A surprisingly difficult consideration when you receive a paycheck is deciding what to do with it. With everyone trying to convince you that you’re just one life-changing purchase away from Fulfillment and Happiness, it can be confusing to navigate between the must-haves, the nice-to-haves, and the unnecessary. Plenty of people will tell you to think about Needs vs. Wants, but they don’t often tell you how to distinguish between the two, and will often attempt to impose their own views of Needs and Wants that might not fit your ideas (but will benefit them for you to believe too). A key element to personal finances is knowing your priorities and sticking to them, regardless of what other people are doing or saying, which will give you the confidence to make money moves that work for you. Here are some things to consider when setting your budget:
Keep track of what you generally spend every month to operate, including the must-haves, the nice-to-haves, and the unnecessary. This is always a good place to start, as it will give you an idea of where your money is going.
Attempt to categorize your recurring expenses in terms of must-haves, nice-to-haves, and unnecessary. Be completely honest with yourself: you might realize that things that you think are must-haves are actually nice-to-haves, or even unnecessary. Conversely, small luxuries that you allow yourself might provide meaningful boosts in morale, productivity, and general well-being that increase your quality of life, keeping in mind that health and time are part of wealth too. How much are you spending on these habits, and are the boosts you’re receiving worth at least as much if not more than what you’re spending? In spending in one area, what other areas might you be sacrificing, and are those sacrifices worth it?
Is your current lifestyle one you can imagine living in the next five, ten, twenty years? It is only normal for circumstances to change and priorities to shift over time. This does not mean that finances should exclusively be structured around the future, but being aware that there could be both emergencies and opportunities that arise will make planning for the future feel less like sacrificing the present and more of a motivation to be ready to strike when the time comes.
Once you’ve taken all these factors into account (no pun intended) and recategorized your expenses, cut out the unnecessary spending and rethink the rest. For the expenses that you have labeled necessary, even within categories such as food (restaurants, takeout, etc), what exactly about them makes them necessary? Are there ways to fulfill those same needs in other ways that might be less expensive but equally satisfying?
It takes time to learn! Been regularly purchasing something that hasn’t contributed as meaningfully to your health and happiness as you expected? Stop the next month. Accidentally cut a time-saving habit that you actually need more than you thought? Budget it back in the next month, and figure out if there’s anything else you can cut in its place. Pay off a debt, or receive a significant raise in income? Take advantage of the extra bandwidth to both avoid future debts and add more meaningful boosts to your lifestyle and future.
Cultivating a rational and meaningful relationship with money is a journey not without its ups and downs, but the sooner you start thinking and tuning into what you’re spending on and what you’re getting out of it, the sooner you’ll reach an understanding of what sort of money moves will allow you to enjoy the things that are truly important to you. Whatever it is you’re pursuing, Hush will be with you every step of the way!
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