Am I Spending Too Much Money?
One of the most common questions we get is, “Am I spending too much money?” People always come to us with their rent, cable, car payments, groceries, insurance, all the things we all spend on, wondering “Is it the right amount or am I way off base?”
This question really has two answers: First, you can compare your spending to the official guidelines …though I’m not really sure who comes up with those.
But I don’t think that’s the best or most important measurement.
The first thing I suggest you do is list your financial goals for the next 1, 3, 5 years. Decide where it is you want to be. Then, look at all your expenses for the month. Do I want to spend $100 a month on cable or would I rather knock it down to $50 and put that extra $600 a year towards my financial goals?
So now let’s come back to the original question: Am I spending too much money? I believe the more important questions are, “Am I spending my money the way I want to spend it? Is it doing for me what I want it to do or do I simply pay the amount I do for cable, cell phones, coffee and lunches because that’s what I’m in the habit of doing? Am I spending money on these things because I want to or I am I doing it because everyone else does?
It’s your money, you work really hard for it, and you need to make sure when you look back 10 or 20 years from now, you are pleased with where you spent it, how you saved it and where you’re at.