How do you know if you are spending too much in any one category? Or if there is room for you to reasonably spend more on a particular category in your budget? Pinching pennies too hard can cause any reasonable adult to splurge on impulsive buys, which is counter to Real Life Money's purposeful spending that leads to satisfaction (not a credit card hangover)
The average person spend $2775 a year on home improvements. The good news here is that I sold my house last year and don't have any home improvements! The bad news is that I need to buy some household furnishings like a bed, shower curtain, new bedding, new furniture. I suppose I can hold off on that for awhile.
The average person spends $588 per year on personal care products. I've spent $275 on personal care products and it's only April 1st. May need to tighten the belt here.
The average person spends $749 a year on clothing. I've got $960 budgeted to spend each year on clothes, and I've already spent $360 dollars this year, which is a few over where I should be, and I'm already high on the total budget set. Won't be buying any clothes until May or June in order to catch up.
It's good to do a quarterly check on how your spending habits are beginning to slip a bit. I'm definitely going to watch those areas of discretionary spending that I can control, like personal care and clothes.
Penny wise and pound wise is the way to go...
(Source: Real Simple Magazine, March 2009)
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