Smart Reasons to Save, Use and Invest Money

The Power of Spot Budgeting

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?

 

Latte
Latte

 

  • 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?

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