How to Start Prioritizing Your Spending
If you (or most people, honestly) were to hear the words "let's talk about your spending," there's a good chance you might start panicking on the inside.
Money is a bit of a taboo subject in our society, and yet it's also the thing that our world seems to revolve around. We throw out phrases like "money can't buy you happiness," and then are bombarded with advertisements that tell us the exact opposite. With all that said, though, spending money isn't something you should fear—after all, groceries and basic necessities cost money as well as luxuries that do actually bring you happiness. You shouldn't blow your money on things you don't need, either, which is where prioritizing your spending comes in.
Prioritizing your spending and figuring out what's worth the cost for you is key to helping you develop a healthy relationship with money and spending. Here's how you can get started!
Take a Look at Your Monthly Expenses
If you're young enough to still be living under your parents' roof, then there's a good chance that rent isn't something you need to worry about. You might, however, have to worry about paying for your own gas and possibly your food, which is where you can start drawing the line for yourself between necessities and luxuries.
Necessities are the things you don't really get much of a choice on spending on, such as gas, rent, groceries and other miscellaneous bills (things you might not be worried about just yet, but keeping them in mind can still set you up for spending success in the future). Luxuries are the things that you don't technically "need," but definitely want. Think items like clothing from a specific brand you love, eating out and getting your nails done. You'll want to take a deep look into what you spend your money on each month, and break it down into these two categories (this will also help you make sure you aren't accidentally going over budget, either).
Also read about: The 5 Best Places to Get Your Athleisure on a Budget
Determine What Has the Most Value for You
If you suddenly woke up rich and money was no issue for you, what would you change about the way you live your day-to-day life? Would you eat out more often, or eat at better restaurants? Would you buy more clothes, or simply shop at better (more expensive) stores? This isn't a question we often think about, but it can help you figure out what has the most value for you when it comes to spending. We often place a lot of guilt and shame on materialistic things, but sometimes these can be worth the money if it really means something to you. The same goes for experiences, such as travel.
To prioritize your spending (after figuring out what you spend on basic necessities, which still need to come first), think of a few "luxuries" that you deem most important or that make you the happiest after you spend money on them. This will help you cut out other luxuries that aren't really worth your cash, all while filling your life with more of what makes you happy.
Also read about: 5 Budget-Friendly Gift Ideas That Will Still Impress Your Friends
Get Better About the Way You Think About Money
While it's difficult to determine why (things like upbringing, culture and living through hard times can be big, though), some people really struggle with the way they think about and prioritize their spending. They believe they always need to save, even if they fell into a ton of money, all without knowing what they're truly saving for. Yes, saving is important—especially if you plan on attending college or traveling abroad. However, sometimes people are so used to needing to save that they don't know when it's time to start spending instead of saving.
What we're not saying here is to blow through any savings that you have, but we are saying that you should get comfortable with your spending habits once you go through the actions we discussed above first. Plan, prioritize and protect yourself while also enjoying spending on things (that you can afford) that make you happy. If you can crack that code, you might just be ahead of most people these days.
Ready to get started? If you aren't starting with much, you don't need to worry. You can still have fun on a tight budget when traveling. Click HERE to find out how.