[Severian]

Originally Posted by !@#$%!

from the library, yes?

--

i'll give you the barebones explanation (this is bad, because it leads to wide misinterpretation as the internet illustrates)

basically she splits your income into 3 parts: needs, wants, and savings

needs are very specifically defined, not as in "i need this" but in very specific ways for which you need to read the book. like, $200/mo a week for grocery is your "needs", whatever you buy above it is wants. this due to the department of agriculture's etc etc. but the other things is like housing transportation etc etc.

but basically you want all your mandatory financial obligations to stay at/below 50%

the reason for tis is that if they're above that% you're gonna be always stressed out/under the gun/ under pressure with no money to a) save or b) have fun, and you might go into debt whenever you wanna just relax.

for wants she allots 30% of your take-home pay and this is dedicated exclusively to fun. that includes your fancy beer or comic books and computer games or whatever *as long as it's not on contract*. (so, netflix qualifies, but a 2-year cable deal you must pay or face fines, is a "need")

the great thing about her is that unlike other writers (dave ramsey for example, and various "extreme" bloggers)she makes allowances for fun & life even within the mainstream consumerism. BUT she puts a limit to it. and because it's a separate bracket from your needs you don't have to fear that your beer money is gonna eat into your mortgage payments. they go into different buckets/envelopes

but some people do that, go overboard with wants-- some people think they "deserve" this and that and the other and then get into shit for it (i have a friend just like that. "deserves" trips she can't afford and deserves to get carryout from whole foods every day and then now is fighting megadebt. but anyway...)

for savings warren says 20% and explains to you why and how etc. "savings" however includes stuff like debt repayment-- anything that goes toward increasing your net worth because that's the true measure of poverty and wealth. if you make $30K a month and have to pay out $31K every time, you're broke.

so the way this works a little bit is like bodybuilders with their macronutrient ratios.

again unlike other pf writers she doesn't ask you to pinch pennies and track every last cent and spent your saturday night poring over your receipts (other people do, and that's just impossible to maintain for most people).

instead she just asks you to stick to the ratios, and enjoy life while your money is on autopilot.

of course you need to carry out your periodical audits and track every cent, but that's only at the beginning of the experiments and then as things change or if something is broken. like getting an x-ray. you dont' need daily/weekly/monthly x-rays.

anyway i'm letting you know this so you know what to look forward to. it's the easiest, most honest, most existentially significant plan i've ever come across-- and i've read tons of books about this subject, from the douchy to the insane. and it works, it really works, and i swear by it. the categories and ratios make a ton of sense and are "real" because they reflect how money really works in our lives.

okay i gotta go drink beer now. which is a want. ha ha ha ha ha ha

Thanks!

I did read a pretty exhaustive synopsis (that's not the right word though is it? Yeah? Nah? Who cares) before I even looked for it, but what you've said here is super helpful. The mechanics of this make sense to me.

To be honest, I'm usually OK money-wise even though I don't make what I once did. Part of the reason for that is that I moved from the city to the relative boonies, and inherited a house. I can't believe how much cheaper it is to live in nowhere's asshole than it ever was to live in the heart of everywhere. It's depressing at times, but good for the finances.

My PROBLEM is that I've really only known two ways of living: 1.) making slightly more than I need, and 2.) making much, much less (e.g. 2014 unemployment, grad school). Now I'm making less than I was in 2012 by a pretty wide margin, and can no longer afford to, say, buy iPads just because I fancy an iPad, or travel. As I said, I'm usually OK, but I need to learn how to deal with suspense expenses -- like a new furnace plus paying nearly a grand in taxes plus getting my car fixed all in one terrible 4-week period -- without absolutely fucking losing my motherfucking mind.

So I'm totally down. I'll let you know how it goes and how I like the book. I love Sen. Warren, btw. I like to watch videos of her hurling questions at Garsuckkk and company on CSPAN just because she talks like she gives zero fucks about coming across as a "bitch," and in fact doubles down on the things that sound the "bitchiest." Bigger cahones than any man in the Senate.