You Should Know

Im not great with budgeting but this is what I do. I just keep a pool of money for 'whatever' purchases.

It is a good teaching tool for budgeting though, especially with kids or people who never have budgeted (which is most people I’ve worked with, sadly).

I break my savings down into broad categories. It helps keep me honest. I can't imagine the overhead of budgeting for every single item I might need to replace someday.

This is my thinking too. I had a housemate who earned the same as me and paid the same rent, and yet every month he managed to spend all his money while I saved a good chunk. Our pay was okay - not loads, but we lived in an area with a relatively low cost of living so the money went much further than it would elsewhere, so at least saving up a safety net should've easily been doable. I suppose it didn't help that he took every opportunity to go on holiday half way around the world... I don't think I'm miserly, I just don't buy random stuff I don't need. I also refuse to use Amazon, which probably makes things easier.

Yes this post seems to come from a place where savings arent a thing or at least unusual.

Absolutely. I had some TWS headphones that were really good and I actually ended up replacing the battery in the case when it couldn't hold a day of charge because it was worth it. I would much rather repair something than replace it and buy quality that will last as well, both of which are benefited by having the cash on hand. If you can't afford $200 headphones but you can get $20 ones today maybe buy the $20 ones and use them while saving for the better ones. It will take time but you may be able to make the crappy ones last long enough, even if you have to get two sets to make it through.

For that example, it should be in your home maintenance budget. That’s a major appliance. It’s going to fall into the same “major unexpected failure” category as anything else in your home.

Yes, and items seem to be manufactured to exceed their warranty period by only a short time. I assume that an item will last for a year in most cases, or the warranty period if that is longer. For white goods like a fridge or a washing machine I look for statistics and use longevity as part of my purchasing process, so I aim to buy appliances which will last a fairly long time and then save based on that not being the most likely outcome. My fridge can be expected to last 5-7 years, so by year 3 I will have enough saved or room made in lines of credit to afford a replacement. Obviously it is best to have nothing accruing interest so I will tend to pay credit down first but some if the credit cards where I am actually have good terms such as a 36 month interest free period. The utility of money during that time is available for other things and I can reduce my costs in other ways.

For some items yes, but, and perhaps this is privilege from living in Australia, surely if it fails immediately you can return it and get a replacement or refund? Here we have a 12 month warranty on most things but also a reasonae expectation standard, so if it is a larger thing like a fridge or dishwasher we can get more of a reasonable warranty period.

So I guess a better way of phrasing it would include at what point it requires more money from you if it fails? So for a basic electronic thing 12 months would be the minimum that would be covered by the manufacturer and you are only on the hook for it after that time? I know that is not suitable for some other places like the USA where you are often on your own once you leave the store.

Nah, you need different variables for every item. Headphones dont cost the same as tissues.

So x for shoes, y for tissues, z for headphones.

But what about babies? They don't even know what money is!

Few advices are universally applicable. Pick up what you need, leave the rest for others.

I do the pools idea too.

But every Christmas I sum my expected non regular expenses (maintenance fees, insurance, dentists, cloud storage, etc) and divide by 12 to get the monthly cost so I can spread out the expected budget busters.

Otherwise August/September give me a shock - lots of big bills then.