months with high spending like your July and September are a lot less of a concern if the cost wasn't really discretionary (eg - car repairs or replacing broken appliances). Either way, good job establishing not just an agreed rule for when to discuss purchases, but just as importantly, a habit of understanding your spending.

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Re: The twenty dollar rule revisited

Post by Grt2bOutdoors » Sat Sep 15, 2018 12:16 pm

pondering wrote:
Sat Sep 15, 2018 10:16 am
Grt2bOutdoors wrote:
Sat Sep 15, 2018 9:26 am
Consider this, most spending is done in lumps. While you may budget say $2,500 a month spending, some months it may come in at $2,000 and some months it will come in at $3,000. The end result? You still spent $30,000 but not evenly over the course of a year.
Our Lumps this year:
Jan 5,024
Feb 3,760
Mar 5,621
Apr 3,476
May 5,161
Jun 2,794
Jul 8,774
Aug 3,100
Sep 7,009
Oct 2,947
It seems every two months your lumpy spending is going up by a few thousand. Do some forensic investigation, find out what’s driving the increase in spending. It’s likely not clothing and hair clips for your daughter.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Dottie57
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Re: The twenty dollar rule revisited

Post by Dottie57 » Sat Sep 15, 2018 12:20 pm

Twenty bucks is a small amount these days.

Are you maxing your retirement accounts (401k, IRAs) etc?

What is the money being spent on? More context would help? The biggest problem: it sounds like you want impose the restriction on your family. You need agreement on goals. If goals are agreed on, then when not met a have a discussion.

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Kenkat
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Re: The twenty dollar rule revisited

Post by Kenkat » Sat Sep 15, 2018 12:52 pm

I would look at the lumps and see if you can identify the cause. Are they justified - i.e., that was the month you paid property taxes - or not - i.e. we went on a lavish unplanned vacation?

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Re: The twenty dollar rule revisited

Post by Grt2bOutdoors » Sat Sep 15, 2018 1:03 pm

Dottie57 wrote:
Sat Sep 15, 2018 12:20 pm
Twenty bucks is a small amount these days.

Are you maxing your retirement accounts (401k, IRAs) etc?

What is the money being spent on? More context would help? The biggest problem: it sounds like you want impose the restriction on your family. You need agreement on goals. If goals are agreed on, then when not met a have a discussion.
Small? Why I guess your right but it depends on the stores you frequent and what you buy.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: The twenty dollar rule revisited

Post by Dottie57 » Sat Sep 15, 2018 1:14 pm

Grt2bOutdoors wrote:
Sat Sep 15, 2018 1:03 pm
Dottie57 wrote:
Sat Sep 15, 2018 12:20 pm
Twenty bucks is a small amount these days.

Are you maxing your retirement accounts (401k, IRAs) etc?

What is the money being spent on? More context would help? The biggest problem: it sounds like you want impose the restriction on your family. You need agreement on goals. If goals are agreed on, then when not met a have a discussion.
Small? Why I guess your right but it depends on the stores you frequent and what you buy.
I used to have twenty bucks in my wallet and I felt rich. No more. What have I spent money on? Nice salad fro Cafe Zuppa with greens, fruit and some almonds. 9 bucks. Treat for mom and I after her hair appointment -5 bucks. Go to batteries plus for large packs of batteries - 15. Underwear - 3 pair - $15.

randomguy
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Re: The twenty dollar rule revisited

Post by randomguy » Sat Sep 15, 2018 1:21 pm

pondering wrote:
Sat Sep 15, 2018 11:45 am
So getting constructive feedback on the Internet is a problem?
The question with stuff like this is are you really trying to correct a problem or are you trying to control your spouse. There is a history of rules like this happening to apply to one spouse (i.e. your 10 dollar/day coffee additction doesn't trigger it but here 25 dollar/once week lunches do) a lot more than the other. If your both on the same page fine. But if you are on the same page, you don't really need this rule do you? The spouse will know if it is a yes or no choice before calling.

