Budgeting. Even saying the word out loud brings up visions of self-sacrifice, hamburger filler, clunky cars and coffee out of a can. Of course it does, because the history of budgeting is built on the foundation of deprivation, a strategy that does not work for most. We use a different definition of budgeting at 101MoneyTalk.com. Rest assured that our version of budgeting means none of the above. For us, it means being smart, very smart, about how you spend your money. It means utilizing the concept of “utility,” a word we use loosely throughout this site, but in a nutshell measures an item’s ability to satisfy our needs and wants.
Budgeting also means buying smartly. Billionaire J Paul Getty, founder of Getty Oil Company coined a term that we live by. “Buy straw hats in the Fall.” Getty’s story is an interesting one – during the Great Depression when people were hoarding cash, business opportunities were “cheap and profitable.” It was at this time Getty started to invest heavily in oil assets. When people question the wisdom of deploying cash when the country was on its knees, Getty simply replied, “I buy my straw hats in the Fall,” meaning “I buy when prices are at their lowest for items (in this case oil assets) that I know I am going to need in the future . . .”
In this budgeting section, we discuss the concept of buying low now to save much later. You may unconsciously be doing this already – think of your membership to a warehouse club (if you don’t have one, we need to talk).
In Budgeting, we also discuss negotiation, a word that has negative connotations because it often implies difficult chess-board like manuevers that are reminiscent of the hard talks between United Auto Works Union and General Motors; Israel and Palestine; Police hostage situations; car purchases; etc. You can be comfortable that we’re not talking about these intense negotiations. In fact many negotiations are conducted in a friendly manner, where both parties walk away feeling relatively happy – we’ll show you how.
101MoneyTalk.com’s definition of budgeting includes:
- budgeting by timing your purchases (buying straw hats in the Fall)
- budgeting by measuring how much you really want or need the purchase (utility)
- budgeting by negotiating a lower price
- budgeting by comparison shopping (easy in the internet age)
- budgeting by not always purchasing the most expensive option (we turn “buy nice or buy twice on its head”)
Lastly, in Budgeting we deal with the two most difficult issues most people face when setting and maintaining a budget – organization, and “public opinion.”
Without proper organization it does not matter how many of the budgeting strategies above you utilize, because the money will leak out in another direction; also, if one spends money to keep up with the Joneses, often times they will sit next to the Joneses in bankruptcy court. Click on one of the hyperlinks above to read up on your favorite strategy, we promise it won’t hurt.