Budgeting Dilemma: Balancing Wants vs. Needs

Hi Monzo Community!

I’ve been using Monzo for a while now, and I absolutely love how it helps me track my spending and manage my budget. However, I’m currently facing a bit of a dilemma and would appreciate some advice from fellow Monzo users.

Here’s my situation: I’ve set up a budget for myself, dividing my expenses into categories like groceries, bills, entertainment, etc. Recently, I’ve noticed that I’m consistently overspending in certain categories, particularly in discretionary areas like dining out and shopping for non-essentials.

On one hand, I know I should be more disciplined and stick to my budget to ensure financial stability and save for my long-term goals. But on the other hand, I also want to enjoy life and treat myself occasionally without feeling guilty.

So, my question to you all is: How do you strike a balance between fulfilling your wants and sticking to your budgetary needs? Do you have any strategies or tips for curbing impulse spending while still allowing yourself some room for indulgence?

I’d love to hear about your personal experiences and any advice you might have. Thanks in advance for your help!

It’s a difficult question for me.

Here’s the way I look at it.

I have enough money to upgrade all of my IT (phone, tablet, computer etc) and it wouldn’t really make any difference to my finances.

But one of the reasons I have all that money is that I havent upgraded all of my IT.

The question you (and I) have to answer is: are you happier with the money, or happier with the stuff?

And if you are happier with the stuff, would you still be happier with that new MacBook once your boiler explodes?

My approach is to set up a standing order for savings I know I can afford, and not touch that. Anything extra that builds up in my current account is there for whatever I want.

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Probably a question you need to ask yourself, can you resolve some of the joy you gain from spending on activities, by trading them for cheaper or free options?

Ie eating out, maybe host a meal for friends and whoever, and each bring a dish?

Or go to someone else’s place for a night in with the same idea?

If not, then your budgets are too restrictive for your lifestyle and you’d need to adapt them to accommodate.

30 second/one day rule.

I used to be really bad at impulse spending, to the point I’d justify that I ‘absolutely needed’ this item and would buy it.

Now, If it’s a shop I’ll purposely walk out and wait for a few minutes, before either going back in or just walking away. Online - I’ll never buy something on the day I decide I need it, if it’s a large purchase.

What I tend to find is that if after a few days I actually do need, or still want it, I feel the same. If I come back to it and now think “I don’t really need that” then I never needed it in the first place and don’t buy it.

Hope this helps.

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Pay myself first. On payday money goes to savings/investments etc.

Then I track what I spend, compare that to what I’ve spent previously. But then I will resist spending on a work lunch and then buy something expensive. I like spending money. But I also get a sense of achievement by saving.

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To be fair, I was making the comparison between discretionary spending (or overspending) and long term goals - not an emergency fund.

To answer your question (as amended); I wouldn’t be happier with a new MacBook if it meant I couldn’t go on holiday next year - which is why I still have an 8 year old Mac.

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