For me, not spending is easy. You go to the store to buy groceries and gas and what else do you really need? Spending money is the hard part. You need to make conscious choices to do that. And yes I am well aware that a lot of people go through life looking for ways to spend money.

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pondering
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Re: The twenty dollar rule revisited

Post by pondering » Sat Sep 15, 2018 2:14 pm

Yes, the problem is that we spend more than we earn.

Efforts to control both of our spending constantly get bogged down with a discussion of how much is available to spend. I've made budgets, but maintaining them, then being asked where we are only when a purchase came up seemed counterproductive. Now we just review all the discretionary spending.

The main benefits are that we review spending more frequently and that we have a financial question raised every time discretionary spending is over $20.

I think the vast majority of Americans overspend in spite of the fact that they have been told to budget. I'm open to other ideas.
--Robert Sterbal | 412-977-3526 call/text

getthatmarshmallow
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Re: The twenty dollar rule revisited

Post by getthatmarshmallow » Sat Sep 15, 2018 2:24 pm

I think I would be inclined to set a budget rather than a dollar amount above which one had to ask permission for purchases. Suppose you spend $7 a day on coffee and muffins and she goes out twice and spends $60 on housewares and make-up. At the end of the month, you've spent more, but she's the only one that has to ask permission. That wouldn't sit right with me.

Otherwise, budgeting for us works like this: long-term savings comes off the top, then bills and lumpy 'saving' for future bigger bills (e.g., property taxes), then 'saving' for bigger discretionary purchases (e.g., vacation, home projects), and then honestly I don't really care too much as long as we're meeting our goals.

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Re: The twenty dollar rule revisited

Post by Dottie57 » Sat Sep 15, 2018 2:34 pm

randomguy wrote:
Sat Sep 15, 2018 1:21 pm
pondering wrote:
Sat Sep 15, 2018 11:45 am
So getting constructive feedback on the Internet is a problem?
The question with stuff like this is are you really trying to correct a problem or are you trying to control your spouse. There is a history of rules like this happening to apply to one spouse (i.e. your 10 dollar/day coffee additction doesn't trigger it but here 25 dollar/once week lunches do) a lot more than the other. If your both on the same page fine. But if you are on the same page, you don't really need this rule do you? The spouse will know if it is a yes or no choice before calling.

For me, not spending is easy. You go to the store to buy groceries and gas and what else do you really need? Spending money is the hard part. You need to make conscious choices to do that. And yes I am well aware that a lot of people go through life looking for ways to spend money.
One of the keys to stop spending is to not shop for entertainment.

Also plan your spending. Groceries - go with a list and nothing on the list comes home. Same with clothes , shoes, toys for kids, - anything really. I also go to an expensive craft show each year. Go with a budget - intentional spending.

randomguy
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Re: The twenty dollar rule revisited

Post by randomguy » Sat Sep 15, 2018 3:01 pm

Dottie57 wrote:
Sat Sep 15, 2018 2:34 pm


One of the keys to stop spending is to not shop for entertainment.

Also plan your spending. Groceries - go with a list and nothing on the list comes home. Same with clothes , shoes, toys for kids, - anything really. I also go to an expensive craft show each year. Go with a budget - intentional spending.
I am not sure there are general rules. People can bleed money in various ways. Some people buy too much expensive stuff (rent, cars). Some have expensive recurring expenses (200 dollar cable bills, 150 dollar phones, 7 monthly 20 dollar expentures,...)Others take too expensive of vacations too often. Some spend too much on their kids. Some have expensive hobbies (skiing, smoking, lots of concerts,...) that suck up a lot of money. And some just bleed money (5 dollar coffee here, 20 dollar lunch there, ....). You sort of need to know where your money is going. How you handle each case is a bit different.

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Re: The twenty dollar rule revisited

Post by BogleMelon » Sat Sep 15, 2018 3:13 pm

I use YNAB
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Re: The twenty dollar rule revisited

Post by drawpoker » Sat Sep 15, 2018 4:19 pm

pondering wrote:
Sat Sep 15, 2018 2:14 pm
Yes, the problem is that we spend more than we earn.
You have identified the problem but seem stuck on finding a solution. Which you must do soon, as inflation will cause you to get deeper in debt if you don't target the areas where you can cut back.

