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Affording the Costs of Living

I’ll readily admit that I think about money a lot. Not just money, but a variety of factors that involve money, including savings, bargains, investments and general frugality. It’s more that I see life as a division between time and labor—using the present to prepare for the future and using mental work to prevent being forced into a life of excessive physical work. Work smart, not hard—if time is money you still need a good rate.

One way to balance life and money is to not let small expenses ruin your day. There was a time when getting a parking ticket or a late fee on a credit card payment would have left me completely sour, destroying any chance for me to experience happiness that day. Presently, I’ve learned to compartmentalize things by remembering what I sometimes call the “random fund”.

The random fund is small cache of money I mentally set aside that is used to pay for all the little random things life can throw at you. A flat tire, a cavity filling, a parking ticket—these things come about randomly but are certain to happen in one form or another. These are the breaks, the cost of living. No matter how much foresight you practice, random setbacks will inevitably come about and cost you a few bucks. Prepare for this by setting aside a small amount each month for your random fund. This way, when you drop your cell phone and have to spend $50 or more getting the screen fixed, you can say “oh well, it’s coming out of the random fund.” It can totally reset a suddenly crappy day.

Another way to balance life and money is reformulate how you enjoy your free time. If you’re between jobs and yet your favorite pastime is still drinking Grey Goose martinis in between golf holes, you may be living a bit beyond your means. Maybe you should switch to Pabst Blue Ribbon and table tennis. Or better yet, lemonade.

The point is, don’t let your preset sources of enjoyment send you to the poorhouse just because you’re too lazy to change. While you shouldn’t let money concerns get in the way of your happiness, you also shouldn’t let indulgences get in the way of financial responsibility. It’s not just about you, remember. Think about your wife and kids, or if you don’t have a wife and kids, think about your future wife and kids. If time is money, the future pays dividends.

Guest Post by Melissa



  1. You’re right the occasional $50 surprise should not affect you especially if you have an emergency fund. I like to put extra income toward the large planned expenses. For example, we plan to go to Europe next year and use frequent flier miles for the flight and additional earnings for the trip.

  2. I like the idea of the random fund! Though, I usually budget a few hundred dollars a month of excess “random” stuff that could be unexpected things like that or just going out a night or two extra.

  3. Couldn’t agree with you more. Being frugal isn’t about nickle and diming every decision. It is about making conscious decisions about how to spend your money on the things that are important to you.

  4. This point is so true, little lip service is ever payed in financial planning to the inevitable economic setback that we all have a few times each year. This is why i believe one must sacrifice building another fund along with the regular retirement investments as a safeguard, thus you wont have to go digging into your main funds.

  5. Great idea Melissa. I use something similar with my checking account. I call it my money buffer. It’s serves as both an emergency fund and little mishaps (like speeding tickets).

    I still hate to pay out of it though…

  6. We have an ER fund and a infrequent bills fund that we put money into every paycheck. It seems to helps us cover any curve balls.


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