In the last blog entry we discussed a method determine where you’re spending your money, how to calculate the percentage of your total amount revenue you’re spending on any one item, and then sort those items by percentage.
OK, let’s work with this list today.
But first, take another five or ten dollars out of your wallet and add it to the money you took out before. Put it in your safe place.
First question – it’s an easy one – maybe.
Where are you spending your money?
Again – be honest – don’t leave out anything.
Now cluster the items. For example:
- Rent or mortgage, utilities, lawn maintenance, association fees, home insurances, taxes, should be in one cluster.
- Telephone, TV, broadband in a cluster.
- Car payments, gas, car maintenance in another.
- Groceries, dining out, lunches in yet another.
- Work expenses – child care, lunches.
- Child support, alimony, debt expenses.
- Medical, dental, health club, insurances.
- Clothing expenses.
- Entertainment expenses.
- Gifts, charity, religious donations.
By now you should have a good idea where you’re spending your money — but go through the numbers one more time — and this time sort out those items where you are spending a disproportionate percentage of your money.
This might be a good time to ask ourselves what is important to us — what defines us — what makes us happy. Is it a car or house or jewelry, or designer clothes, or vacations, or artworks, or first edition signed books (OK, that’s me) and why these things are important to us. How do we picture abundance?
Freedom, peace, joy, travel, books, friends and family, Mattie and Jakey (my dogs), the beach, the mountains, my bike, my health, walks, writing, silence, cool temperatures, Jeopardy. I could go on and on.
Not many of these things cost a lot of money, but most of them take conscious work to create.
What is important to you? Write it down and study it. DO NOT skip anything.
There are no wrong answers, so don’t worry about that. Where you spend your money is where you spend your money. What’s important is to know where that is.
In the next several blog entries we’ll talk about waste, excesses, and budgeting. The goal is for us to be conscious of where we spend our money, discover where we can make changes in our spending if we deem this necessary, and then create a budget that will help us do this.
Again, this is not going to be easy. Tough decisions will need to be made!