Since you seem to be the spouse who is more focused on saving, why not offer to take over the grocery shopping? Your wife might even jump at the idea, relieving her of the burden. Whether you do it weekly, semi-weekly, or even daily, you can eyeball prices, decide whether it is worth it to eat steak so often instead of chicken or fish. And learn how to combine coupons with sale items. Choose menus that are based on what's on sale that week, not on what you crave. And don't buy junk food, soda, or convenience items.

If you applied yourself, and were disciplined enough to follow through, you could see savings of 15%-20% on your monthly food expense.

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Re: The twenty dollar rule revisited

Post by pondering » Sat Sep 15, 2018 4:24 pm

She loves shopping, and when grocery shopping goes well, it is a nice diversion.

The problem is our discount grocer, Aldi, frequently has stock outs, and redoing the dinner list for week is an unwelcome challenge after all the effort that goes into it.
--Robert Sterbal | 412-977-3526 call/text

mortfree
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Re: The twenty dollar rule revisited

Post by mortfree » Sat Sep 15, 2018 4:29 pm

There’s a lot of 20’s in 3000.

Stay out of the stores and away from online ordering.

Things don’t make me happy so I probably can’t relate.

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Re: The twenty dollar rule revisited

Post by drawpoker » Sat Sep 15, 2018 4:35 pm

pondering wrote:
Sat Sep 15, 2018 4:24 pm
She loves shopping, and when grocery shopping goes well, it is a nice diversion.

The problem is our discount grocer, Aldi, frequently has stock outs, and redoing the dinner list for week is an unwelcome challenge after all the effort that goes into it.
So, IOW, you are unwilling to make a change to the status quo, take on more responsibility, and really try to attain your goal of staying within budget.

Got it!

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Re: The twenty dollar rule revisited

Post by Dottie57 » Sat Sep 15, 2018 4:47 pm

randomguy wrote:
Sat Sep 15, 2018 3:01 pm
Dottie57 wrote:
Sat Sep 15, 2018 2:34 pm


One of the keys to stop spending is to not shop for entertainment.

Also plan your spending. Groceries - go with a list and nothing on the list comes home. Same with clothes , shoes, toys for kids, - anything really. I also go to an expensive craft show each year. Go with a budget - intentional spending.
I am not sure there are general rules. People can bleed money in various ways. Some people buy too much expensive stuff (rent, cars). Some have expensive recurring expenses (200 dollar cable bills, 150 dollar phones, 7 monthly 20 dollar expentures,...)Others take too expensive of vacations too often. Some spend too much on their kids. Some have expensive hobbies (skiing, smoking, lots of concerts,...) that suck up a lot of money. And some just bleed money (5 dollar coffee here, 20 dollar lunch there, ....). You sort of need to know where your money is going. How you handle each case is a bit different.
I understand. But one way to stop spending is to stop shopping. If you need to shop, the know what you are shopping for and don’t deviate. It can work well.

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Re: The twenty dollar rule revisited

Post by watchnerd » Sat Sep 15, 2018 4:49 pm

We don't have a spending rule in our house, we have a savings rule.

Once we've paid the bills and fulfilled the savings rules, that puts a natural cap on ad hoc spending so much that we don't have to talk about it.

Anything truly big (home remodels, cars, vacations) gets withdrawn from savings and discussed.
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Re: The twenty dollar rule revisited

Post by whodidntante » Sat Sep 15, 2018 5:06 pm

I love a good bargain on something I need, and the inside of my home is spartan. But I spend quite a bit on restaurants and on foreign travel because I really enjoy those things. While I don't consider myself a spendthrift, I spend more time increasing my income than controlling my spending.

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Re: The twenty dollar rule revisited

Post by scottinmet » Sat Sep 15, 2018 5:08 pm

My credit card bills vary from month to month. I have 3 or 4 higher than normal credit card bills per year that are due to things like auto insurance, back to school clothes shopping, and vacations. Your credit card bill is high every other month and then very high for two months. I would find out what that happens.

