Benjamin: What Would Happen if You Plan and Budget for All Spending

UH2L’s comment sparked another idea on slowing down the mini David in me that likes to splurge.

So when I want to buy nice things that are somewhat expensive, I plan ahead and I budget.

What would happen if we stop buying everything from now on when we want them and instead plan and budget for it? Want that iPod? Allocate $100 a month towards it with your future paychecks. A shiny looking knife set? Gotta have a plan first.

The idea is simple. Instead of buying something on the spot, you simply delay the purchase by putting a plan together. You would still buy it, just after your future income arrives.

Thinking about this a bit, I see some amazing benefits:

Makes You Wait - As you know, most of what we buy are based on impulse. By delaying the purchase, most of what we really “need” might not even be necessary in a few weeks (or months).
Overspending - It’s much harder to over commit your spending (with credit cards or not) because you aren’t paying for something without the necessary funds. You won’t be caught off guard in a month when your bills finally come knocking on your door.
More Workload - Once you implement this idea, there will be more work with wanting to buy something as there’s actually “work” involved. This has a negative psychological impact to spending in general, which helps you not want to buy (this is the same idea, only backwards, as the positive influence of saving money).
You Don’t Decrease Your Savings - I really like this benefit, since planning for it with future income means you won’t dip into your savings for purchases. The savings might not go up, but the trend long term is still pointing the right way.

Pretty cool huh?

Of course, in order for this to work, there are a couple things to keep in mind.

Discipline - You absolutely need to carry this through. It will be hard at the beginning but it will pay off big time if you stick with it. As with anything else, it will also get much easier once you are used to practicing it.
Do It for Everything - Now that I think about it, forget whether it’s a necessity or not and just implement it for everything unless it’s time sensitive (supplies running out, or emergencies like a flat tire for example). Put everything you want to buy through this system and you will know whether they are really needed or not pretty soon.
Never Hurts to Try - As far as I see it, it doesn’t hurt to give it a go. Just make sure you don’t tell your loved ones that their gift is coming in six months because you read this article. (Note that if you already told them and they egg the screen, remind him/her that it’s the monitor that gets messed up and not this site).