We don’t realize how much marketing we receive throughout one day. Even worse, social media has helped average people market to one another—no evil corporations required.
Therefore, it’s not a question of whether we spend money but how much we spend. With that in mind, let’s find a way to spend but remain under control.
Welcome back to the How to Control Your Spending series (101, 102, 103), where we admit we are spenders and budgeters.
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Spending within reason. How do we give ourselves enough grace to buy what we want but remain on budget? Our budget must be firm yet flexible.
Implementing a daily budget is the best way to purchase what we want without tapping into our inner spending monologue.
How does a daily budget work? A daily budget allows you to track your spending and also your savings. Let’s take a $30 per day budget.
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That equates to roughly $900 per month. First, we decide what falls into our daily budget. This can be gas, food, eating out, clothes, shopping, entertainment, subscriptions, etc.
The idea is to create a balancing act between all your competing spending needs and wants. Whatever you don’t spend on one day rolls over into the next.
If I haven’t spent any money on the fourth day of the month, I will have $120 in my budget for that day.
Conversely, if I spent $120 on the first day, I would need to lower my spending over the next few days to get back on track.
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Using a daily budget isn’t about what you buy but how you balance it throughout the month. If you want to spend $10 daily on Starbucks, go ahead. However, it may lower your ability to go to the movies every weekend.
My experience with a daily budget. I started using a daily budget when I arrived in San Diego. At the time, my daily allowance was $50 per day and included gas, food, and entertainment.
Since I retired and moved back to Pensacola, Florida, my wife and I each have $25 per day for our daily budgets.
I love the daily budget because I always know where I stand. I can pull up today’s date and see exactly how much money I have, positive or negative.
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If I look and have $200 available, I may take my family to Applebee’s without feeling guilt or shame. If I only have $25 available, I may go to Walmart and get a frozen pizza—no harm, no foul.
I prefer a daily budget because utilizing a lump sum, say $900, will keep you guessing throughout the month.
You wouldn’t want to spend too much upfront because you never know what’ll happen later. So, you may spend the first twenty days of the month protecting your stockpile.
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With a daily budget, you always know where you fall. If you spend $200 on the first, you can catch up to your budget over the next week or so. It’s about maintaining positive control of your financial situation.
A daily budget inside a bigger budget. A daily budget falls into your larger hardcore budgeting situation. You need to decide what falls inside and outside of your daily allowance.
Your household budget may include housing, bills, food, and gas. Therefore, your daily budget would be more like a personal allowance for eating out, entertainment, and individual subscriptions.
Don’t expect to perfect your household and daily budgets in a month. It may take a few months to get it right.
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You may lower your daily budget but increase the family entertainment budget. This way, one person doesn’t feel they are paying for the family out of their personal allowance.
A daily budget plus passive income. Ideally, you want the cash flow from a job or pension to include your daily budget.
Let’s say your family earns $10,000 per month. You would want to have your household, investing, and daily budgets come from here.
However, we always want to make even more money to supplement our household income. I bring in additional revenue from dividends, options, royalties, and rents.
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I like to use my passive income as my fun money and keep my daily budget working in the background. I do this because it ensures I never lose touch with financial reality.
If my passive income dries up, I can quickly put my daily budget as my primary source of transactions. In the meantime, dividends and options serve me nicely.
I usually invest any remaining money in my daily budget at the end of the month. You can handle your passive income and daily budgets differently.
You can always keep your daily budget as your primary source of income and reinvest your passive income to make more passive income.
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I prefer using dividends as my income stream because I don’t have to document anything. It feels more like “free money” to me, but that’s just a personal preference.
A daily budget in the real world. Does using a daily budget help curb your spending? Absolutely. It provides you with a “give or take” attitude to anything you purchase.
If I have $25 per day, and I want to purchase a $60 video game, I have some decisions to make. If I want to eat $12 of Subway every day, it comes at the cost of something else.
Life isn’t about getting everything we want; it’s about compromise. How we spend our money is deeply personal.
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We get our spending habits from our childhood. Most of us spend the next 20 years changing our habits to become successful with money.
Conclusion. A daily budget takes the pressure off of the central household budget and puts the focus on the individual.
Instead of asking the household if I can purchase a video game, I can pull up my spreadsheet and see where I stand.
If I have the money, I can buy it without remorse or guilt. If I don’t have the money, I can go into debt within my budget, understanding that I will need to slow my spending over the next few days.
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A daily budget is about freedom, not restriction. You’ll feel more empowered than ever because you can always “see” your money.
It’s a great feeling to walk into a store with $200 available in your budget. Once you implement a daily budget, your confidence in money will grow like never before.
Congratulations on learning how to control your spending. You will soon become an Elite Saver of America by saving $10,000 in your high-yield savings account.
There are two ways to become rich, and you need to understand them both implicitly; you must lower expenses and increase income.
By doing both of these, you will discover wealth beyond your dreams, but it starts with your inner desire to spend money. If you control that, you can have the world. Good Luck!
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