While commendable, debating every charge over $20 would get very tedious for me and wouldn't last very long. Change spending habits instead of focusing on individual purchases. Figure out where all the money is going using Quicken or a spreadsheet so that you can get an overall view and then focus on areas where you can cut spending. That would be more productive imo.

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Re: The twenty dollar rule revisited

Post by drawpoker » Sat Sep 15, 2018 5:19 pm

Dottie57 wrote:
Sat Sep 15, 2018 4:47 pm
........If you need to shop, the know what you are shopping for and don’t deviate. It can work well.
He needs lots more help than that, Dottie57.

He wrote his wife is doing all the grocery shopping at a store that does not take coupons. With all the big chains nearby that are doubling coupons, that's just nuts. Aldi fools shoppers that they have the lowest prices with their tacky gimmicks like charging a quarter deposit for the shopping cart, and making people bag their own purchases.

Clearly, he could save money by shopping elsewhere, but he posted he is disinclined to make the effort.

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Toons
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Re: The twenty dollar rule revisited

Post by Toons » Sat Sep 15, 2018 5:21 pm

Strict Budget In Quicken
Lived beneath our means.



:happy
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Re: The twenty dollar rule revisited

Post by Dottie57 » Sat Sep 15, 2018 5:27 pm

drawpoker wrote:
Sat Sep 15, 2018 5:19 pm
Dottie57 wrote:
Sat Sep 15, 2018 4:47 pm
........If you need to shop, the know what you are shopping for and don’t deviate. It can work well.
He needs lots more help than that, Dottie57.

He wrote his wife is doing all the grocery shopping at a store that does not take coupons. With all the big chains nearby that are doubling coupons, that's just nuts. Aldi fools shoppers that they have the lowest prices with their tacky gimmicks like charging a quarter deposit for the shopping cart, and making people bag their own purchases.

Clearly, he could save money by shopping elsewhere, but he posted he is disinclined to make the effort.
We don’t really know where OP and wife spend their money. I doubt it is in groceries. He just mentioned one area. They must be spending in other areas too.

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Re: The twenty dollar rule revisited

Post by Dottie57 » Sat Sep 15, 2018 5:30 pm

pondering wrote:
Sat Sep 15, 2018 10:16 am
Grt2bOutdoors wrote:
Sat Sep 15, 2018 9:26 am
Consider this, most spending is done in lumps. While you may budget say $2,500 a month spending, some months it may come in at $2,000 and some months it will come in at $3,000. The end result? You still spent $30,000 but not evenly over the course of a year.
Our Lumps this year:
Jan 5,024
Feb 3,760
Mar 5,621
Apr 3,476
May 5,161
Jun 2,794
Jul 8,774
Aug 3,100
Sep 7,009
Oct 2,947
Can you break down spending in September for us into categories?

drawpoker
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Re: The twenty dollar rule revisited

Post by drawpoker » Sat Sep 15, 2018 5:35 pm

Dottie57 wrote:
Sat Sep 15, 2018 5:27 pm

.....He just mentioned one area. They must be spending in other areas too.
Correction: Over-spending in other areas too. :wink:

If OP lacks motivation to give serious consideration to saving $$ on groceries he is not likely to do price comparison on other consumer goods as well.

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Re: The twenty dollar rule revisited

Post by UpperNwGuy » Sat Sep 15, 2018 5:37 pm

I recommend marital counseling.
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annielouise
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Re: The twenty dollar rule revisited

Post by annielouise » Sat Sep 15, 2018 5:44 pm

Except for the basics (groceries, bills) and predetermined spending (weekly lunch out, gifts), we use the following system.

In Google Keep, we make a running list of things we might want to buy. At the end of the month, we decide if we want to move them to the "shopping" section of the list which means we will actually start shopping for deals on them. Things sometimes stay on the shopping list for a long time until we get around to buying it. We don't make impulse buys.

Of course, occasionally, something has to be fast tracked. For example, our toaster oven died this week. We use it daily, so it already has been replaced.

