I’ve heard a few great arguments made lately about how we make liars out of ourselves all the time with our so-called “priorities.” Many of us say “Travel is DEFINITELY a priority for me” or “I’m serious about getting in shape.” But are these things really priorities? And does the time and money you spend on these things really back up what you’re saying.
Then Steve followed it up nicely on Nerd Fitness by pointing out how messed up we are when we claim we don’t have time to do something that many of us claim we value – exercise.
I found that the same is true for money: How we spend shows our true priorities, not how we hoped we would.
Find Out If You’re a Liar
But how do you know if you’re lying?
Ramit challenged readers to try this exercise::
Write down the following:
- Where do I think I’m spending my money?
- Where do I want to spend my money?
- Where am I actually spending my money?
Look at your results. Many of us claim that we have certain priorities in life, but we make liars of ourselves all the time.
Maybe you don’t even know the answers to some of these questions – and you’re likely wrong about #3 if you never track any spending (trust me, I’ve tested it with myself and friends). It’s stupid easy to get fantastic data on your spending with Mint, so get on it.
Once you’re able to figure out the “how” of what you’re spending money on, see how that matches up with where you want to spend money. For most people, my guess is it doesn’t match up well.
Many of us would probably say something like “Travel is a HUGE priority for me.” Well, how much do you actually spend on travel? How does it compare to what you spend each month or year compared to alcohol, restaurants, cars, rent/housing, entertainment? Now that you look at at,It’s probably pretty low on the list, right?
No one is going to be perfect on where they prioritize their money. But are you getting closer to where YOU want to be with your spending? Or are you moving further away from what you think is most important to you and spending it on what society/others tell you is supposed to make you happy?
What’s the Fix?
It’s definitely a challenge that takes some work to get spending in line with what you consider your priorities. Don’t fool yourself by thinking you’re going to go from spending $300 to $0 a month of restaurants witha snap decision.
But think about how you would spend your money if you truly had no limitations or bills that you consider necessities to pay each month. Seriously, write it down. Now, start working towards that TODAY.
How do you make changes today? You could focus on earning more, but I like starting with spending differently.
Spending less and mixing up what you’re used to doesn’t mean you have to go hardcore frugal. The point isn’t to cut out everything you love spending money on. It’s really about moving the funding around to other stuff that you just enjoy more.
Example: I HATE just about everything about owning a car, so I don’t own one and devote exactly $0 to cars.
If you’re not thrilled about buying lunch every day at work, don’t do it. If driving around in your brand new car isn’t part of what gets you most excited, sell it. If you’re living somewhere but know that you could pay less for another apartment and be just as happy, move.
Then take the money you saved on these things and put it towards what you care about. If you want to take a trip to Europe, save and buy the ticket. If you love eating sushi every week, find the money and make it happen.
When it comes to making sure money gets spent the way you want, here’s a trick for saving money for travel and other things that aren’t consistent expenses: Automatically put money aside savings. It works!
Just set up a new savings account on ING Direct and have a certain amount taken out of each paycheck to go towards travel or whatever it may be. It doesn’t have to be much – maybe just $20 a week. In a year’s time, you’ll have $1,000 for vacationing.
Once you have this money set aside for a certain purpose, it’s harder to make the same mistakes and excuses that you had before. If it’s in a separate account, you’ll consciously have to remove it and make yourself a liar on spending priorities.
What do you wish you could spend more money on? What’s stopping you from doing it?
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