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To: McGavin999
It's like people counting on a bonus or a contribution to your 401k, don't ever count it as part of your wage, consider it a gift, then if you don't get it you're not stuck.

One of my basic rules of living: Overestimate your expenses and underestimate your income, and you'll feel like you are living well and still be able to save.

I always round my expenses up when keeping track of what I spend (usually to the nearest $100) and always round my income down (usually to the nearest multiple of $500). Not only does this make it easy to keep track of roughly how much money I have in my head without spending time with a calculator or software, but every couple months I go in and look at my checking account and find out that a couple thousand extra dollars have materialized that I didn't account for that I can put into savings.

It sounds kind of stupid, but I've used it for years because of two benefits: First, the accumulated rounding error ends up being a lot of money that I didn't count on having in the first place. Second, I don't have to keep detailed track of my money (which I hate doing), because I'll never spend more than I have, which also helps keep me from going into debt. Also, rounding all my expenses up to big round numbers makes it easier to keep track of in my head.

I've estimated that I "created" an artificial windfall of about 15% of my income using this rounding trick. It has always made it really easy for me to save money because I'm not counting every penny I spend; even if I spend all my money by my accounting method, I'll still have a significant balance due to the rounding, and I don't actually have to make an effort to save money. And it appeals to my laziness at not wanting to balance my checkbook and similar. In fact, it works better if you don't balance your checkbook because you might see how much money you actually have left and spend it.

157 posted on 02/09/2003 7:46:36 PM PST by tortoise
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To: tortoise
LOL, I thought I was the only one who did that. Except your rounding is a little larger than mine.
162 posted on 02/09/2003 8:05:37 PM PST by McGavin999
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