Wednesday, March 17, 2010

Your *Actual* Entertaining Budget

So what was it? A month ago you were challenged to record your entertaining (not daily individual meal) expenses. Was the number lower, higher or just as you expected? For those in the lower or expected category, congratulations! Knowing your habits is the first step. For those with a higher figure this should be an eye-opening exercise.

Know that even your number is lower or as expected, it doesn't mean you're off the hook. There's not rule as to the entertaining part of your budget but it shouldn't be very significant if you're in debt, without an emergency fund and not fully contributing to your 401(k). (If it is, you're basically paying interest, taking on risk and forgoing retirement dollars to entertain!) If you're not in debt, have a six months stash of cash and contribute the maximum amount allowed to your 401(k) and IRA, then it will be your decision as to what is reasonable.

Every LMF4HMW reader can save money using these tips:
* think drinks instead of dinner
* entertain in private homes instead of at restaurants
* instead of funding a huge dinner party bill ask for guests to bring a dish -- not quite "potluck" but it absolves you of feeding a multi-course meal to a group
* host a wine tasting where each guest brings two bottles of wine -- the guest who brings the winning bottle will take all of the second bottles home (i.e., you're off the hook for party favors)

* think brunch instead of dinner -- less wine and courses involved

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