For reference, here is our current shopping list:

9V batteries for smoke alarms
Flour sifter
Drain enzyme
Back brush
Thermometer
Shoes with removable insoles
Dish rack that doesn't rust
Backup storage device

RickBoglehead
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Re: The twenty dollar rule revisited

Post by RickBoglehead » Sat Sep 15, 2018 6:28 pm

pondering wrote:
Sat Sep 15, 2018 2:14 pm
Yes, the problem is that we spend more than we earn.

Efforts to control both of our spending constantly get bogged down with a discussion of how much is available to spend. I've made budgets, but maintaining them, then being asked where we are only when a purchase came up seemed counterproductive. Now we just review all the discretionary spending.

The main benefits are that we review spending more frequently and that we have a financial question raised every time discretionary spending is over $20.

I think the vast majority of Americans overspend in spite of the fact that they have been told to budget. I'm open to other ideas.
I don't agree that the majority of people spend beyond their means and can't function with budgets. Even if they do, so what. Stop looking for excuses.

Get some control. Very simple. Figure out what you can afford to spend, and don't exceed it.

A former boss's wife spent too much. He complained, she said "earn more". He closed cards, she open private store charges. And it went on. I told him to get her counseling or divorce her. Then again, they went out to eat or got takeout 5 nights a week, and rented 4 movies (Blockbuster days). Goose/Gander...

Relative has no money, plays lottery daily. Told to not bring birthday gift, brings $9 worth of lottery tickets that yielded $2. Some can't be helped.

The other day I spent $89 on brewing supplies, $80 on gas, $75 at the grocery store. No texts. Planned normal expenses.

If you can't function with budgets, perhaps counseling as to why would help. Or try entering every transaction into Quicken, meet weekly, and then stop spending when the limits are hit.

2pedals
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Re: The twenty dollar rule revisited

Post by 2pedals » Sat Sep 15, 2018 7:00 pm

I don't like this $20 rule at all, get a budget. A single month of low spending does not make a new trend. How do you know you are not pushing expenses into lumpy monthly expenses? Looks like you might be spending almost 60k annually on your main credit card.

Suggestion
Put a budget together that your and DW can agree with. Target a moderate decrease say like 54k (if you have the means), split over 12mo and you should be averaging $4500/mo on your credit cards. Periodically (say 3 months) to review your budget for exceedances (yellow alert) on a monthly basis. Smooth out the monthly exceedances over 3 months. Check for exceedances based on a 3 mo. budget before the red alert goes off.

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Sasquatch
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Re: The twenty dollar rule revisited

Post by Sasquatch » Sat Sep 15, 2018 7:30 pm

Would having YNAB, or Mint on each of your mobile devices help raise awareness? Budget available on the fly.

We do Quicken. We are on the same page as far as spending and setting goals. We crafted a budget together. We go through our combined receipts once a week and code them in Quicken with a quick progress review. Week 4 is a recap. Maybe 5-10 min a week spent on this exercise.

The discretionary stuff like dining out goes off the rails occasionally as we both enjoy it. We make adjustments as we go or, sometimes we make a conscious decision to blow the budget that month by a little bit.

The operative word is "we". Its gotta be "we" or it wont work.

Lifes too short.

tesuzuki2002
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Re: The twenty dollar rule revisited

Post by tesuzuki2002 » Sat Sep 15, 2018 7:50 pm

pondering wrote:
Sat Sep 15, 2018 11:45 am
So getting constructive feedback on the Internet is a problem?
:sharebeer :sharebeer :sharebeer :sharebeer :sharebeer :sharebeer

jminv
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Re: The twenty dollar rule revisited

Post by jminv » Sat Sep 15, 2018 7:54 pm

You mentioned farther down that she likes to shop which I take to mean that she is doing most of the ‘discretionary’ spending. The $20 rule then applies mostly to her and could be seen as a kind of control. It might be working well now but it will get old quickly. Be careful with it, particularly since it’s a low limit - her friends might also believe it’s a form of unreasonable control and then you’ll have an issue where you’ll have to ditch it entirely. Your real problem is that your wife enjoys spending beyond your means on discretionary items. I’d be more inclined stop all non-discretionary spending or to disallow all discretionary spending unless the other spouse is present.

