You spend even when you don’t

Ramit Sethi · February 14th, 2006

A couple of weeks ago, I went the entire week without spending one cent. I was really proud of myself. But then I realized that even when you don’t spend money, you really do. With car payments, rent, food, gas, etc, you probably spent over $60 today–even if you didn’t take your wallet out once. Now think how much you have to make every day to break even.

Just a quick thought that occurred to me.

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  1. Average $50 / day => $1500 / month => $ 20000 / year

    Man, that sucks. Even $50,000 income sounds like a minimum wage in today’s world. I am gonna try not to take out my wallet one week every month. Just curious, how/what did you eat?

  2. Ramit Sethi

    I had food from when I went home, and from work meetings. Can’t beat it!

  3. Hi everyone,

    I’m looking to move in the next couple of months, and I’ve heard from different people that you should have so much saved before you make a move. I have a very stable income, but the move will increase my expenses by about $900.00 a month. Is it wise to, having invested some, take my chances with the increased expenses or wait for the investments to pay off some first, anticipating that there will be some increase to help with expenses later on?

  4. Lets see, I have to pay my cable bill today, so that is $65 dollars. Have to pay for my bike later this month, thats $150, and trying to get rid of all my credit card debt, thats $250 a month. So that adds up to be … $465 a month times 12 months is 5580. Thats a lot of money for a college student! I have however been doing really well recently in not spending money. This week I haven’t spent a dime out of my wallet and last week I don’t think I did either.

  5. Ramit Sethi

    Mike: Don’t forget about your Christmas gifts, your vacation, repairs for your bike, eating out, books/gifts, and other non-obvious spending.

  6. i’m known to not pull out my wallet for weeks at a time, except to pay those non-discretionary items such as rent, utilities, previous credit card debt, etc. most months i won’t put out a dime for myself that isn’t completely justified! i guess i’ve always been that way, it takes a lot for me to go out and spend on something just for me, for fun. *sigh*

  7. I kind of meant not to account for those, although I didn’t really think about it. The things I listed are just bills I know I have to pay every month.

    For bike repair, I do all of my own work, or I have a friend of mine help me in exchange for a 12 pack, so that helps cut costs dramatically by only buying parts.

    As for all the other stuff, I never really noticed myself spending it before November when I lost my job. After losing my job I made sure to only spend money on what I had to and now that I have gotten another job I make sure to keep track of close to every dime I spend. Having Quicken with the ability to download all my statements from my Banks and credit card company helps so much in being able to do this. The graphs that Quicken generates also are a great tool to see where I am spending the majority of my money.

  8. James V Mathew

    I am used to keeping a daily account book which i will update after coming from work, any other means of keeping an update on expense?

  9. Matt Bolen

    Personally I pay for everything on my credit card. At the end of the month I see what areas I spent money in and adjust accordingly. I have heard people using envelopes w/ cash for each category of expenses and when the money runs out of the envelope then thats it for that expense. Go with whatever works for you.

  10. And I thought I was the only person who put everything on a credit card to know where the money went. Good to hear I am not alone Matt.