But you can’t have everything.
One of my new blogging friends (who I basically want to be) mentioned this idea in a post of hers a few days ago, and it’s a great point.
With money, as with life, it’s all about priorities.
The first step is to decide what’s most important to you (travel, quitting your job to start a business, buying a house, designer clothes, eating at nice restaurants – whatever).
When you don’t know what your priorities are, your spending doesn’t make any sense. Once you do, you can analyze your purchases and ask yourself if they fit with what really matters to you. For me, that includes:
- Having a home where I’m comfortable (which is why I don’t have any issue with spending on rent for a good place in a good neighborhood, or heat, or internet, or a few little things to make my space my own)
- Relationships with my friends and family (so I never turn down a chance to spend time with them because of money, whether that means hosting in my home, flying to visit, or going out for a drink – in which case I save money by reminding myself that the priority isn’t the drink or the food, it’s the relationship)
- Exploring new places (I make a point to travel on a semi-regular basis, because I never regret it)
- Having the freedom to make my own choices (which is why most of my money goes to savings)
It doesn’t include:
- Name-brand clothes/accessories (I try to buy things that are flattering, on sale – shoutout to the Loft for decent sale prices on cute work attire – and good enough quality to last a while.)
- A fancy car (My car, a 2004 Subaru, runs well, and it’s big enough that I’ve moved cross-country in it multiple times. I’m super happy with it.)
- Seeing movies right when they come out, buying lunch from the deli near work, going to concerts on a regular basis, owning the fanciest technology, cable television, or getting manicures and massages.
That’s not to say none of those things ever tempt me, or even that I don’t go to the movie theater or buy lunch every once in a while. However, when I do, I recognize that I’m spending on something outside of my priorities, and ask myself if it’s worth cutting down on the amount I have available for those, since, as we all know so well, a budget is a zero-sum game.
Your priorities are probably different from mine, and that’s the whole point – they’re personal, and about using your money to work how you want it to.
Figuring out your priorities is an easy way to cut your spending. If you realize you’re spending $25/month at the movies and you could get the same happiness with popcorn and Netflix on the couch – boom, that’s $300 a year. That’s a plane ticket, or a cool chair for your living room, or $590 if you stick it in investments that grow 7% annually for ten years. On the other hand, if you’re a huge film buff, keep up your movie habit – it’s all about what makes you happy!
You can’t cut all the things you like out of your budget without going crazy. But, you can cut the things you sort of enjoy to make more room for the things you totally love.
Have you cut down on any “likes” to make room for “loves”?