TAKING THE MILLIONAIRE APPROACH TO SHOPPING

Do you know how much you spend on shopping every year? If you have to, grab your credit card statements and your checkbook and tally up your expenditures to get the true answer. 

According to the authors of the best selling book, The Millionaire Next Door, most millionaires know how much money they spend annually on household expenses including what they shell out for things like clothing and shoes. The idea is that people with money control their spending by setting an amount they will spend on items for the year. They stick to the plan. Thus saving/investing money instead of spending it.

I did the math and my clothing and shoe total for 2008 comes to approximately $700 for 9 months. This amount is definitely lower than previous years. (I easily tripled that amount in 2006.) But I can honestly say I thought I was spending much less than that.

So the question is, if you don't know how much you're consuming, are you consuming too much?

Comments

[The August Deed Co.]

I do my wardrobe totals too.
I have spent an enormous 1900 this year.Shameful. I have been better in previous years. Our eldest sister says she has spent around 400 for her self and 350 for her hubby and son this year.
I have twin sons who get enough blessings via gifts that I rarely have to shop for them right now.I NEVER CHARGE CLOTHES,in my defense.

[Mo]

I too have read the Millionaire next door, and totally admit that this is an area that I TOTALLY and VOLUNTARILY slack on doing the totals for. I am almost scared to do it! Another easy way to track this is through MS Money. Every time you import your bank statements you can assign a catagory to each expenditure. Then you can at any time look at a pie chart or %'s of what's spent in each catagory. For me I needed to remind myself about how much I was spending annually on sbux:-) Good job Nosh to only have spent $700 this year!

[STYLEnosh]

Someone's been shopping, August Deed. ;) I think it's fine to spend the money as long as you're handling your fiscal responsibilities elsewhere and you're paying with money in hand and not plastic in wallet. Sounds like you're doing that so shop away. You should hit $2000 by December! lol

[STYLEnosh]

Thanks for the advice on MS Money, Mo. Obviously I need to use a software tracking program because I thought I only spent about $400 this year. But my love of shoes is definitely keeping my spending budget out of whack. $700 is low for me but it's about $500 too much! I'm gearing up to do better in '09. ;o)