Really? What's the purpose? I mean, I have one, but I'm not sure why. Before I had one, I would go to the ATM every time I thought I needed money for something and take out $20. I probably took $60-$100 each week. I think I visited the ATM 3-5 days a week. However, I couldn't tell you what I was buying with that money. Well, maybe I can. If it were a Sunday, I would go to the ATM after church, withdraw $20 and spend it on coffee and donuts for my family and me. Other than that, I can't think of another reason I frequented the ATM.
In November, which was my first month of tracking my spending, I took $100 each pay. That meant I had $50 a week for discretionary spending. The first week I spent the $50 on groceries. Hmmm. That doesn't seem discretionary to me...that seems like grocery money. Last week, I thought I would buy myself a coffee. I didn't need a coffee, but I had the money in my discretionary fund!
I wonder if the discretionary fund is like a mini emergency fund. Maybe you forget to budget for dry cleaning, but you need something to wear. So you have take an outfit to the cleaners and take the money from the discretionary fund.
I don't know. I'm still trying to figure it out. I don't really think I need $50 per week for discretionary spending. Money seems to put a hole in my pocket. If I have cash, then I spend cash.
What about you? Do you have a discretionary fund? If you do, how do you use it? If you don't, why don't you?
Monday, December 10, 2007
What is a discretionary fund anyway?
Subscribe to:
Post Comments (Atom)
5 comments:
Hmm...depends of course. I have a 'blow' category- just for money that gets lost, unaccounted for, or spent frivolously. I budget $50 a month for that. I like a really detailed budget, so I put every other dollar I spend in a category, but that is probably a bit too much for most people.
Do what you want, just have a plan and stick to it.
We call that category a "personal allowance" in our budget.
We basically don't need to be accountable to the budget or each other for that sum of money.
It also what we each use if we want to save up for something bigger.
Like my hubby always is wanting something for his Harley motorcycle and he has to save up from his allowance.
Or if I want more material to sew my quilts, etc.
Even though we don't have to be accountable to the budget or each other for that money, we have learned to be accountable to ourselves.
We have grown accustomed to trying to make every dollar count.
(And we slip up... but we have gotten better than ever, these last few years, about making those dollars count for something).
It's weird, once you start to gain control of your money... the thrill of blowing or spending money on frivolous stuff just sort of disappears.
I don't have a discrentionary fund and I don't carry cash. Cash burns a hole in my pocket -- I spend it, have no paper trail, and can't for the life of me account for where it's gone.
Rather, I pay for everything with one of three credit cards. Every single purchase gets accounted for in my budget. The closest I come to a discrentionary fund are my "other" subcategories in my Household, Housing, and Personal categories. I don't want to be anal about tracking my spending but I think that catchall categories can hide bad spending habits.
Hi Wealthy_1...
I've tagged you with the seven random things meme.
Have fun...
We use our "fun money" for things like lunches out, happy hour, concerts, etc. Basically all fun activities come out of that money. We don't budget anything for clothes or things like that, so that comes out of our fun money too. We each get $100/month and do OK staying within that.
Post a Comment