Spend your money where you want to spend the most of your time
You know the saying “put your money where your mouth is”?
This is exactly it.
Like going on vacations? Save your money for them by cutting out other unnecessary expenses.
Hate paying student loans or debt? Save as much as possible and clear it ASAP.
Enjoy eating? Spend more of your budget on nicer food, but cut your budget elsewhere.
Hate paying bank fees? Stop being lazy and walk the extra 3 blocks to your bank’s ATM.
It’s pretty easy to figure out where people prioritize activities, by looking at where they spend their money, so the next time you do a review of your expenses for an entire year, keep in mind that the top 5 categories of where you spend your money on, are what you prioritize in life.
Take for instance, my 2012 budget roundup, my top 10 expenses for the year were (in order):
- Rent: $11,385.23
- Wardrobe: $9552.13 — Err.. I’ve already instituted measures to cut down!
- Travel: $7083.48
- Groceries: $3697.15
- Work: $2423.75
- Household: $2189.37 — This included household equipment like pots and pans
- Toiletries/Makeup: $1890.67 — OUCH! I’m also on a ban for these items
- Miscellaneous: $1552.75 — NO IDEA what this was, hence why I have more categories
- Transportation: $1446.93
- Medical: $1137.45 — Includes health insurance and seeing the dentist
As you can see, I’m vain (wardrobe & toiletries/makeup), always traveling somewhere (due to the nature of my job), and constantly stuffing my face with homemade food.
Anyway, this is a good exercise to go through to understand where your money priorities lie.
DO YOU DO SOMETHING SIMILAR?