My Best Financial Advice: Wise Bread
The Consumerist asked some top personal finance bloggers to give a short summary of their single best piece of financial advice. Here's how Wise Bread responded:
When people resist the idea of budgets, the most common reason is that they view the budget as an unwelcome constraint. That's completely wrong. A budget is not a constraint. It is a tool for maximizing pleasure and satisfaction.For more details, see A Budget is Not a Constraint.
— FREE MONEY FINANCE
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Comments:
Great advice, no cliches.
Good advice. I think the great thing about budgeting is it forces you into decision making before purchases.
Sure you can have the "X" but are you willing to give up the "Y" for it?
This is good advice, and mirrors what I've always thought, that a budget is a living, breathing document that is flexible yet provides a framework for your finances a month out, or a year out.
I knew someone fresh out of college once who made decent money but never seemed to have any. Once we sat down and figured out where it was going she saw the light and now owns a house and is saving for retirement and unfortunately not married to me.
Also, I thought Wise Bread was a really cheap brand of bread I could buy to save money, like Wise potato chips.
We've never had a budget that specified how much we would spend on specific stuff, but we budgeted, just the same.
Our method is to avoid coming into contact with our own money. We have money deducted into our 457 plan and any other savings that can come out of payroll deductions. When we get a raise, we pretend it never happened, and continue to live on our previous income.
I saw a co-worker's check stub recently. She's been on the job about two or three years, and makes half what I do, yet her take-home pay was a little higher than mine. If I could deduct more, I would do it. I'm at the max they'll allow. As a result, we're getting close to early retirement, while other people our age are looking forward to another ten or 15 years of working.
Amen- before budgeting, I never would have thought I really had money to spend on clothes and hobbies without feeling guilty or like I was being bad.