Discuss Latest WCI Blog Post: How to Set Up a Budget, and Why It Can Be So Valuable

[The White Coat Investor]

Talking with WCI Ambassador Disha Spath about how to set up a budget and why it's so vital. Also answering reader questions about doctor income and 457s.

The post How to Set Up a Budget, and Why It Can Be So Valuable appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.



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[8arclay]

Good stuff. I enjoy having a budget, Im well passed the point of needing to but I find it helpful for a couple reasons. The biggest is the his/hers allowance lines. My wife is a spender, if its there she'll spend it, so this puts up guard rails a bit. She will make a bunch of small to medium purchases over the month and use it all. Im an over-saver, I find the budget actually helps me spend more guilt free, it gives me permission to spend. I tend to save up my "allowance" and splurge on bigger purchases a few times a year

Ive sang the praises of YNAB here and elsewhere for years now, its been an integral component to our financial household

[familydocPA]

We are getting to the point of needing to budget for the first time in our lives, just to give ourselves permission to spend. The saver's dilemma.

I started tracking actual spending a couple of years ago though, which was enlightening. It's so easy to say "we spend X per year" and leave out a bunch of things, especially if they are one-time expenses. What we have found is that there are always one-time expenses, the items just change from year to year. We discovered we actually spend twice what it claimed to, which is helpful for planning purposes.

[Lithium]

I have the “pay yourself first” method on steroids. Too many tax deferred accounts and pay has not increased to keep up with the available space . I might need to start selling from taxable to fill up $61k in solo 401k space.

[The White Coat Investor]

I have the “pay yourself first” method on steroids. Too many tax deferred accounts and pay has not increased to keep up with the available space . I might need to start selling from taxable to fill up $61k in solo 401k space.

I've done that before. Also eliminated a taxable account through charitable giving. Four phases in my life so far:

No taxable account.
Taxable account.
No taxable account.
Taxable now largest account.

Good problem to have.

[pit.alumni]

I have used QuickBooks to track my spending, income and RE investments for years. So it is easy for me to look back over a year and see exactly what was spent on anything, eating out, healthcare, auto etc.....I've never had a budget per se, but rather made sure I saved for the future and lived on less than I earned. I like that I can see where the money went. I'm semi retired now and FI so now my spending is guided by my happiness. My wife and I both drive ten year old cars that we bought used. It would be easy for us to afford something newer, but simply wouldn't bring us any real happiness. But business class tickets and a new bike both tick the happiness box. No doubt I could have been FI earlier if I kept a tighter budget, but our course was good and steady and we had fun along the way. Don't forget, the journey is everything.