Sunday, June 15, 2008

Flashback Budgeting

What do you consider to be a household necessity? A 4 bedroom house, 2 cars, cable television, microwave, cell phone, high speed internet, DVR, Netflix, computer, Ipod?

Now, depending on how old you are, think back to the 1970s or 1980s and ask yourself whether the above items were a necessity or even available. That is the idea behind a flashback budget.

In the 1970s people generally lived in smaller homes, drove smaller cars (and generally only had one per household) and ate more meals at home. There was also likely no cable bill, no cell phone bill, no internet bill, etc.

If you have been working a budget or spending plan for more than a few years, take a few minutes to review your budget categories and numbers from the past. You may be surprised that even 5 years ago you lived a very good life without a few of today's "necessities."


Focus On Your Money Maker said...

That's a great way to look at it. The hard part for me is budgeting in kid expenses. I didn't have to worry about that a few years ago and now I have two.

Rich said...

Re: One car

Back in the 70s and 80s wasn't having two working parents a lot less common?

With two working parents I think a 2nd car is needed a lot more than in the case of one working parent.

My wife is in school and watches our two boys, and I work all day. We've compromised and one of our vehicles is a scooter.