Well any plan is better than no plan, but 30% on "fun" sounds excessive to me. Do it like a company. You will have fixed costs and variable costs. List those, and control the fixed costs and have goals to reduce the variable costs. If there is extra, save it all.
@Anonymous wrote:I saw this article today:
https://www.self.com/story/how-to-make-a-budget-503020-rule
Do you all feel like it is a helpful starting place for someone who is very new to thinking about budgets?
I am not asking for myself. My own savings percentages are a lot higher than they recommend, but if I were to describe what I do to a "newbie" it would scare them off of even trying.
If people can suggest better intro articles or other resources I'd be delighted to see them.
Unfortuntly telling a lot of people to save 20% of their income will scare them off. So many people live paycheck to paycheck they just can't see a way out of that. For me being unemployed did it for me. I had to adjust to a lot less money and once I got a decent job again saving became easy. Not the way it should be done, but it worked for me.
Yeah I agree that most people live paycheck-to-paycheck, however I bet if you asked them point blank they would deny they do out of the stigma associated with that phrase.
In my opinion I unfortunately think that unless a person comes from a household that taught financial responsibility, have gone through financial hard times in the past or just find financial responsibility a hobby, people will not want to set aside anywhere close to 20% for savings. But agreed that any plan is better than no plan at all for sure 
Sometimes life's little mishaps and hardships are the kick in the pants and wake-up call people need to re-evaluate their spending and how that impacts their future.
@MakingProgress wrote:
@Anonymous wrote:I saw this article today:
https://www.self.com/story/how-to-make-a-budget-503020-rule
Do you all feel like it is a helpful starting place for someone who is very new to thinking about budgets?
I am not asking for myself. My own savings percentages are a lot higher than they recommend, but if I were to describe what I do to a "newbie" it would scare them off of even trying.
If people can suggest better intro articles or other resources I'd be delighted to see them.
Unfortuntly telling a lot of people to save 20% of their income will scare them off. So many people live paycheck to paycheck they just can't see a way out of that. For me being unemployed did it for me. I had to adjust to a lot less money and once I got a decent job again saving became easy. Not the way it should be done, but it worked for me.
Personally, I was taught financial responsibility and to live below my means. I didn't do that initially but past few years, I have done that more then enough to cover for when I wasn't. I think it's something that should be taught in college as a mandatory class. I definitely do feel for people living paycheck to paycheck and it's tough. But as before, it's the little expenses once can minimize and save, also, start putting a few dollars aside every month. Little things like this snowball. Also, getting a side job is another option if one has the time for it. If one can start saving even 5%, that's better then nothing. Then slowly work your way up. I think it's a bit daunting and tough to automatically going to 20%.
@Anonymous wrote:Yeah I agree that most people live paycheck-to-paycheck, however I bet if you asked them point blank they would deny they do out of the stigma associated with that phrase.
In my opinion I unfortunately think that unless a person comes from a household that taught financial responsibility, have gone through financial hard times in the past or just find financial responsibility a hobby, people will not want to set aside anywhere close to 20% for savings. But agreed that any plan is better than no plan at all for sure
Sometimes life's little mishaps and hardships are the kick in the pants and wake-up call people need to re-evaluate their spending and how that impacts their future.
I also lean toward this line of reasoning.
The problem a lot of people have with budgeting isn't because it's hard or complicated, it's because they lack the willingness to understand and accept where they really stand financially and live to that standard for a better future. I'll boil it down further: they lack the ability to delay gratification (the marshmallow experiment and its long-term outcomes is a fascinating side-read for those who don't know about it, by the way).
In an average part of this country, an income of $50,000 is livable, but not with luxuries. Yet, many people in that income ballpark think they can treat themselves to new cars, electronics every few years, or a spacious home (1,000 square feet is plenty for a family of 3, but good luck convincing a family in most parts of the country that they can or should live in anything less than double that). I'd even say some in this category think it's beneath them to not have these luxuries, as they believe they worked hard and are entitled to treating themselves. Of course, they are only able to buy such things by forfeiting a budget, saving, or any realistic plan for a retirement, yet still pat themselves on the back for feeling successful and/or show off their newly-acquired junk to their friends. This sense of inflated worth and impulse to experience material pleasure in the present is where the problem is, and why this group of people are unresponsive to budgeting advice.
It isn't until something happens that kicks them back to reality that they can begin to learn. Hardship has a wonderful way of reminding people of just how little they really need to live on all along. If the lesson takes hold, these people learn and are able to budget going forward. Those who don't are doomed to repeat it.
To be fair, there's also a niche on the opposite end of the wealth spectrum (a really, really small niche but one nonetheless) of people who cannot save, no matter how much they make. These are the professional athletes and lotto winners you hear about who had millions one year and bankrupt the next. The root cause is the same though: these people just can't delay gratification, and have to live the high life right here, right now. I don't think we really deal with this crowd on these forums, though.
@iced wrote:
@Anonymous wrote:Yeah I agree that most people live paycheck-to-paycheck, however I bet if you asked them point blank they would deny they do out of the stigma associated with that phrase.
In my opinion I unfortunately think that unless a person comes from a household that taught financial responsibility, have gone through financial hard times in the past or just find financial responsibility a hobby, people will not want to set aside anywhere close to 20% for savings. But agreed that any plan is better than no plan at all for sure
Sometimes life's little mishaps and hardships are the kick in the pants and wake-up call people need to re-evaluate their spending and how that impacts their future.
I also lean toward this line of reasoning.
The problem a lot of people have with budgeting isn't because it's hard or complicated, it's because they lack the willingness to understand and accept where they really stand financially and live to that standard for a better future. I'll boil it down further: they lack the ability to delay gratification (the marshmallow experiment and its long-term outcomes is a fascinating side-read for those who don't know about it, by the way).
In an average part of this country, an income of $50,000 is livable, but not with luxuries. Yet, many people in that income ballpark think they can treat themselves to new cars, electronics every few years, or a spacious home (1,000 square feet is plenty for a family of 3, but good luck convincing a family in most parts of the country that they can or should live in anything less than double that). I'd even say some in this category think it's beneath them to not have these luxuries, as they believe they worked hard and are entitled to treating themselves. Of course, they are only able to buy such things by forfeiting a budget, saving, or any realistic plan for a retirement, yet still pat themselves on the back for feeling successful and/or show off their newly-acquired junk to their friends. This sense of inflated worth and impulse to experience material pleasure in the present is where the problem is, and why this group of people are unresponsive to budgeting advice.
It isn't until something happens that kicks them back to reality that they can begin to learn. Hardship has a wonderful way of reminding people of just how little they really need to live on all along. If the lesson takes hold, these people learn and are able to budget going forward. Those who don't are doomed to repeat it.
To be fair, there's also a niche on the opposite end of the wealth spectrum (a really, really small niche but one nonetheless) of people who cannot save, no matter how much they make. These are the professional athletes and lotto winners you hear about who had millions one year and bankrupt the next. The root cause is the same though: these people just can't delay gratification, and have to live the high life right here, right now. I don't think we really deal with this crowd on these forums, though.
Nailed it.
