Good morning Dinks. Let’s talk about my favourite subject…spending money. As you know I am a reformed spend-a-holic so discussing how we choose to spend our money is near and dear to my heart. Now that I am more financially responsible I still like to know how other people are spending their money. I know that I got into debt by spending carelessly on things that don’t matter such as clothes, restaurants and vacations. Now that I manage my money wisely I spend money on groceries, household items and things for our apartment.
One of the major habits that I changed after I decided to live financially responsible was the way I paid my bills. I used to pay my bills in full as soon as I got them – which I couldn’t afford to do. So then I ended up using debt to live until my next paycheck because I spent all my money on paying bills. This was a really bad financial habit – only I didn’t know it at the time.
Afford to manage your money
Now I don’t pay all my bills with one pay check. Now I split all my bills down the middle and pay half of the total amount each time I get paid. It’s much more manageable and it fits nicely into my budget.
My budget also changed greatly over the years. I used to think my budget was the amount of my paycheck and I spent it until the money was all gone, this was usually within a week. Then I would live on credit for the next week until I was paid again. I don’t have to tell you that this was a really bad financial habit.
Set good financial habits
Now I set aside a set amount (percentage) of my paycheck for food and housing costs, I include an amount for savings into my budget and then I spend the rest on personal items and entertainment. I also like to keep a floater amount (a minimum) in both my savings and checking accounts in case of an emergency. I know that I could save even more money for my short and long term goals, but I choose not to. I save what I think is a good enough amount and I enjoy the rest of my money.
So many reformed spend-a-holics go to the extreme once they see the light. They go from always over spending to never ever spending a penny more than they need to. I could have gone this route, but I am grateful that I didn’t. I did not take that extreme measure because I still like to enjoy spending my hard earned money on nice things. The difference is that I now spend my money on things that are worth the cost like nice vacations and quality furniture for my home etc. I don’t splurge very often and I always second-guess my purchases before I make them. I don’t want to work hard and not be able to enjoy the fruits of my labour – so I spend moderately while saving at the same time. I guess I found the perfect balance between spending and saving.
Photo by orphanjones