Most people don’t really budget for things that are large on a yearly or even monthly scale, but you can and probably should.
For example, I know that I use my headphones a lot and being without them would be really annoying. Budgeting based on buying them asap because I need them is a really painful way of managing that cost because I can’t do anything else at the same time and it is expensive. If instead I set aside a smaller amount while I still have working headphones it is much easier.
My formula for working out the cost is fairly simple. How much does it cost for an item to fill the need? How long do I expect that item to last in the worst case? How much would I therefore need to save per week for that cost to be saved before the current item needs replacement.
My headphones cost around $100. I expect to need replacement not sooner than about 16 months. So I should save $75 per year which works out to less than $2 per week. If I just save $2 per week I will hit my goal of $100 within the year and of something goes wrong earlier I can make the difference up the normal way. If I end up not needing a replacement by the time I hit my goal I can keep saving for a higher cost option or move that saving to another goal to boost that.
Azzu@lemmy.dbzer0.com 9 hours ago
What I guess I don’t get with this advice is, if you have the ability to save $X per week, why do you need to know about your headphones, why don’t you just save $X a week?
I understand that people seem to generally use up their money immediately, but for me, I simply saved whenever I didn’t need to buy something. So in the background, without even thinking about it, money just accumulates. And then, when my headphones break, I just use some of that money that accumulated for headphones.
That obviously only works if you have expendable income. But that’s what the original advice requires anyway, it requires this ability of $2 savings per week, so the expendable income is already obviously there.
I just feel like it’s so much work to do this for every single thing, when instead you could just simply save whatever is “over” your survival needs, and then draw from that fund whenever necessary without thinking about each item individually.
CmdrShepard49@sh.itjust.works 3 hours ago
Im not great with budgeting but this is what I do. I just keep a pool of money for ‘whatever’ purchases.
fizzle@quokk.au 8 hours ago
This. Budgeting is a nebulous topic which means a lot of different things in different contexts.
For a household, if you don’t have any surplus then skip “budgeting” and go straight to minimising costs and increasing income where possible. If you do have surplus then, well… save it for something.
wrekone@lemmy.dbzer0.com 3 hours ago
I break my savings down into broad categories. It helps keep me honest. I can’t imagine the overhead of budgeting for every single item I might need to replace someday.
QuarterSwede@lemmy.world 9 hours ago
It is a good teaching tool for budgeting though, especially with kids or people who never have budgeted (which is most people I’ve worked with, sadly).
wrekone@lemmy.dbzer0.com 3 hours ago
I didn’t budget for much of my adult life because I had barely enough money to get by. That changed,.and I had to learn how to budget because I knew I would still be living hand to mouth if I didn’t. No matter how much I made.
GandalftheBlack@feddit.org 4 hours ago
This is my thinking too. I had a housemate who earned the same as me and paid the same rent, and yet every month he managed to spend all his money while I saved a good chunk. Our pay was okay - not loads, but we lived in an area with a relatively low cost of living so the money went much further than it would elsewhere, so at least saving up a safety net should’ve easily been doable. I suppose it didn’t help that he took every opportunity to go on holiday half way around the world… I don’t think I’m miserly, I just don’t buy random stuff I don’t need. I also refuse to use Amazon, which probably makes things easier.