You’d probably be better off agreeing to follow a minimalist philosophy (100 item rule, something like that), that would preclude her from accumulating more things without a trade off. There are books and blogs and lifestyle approaches that follow this, I have family members that follow it. I also follow it to a degree. It’s nice because most people view it as a philosophy but it can also be an expense reduction tool. Since it can sold in a philosophical wrapper it is easier to explain/justify why you won’t by the latest fall fashions etc because of a conviction, not because of lack of funds.

I personally like to look at purchases as what a dollar I would spend today would be worth in 30 years if it were saved and invested instead. This doesn’t seem like it will work on your wife, though.

kelvan80
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Re: The twenty dollar rule revisited

Post by kelvan80 » Sat Sep 15, 2018 8:01 pm

Your last thread about this got locked. What does your wife think about the $20 rule? Are you guys heavily in debt or just trying to see where your money is going? Why not just set an agreed upon budget?

michaeljc70
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Re: The twenty dollar rule revisited

Post by michaeljc70 » Sat Sep 15, 2018 8:12 pm

I commented in the other thread that got locked. I think $20 is way too restrictive. Since you are spending more than you earn, it doesn't seem to be working. A budget closely tracked and reviewed monthly (by you and your spouse) would be better IMO. To be honest, this $20 thing seems childish. You are showing over $7k expenses in one month. How much is "discretionary"?

I remember when I was a kid and money was tight. My parents had labelled baby food jars in a drawer. That was the budget. Every paycheck was divided up into a jar. When the jar was empty, that was it until the next paycheck. Obviously old school. With Quicken you can monitor this type of thing closely and adjust quickly.

Caduceus
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Re: The twenty dollar rule revisited

Post by Caduceus » Sat Sep 15, 2018 9:54 pm

I'm skeptical about budget-based systems because it simply takes too much cognitive effort.

It's far simpler to just pay yourself first, set a very high target for savings, and then learn to live off the remainder. You can also set aside money for expenses that occur on an infrequent but recurring basis.

Do people really have time to track every expense or engage in a discussion over every $20 item? If your household budget is $3,000, why not just make sure everything else is moved to an investment account first, then just simply live off $3,000? As you see the balance declining, you will make adjustments to what you're buying.

When I first started this sytem on a much lower income/net worth, it was common for me to eat very, very simply for the last few days, until the pain of doing this forced me to underspend earlier in the month by forgoing frivolous purchases.

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watchnerd
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Re: The twenty dollar rule revisited

Post by watchnerd » Sat Sep 15, 2018 9:57 pm

Caduceus wrote:
Sat Sep 15, 2018 9:54 pm
I'm skeptical about budget-based systems because it simply takes too much cognitive effort.

It's far simpler to just pay yourself first, set a very high target for savings, and then learn to live off the remainder. You can also set aside money for expenses that occur on an infrequent but recurring basis.

Do people really have time to track every expense or engage in a discussion over every $20 item? If your household budget is $3,000, why not just make sure everything else is moved to an investment account first, then just simply live off $3,000? As you see the balance declining, you will make adjustments to what you're buying.

When I first started this sytem on a much lower income/net worth, it was common for me to eat very, very simply for the last few days, until the pain of doing this forced me to underspend earlier in the month by forgoing frivolous purchases.
100% agree.

Pay yourself first to contribute to savings -- acts as a forcing function to live below your means, without time-consuming gimmicks.
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Re: The twenty dollar rule revisited

Post by LadyGeek » Sun Sep 16, 2018 8:18 am

This thread has run its course and is locked (restarting a locked discussion). See: Locked Topics
...if a topic is locked, please do not start up another thread to continue the discussion, at least right away. Such follow-on threads may be deleted without warning.
The locked discussion: The twenty dollar rule

Several posts are trending in the direction that caused the first thread to be locked, which is the rationale for this policy.
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