Forget keeping up with the Joneses -- try instead to get down with the Smiths.
We humans, particularly in the States, have this built in awareness of the people around us, and how good they have it.
Their grass may be greener because of the chemicals.
We have this insatiable desire for MORE, and many of us hold the belief that a little bit MORE will make us Happy, Healthy, more FUN, WISE. The trick to all this is that research suggests that beyond a very basic level, MORE doesn't actually improve our condition.
So what's the sneaky budget lesson in this line of thought? Rather than seeing the neighbor with the BMW as an inspiration, look past her to the neighbor rocking the Honda and getting by just fine. Or after flipping through the house plans for 3000 sq ft suburban options for a 4 person family, jump online and check out the apartment listings in Tokyo. It is healthy to be reminded that there are plenty of people out there - not just getting by, but THRIVING - on LESS than we consider "normal".
The Joneses may have more, bigger, nicer, fancier...but adjusting your budget to the Smiths who do just fine with less may just yield a positive nudge to your household budget and state of mind.
Write it down. Be honest.
"we more or less spend one salary and save the other"
"I "max out" my 401k"
"the best cable package just costs a little more"
People who are otherwise pretty sincere about wanting to be more intentional and responsible with their money will often fall into the trap of using approximate language when describing their spending. Best practice with the household budget is to be as explicit as possible, to put it in writing, and to be totally honest.
The difference between a $70 per month cable package and a $100 per month package is not "a little more", it's 42.8% more, $30 more per month, $360 more per year, etc. That's not to say that your family cannot choose the $100 package -- it just means that you really understand the impact to the household budget.
Let's face it - sometimes we are all going to go "off budget" for a treat, a cheat, or a splurge. The sneaky budgeter approach is to make the "cheat" a part of the budget! That's right -- build the cheat right into your plan.
Sweet, sweet anticipation!
Research suggests that people get as much (or more) enjoyment out of planning a vacation and looking forward to it than they do the actual event. The same dynamic can apply to other uses of your household finances. You really like that fancy coffee drink? Pick an occasional schedule for enjoying it and do not splurge in between. By choosing to schedule the occasional budgetary indulgence, to plan it out and to approach that spending with intention, your budget benefits in several ways: you spend less, enjoy more, and exhibit more discipline.
This has been a tough week or so in the stock market. All of the major index numbers are off significantly:
Times like these tend to give some people indigestion, and it honestly can be a little trying to wake up each day and check in with the market only to see that, yep, it's down again today!
However, these times are actually something that "value" investors are always watching for, when other investors are getting scared and some stocks are oversold.
The value screen that we run regularly at DRW Financial has been stuck on ~ 40 stocks that match our parameters for more than a month, but this morning the search turned back 54! Of course, all of those will not turn out to be a solid fit for our investing philosophy, but simply having more options is a positive thing.
David R Wattenbarger, president of DRW Financial
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