Okay, I’ve posted a similar post about this before, but there is power in this process!
What is Spot Budgeting?
Spot Budgeting is the lazy man/woman’s way of doing a limited form of budgeting. The beauty of this technique is that instead of running your life like a bookkeeper or accountant, you just track 1 or 2 areas of concern to keep the spending in that area under control.
I use it to track my breakfast and lunches, presently I have a weekly spending budget of $20.
So what could you use it for?
- That $4.00 latte
Don’t cut it out entirely, but have a weekly budget of $8.00, track it on a scrap piece of paper… piece of cake!! Don’t cut it out entirely, but have a weekly budget of $8.00, track it on a scrap piece of paper…
- Breakfast and Lunch meals (like me) set a max spending amount and stick to it… (so out of the $60 I use to spend, now I only spend a max of $20). $40 dollars a week now goes towards investments.
- Dinners out per month. Maybe budget a max of 2 dinners out a month
- Fast food dinners out per month. Maybe budget a max of 8 to 10 dinners?
- Entertainment. This is a prime area that you can cut out some of the fat, without living like a hermit. There are many free activities that are still very entertaining. Examples (walking or hiking, cycling, video games – “online or game consoles”. and movie night with friends).
- Common sense thing. You should know what you’re spending to much money on, and be able to create a spot budget for that weakness.
I’ve heard that it take 21 times of doing something to make it a habit. With spot budgeting, I think it’s possible to change your behavior and make it a habit. Then move to the next area you want to have spot budget.
Personally, I’ve been using this technique for the last 25 weeks, and I have to say… it works great!!!
What do you think?