Discretionary Spending

What is discretionary spending? Looking it up I just found there is quite a difference between disposable income and discretionary income. I always thought it was the same. I like learning new things..

Anyway, I think discretionary spending is kind of a flexible term. What counts as a necessity probably differs a lot between different people.

To us, it’s personal spending, that’s how we do our books at the moment. What each of us spends after we have paid rent, energy, water, petrol and food and stuff like that. The real basics.

I think once you set yourself up, with homewares and kitchen crap, clothes, shoes and furniture you don’t have to buy much stuff. I mean, what do you need?! If you don’t replace items just for a different style or for the sake of Keeping up with the Joneses and the latest gadgets, you just need to replace items if they are broken or become irrelevant. And you really don’t have to spend that much.

So now we are doing our spending diary, we can really see what we are spending exactly. We were never big on shopping and spending money on a whole lot of crap, but it’s really interesting to see what’s happening. I hardly spend any money on extras.

I got shoes, I got bags and I make my own clothes, not all of them, but it helps. I don’t buy shitty cosmetics. We hardly ever go out to fancy events, we are better at creating them for ourselves. Now that we are moving, we stopped buying homewares. But considering we are doing the minimalist thing, we would have done that anyways.

So yeah, I’m thinking hard, but I can’t come up with anything else people would “need to buy for fun”. I know some people have hobbies or like going out and that’s cool. What I’m saying is, you don’t always need the latest things or new things and you can have great experiences without spending a whole lot of money on them.

What do you spend your “extra money” on? Do you really need the treats you buy for yourself?

Spending

Money is one part of my challenge. I decided to have a good look at it and that’s what i came up with.

I wanna stop using my credit card. It’s good to have a credit card for emergencies, like if you’re out of a job or something and have to pay the grocery bills, but you gotta make sure you’ll be able to pay it off. I used to use it when i wasn’t working, before that i left it at home.
If you have control over your spending you should be alright with using it.

Some people seem to be really into impulse purchases and buying crap.
I’m not one of them, so i don’t have to worry about that. If i don’t totally need an item i will think about it for days if i wanna get it. I will think about it for ages.

Some people use the interest free days on their credit cards for investing, paying off their mortgage quicker for example, that might be handy and if you wanna do that you should speak to an expert about that and do some research.

I’m still unsure about debit cards. Is using cash better then using debit cards? What do you think? I think i will stop using my credit card and only use it for emergencies and use a mix of cash and debit cards. I don’t like being in debt, mortgages are freaking me out, coz they are so expensive and i don’t take out loans for cars or furniture or shit like that.

Happy Cash

We spend a massive part of our wages on rent, which is the biggest part, food, utility bills and petrol.

We normally don’t spend money on anything else. Nevertheless, to find out where exactly our money goes and where we can make cuts, we started a spending diary. Good idea, right?! Which means for us to write down everything we spend money on for 3 months.

I don’t wanna do this for ever. And i hate budgets, i don’t think they are necessary for us as we always pay our bills first anyways. The plan is to sum everything up by the end of each month and have a good look at it. Figure out what’s happening. And then do it again after the 3 months are over, decide on changes and implement them.

Another thing we write down is where we buy stuff, for example groceries, which supermarket, farmer’s market. That gives you an idea where your money goes and you can then decide where you do or don’t want to spend your money. I mean you can do this anyways, that’s just gonna make it clearer for us though. Definitely wanna use more farmers markets, see if we can spend more money on them after we saved it at the supermarket.

Have you got any cool savings/budgeting tips? How do you get your finances under control and spend less?