Do your spending habits reflect your priorities? This is a tricky question to ask yourself, because you may be surprised at what you find. It will take some moments of personal reflection and honesty. Hopefully your priorities are truly governing your spending habits. This leads to a peaceful life.
First you need to sit down and decide what your financial priorities are. These will vary for everyone, but some common ones are to get out of debt, save for retirement, and pay for your children’s college education. You may want to write down three or four major priorities.
Next you need to look at where you are in regards in working towards these goals. Determine how much money you will need in order to pay for your children’s education, and how much you will need to retire comfortable. Take the time to assess your debt situation to make sure that you know where your really are in that situation.
Then you will need to look at what you are doing in order to achieve these goals. Have you maxed out your retirement contribution limits? Are you putting money aside each month for your child’s education? Have you stopped adding money to your credit card? Do you have the extra money that you need in order to achieve these goals?
Finally take a look at how you are spending your discretionary money. If you are not putting enough money towards your priorities, then you need to find ways to cut back. Eating out and miscellaneous spending money are easy areas to cut back on. Do you need to spend a hundred dollars a month on clothes for yourself? Or can you cut back in order to reach your goals? Are the sixty dollar dinners out worth it, when you consider the long-term ramifications of being able to reach your goals?
If you are working towards your goals and know that you will be able to achieve them, then it is fine to spend your money any way that you want. These are your goals and your priorities. But it can be difficult to look at your child and tell her that you can not afford to help her with college because you have a bad spending habit. Take the time to evaluate yourself before it is too late.
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