What are your priorities for your money?
I’m not asking to be airy-fairy. It’s simply been my observation that people who know what their priorities are allocate their money in a way that ensures that their priorities are met.
Speaking for myself, saving for a comfortable – and hopefully early! – retirement has been one my priorities for the past 15 years. So in addition to devouring early retirement blogs and learning about investing, I have made it a priority to save a big chunk of my paycheque and to allocate it towards my retirement fund. That chunk varies between 41%-42% of my take-home pay.
Those of you who follow personal finance blogs know that living on half of your income is considered the Holy Grail, while saving more than 50% is even better.
In a perfect world, I’d be able to save half of my take-home pay. However, we don’t live in a perfect world and I have other financial priorities. I’m willing to spend a little bit of my money now to enjoy my life between today and retirement.
One of those other priorities of mine is travel…hence some of the magnificent pictures that you’ll find at the top of my blog posts. All of scenic pictures on this website are from my own little camera! (Check out the Sagrada Familia above – it’s in Barcelona. You should go see it!) The world is a big place, but I’m already in my 40s so I won’t see all of it before I die. My goal is to visit and see as many of places that interest me before I shuffle off this mortal coil, Shakespeare-style.
This year, my house is nudging its way up my priority list. I love my home, but it’s a never-ending source of expenditure, even though it no longer has a mortgage on it. In addition to property taxes, insurance, and utilities, there’s the pesky and recurring issue of maintenance and renovations. Believe me when I tell you that I’m not renovating because of some awe-inspiring episode of Renovate-This-And-That which I happened to see on HGTV.
Nope – my house needs to be renovated so that it doesn’t fall apart. I’ve been setting aside money for a major renovation, so that means a different priority will be pushed down my list until next year when – knock on wood! – I won’t have to do anything major to my house.
See, that’s the thing about priorities. You can have way more than one, but they need to be put in order and that order can change. However, if you know what your priorities are, you’re halfway down the path to allocating your money in a way that facilitates your ability to satisfy all of them.
If wishes were horses, then beggars would ride! This is an old-fashioned phrase that has withstood the test of time because of its unassailable accuracy. It’s just a fancy way of saying that wishing for something isn’t enough to make it come true. It’s also a not-so-subtle way of recognizing that people need money to make their wishes come true.
I firmly believe that everyone has spending priorities. It’s just that some people are conscious about them, while other people aren’t. Have you ever known someone who has talked for years and years and years about doing some particular thing but they never actually get around to doing it, presumably due to a lack of money? And does this person you know always seem to have money for a coffee, a meal away from home, a pack of cigarettes, a whatever-item-you-can-imagine?
It’s funny how they never seem to make any headway on what they say that they really want to do…
You want to know a secret?
It’s this – whatever it is that they say they want to do isn’t what they really want to do. What they really want to do is spend their money Right Now. They make the choice to spend Right Now instead of taking a chunk of money and setting it aside for their alleged priorities.
Their truest priority is the Right Now, whether they know it or not!!! Their truest priority is whatever they want at that moment – the coffee, the meal out, the cigarettes, the whatever. That’s where they are spending their money. That immediate purchase represents what is most important to them right then and there.
What about you? Have you figured out what your priorities are for your life? Are you spending your money in a way that gets your closer to your conscious priorities?
You only have so much time. Wouldn’t it be better to spend your time pursuing your priorities so that you’re doing what you want with your life?