Redirecting spending

My household has not, historically, operated within a budget. Debt aversion, automatic withdrawals for retirement savings, and a whole lot of good fortune have kept us out of trouble.

But one of my goals (which my husband shares) is to be more of a contributor, and one way to do that is to share some of our wealth. As a first step, I proposed that we give away 5% of our take home pay.

When I tried to make a budget so that we could be sure of meeting the 5% goal, I realized that neither one of us had a complete view of our finances. We had some conversations—brief ones, because spending money is fun and talking about it is tedious and tension-creating—and then I tallied 35 days worth of debit and credit card transactions to build a picture of our current spending.

Oh, my. I generally knew where the money was going because, like most women, I make the majority of spending decisions for our household. But it’s another thing to see monthly totals in discretionary spending categories and imagine shrinking those totals.

So rather than thinking of my next steps as “reducing spending,” I’m going to frame the changes as “redirecting spending,” which is something we have successfully done many times before (when our son was born, when we bought a new car, when we needed to pay for a major household repair).

And I propose this as my Spending/Environmental Footprint-Reduction Anthem:

Father John Misty performing ‘Now I’m Learning to Love the War’ at the Minnesota Public Radio studios

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The blogger behind My Simpler Life offers guiding questions for people considering simplifying, including the following questions around finances:

Do you have too many accounts? Too much debt? No automatic savings plan? No spending plan? Are your bills scattered everywhere? Do you have a system for bill paying? What do you do with your receipts? Can you use software to help you simplify?

For day-to-day financial tracking and planning, a friend of mine likes Mint. You can link some or all of your financial accounts to build a complete, continuously updated picture of your spending and saving situation—but that means you have to give Mint access to those accounts. There’s also a new online bank called Simple that offers budget and spending tools. National Public Radio’s Marketplace Money recently outlined some of the concerns around putting your financial data in the cloud; you can read or listen to How secure is personal finance software.

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