Good morning Dinks. Let’s talk about my favourite subject…spending money. As you know I am a reformed spend-a-holic so discussing how we choose to spend our money is near and dear to my heart. Now that I am more financially responsible I still like to know how other people are spending their money. I know that I got into debt by spending carelessly on things that don’t matter such as clothes, restaurants and vacations. Now that I manage my money wisely I spend money on groceries, household items and things for our apartment.
One of the major habits that I changed after I decided to live financially responsible was the way I paid my bills. I used to pay my bills in full as soon as I got them – which I couldn’t afford to do. So then I ended up using debt to live until my next paycheck because I spent all my money on paying bills. This was a really bad financial habit – only I didn’t know it at the time.
Afford to manage your money
Now I don’t pay all my bills with one pay check. Now I split all my bills down the middle and pay half of the total amount each time I get paid. It’s much more manageable and it fits nicely into my budget.
My budget also changed greatly over the years. I used to think my budget was the amount of my paycheck and I spent it until the money was all gone, this was usually within a week. Then I would live on credit for the next week until I was paid again. I don’t have to tell you that this was a really bad financial habit.
Set good financial habits
Now I set aside a set amount (percentage) of my paycheck for food and housing costs, I include an amount for savings into my budget and then I spend the rest on personal items and entertainment. I also like to keep a floater amount (a minimum) in both my savings and checking accounts in case of an emergency. I know that I could save even more money for my short and long term goals, but I choose not to. I save what I think is a good enough amount and I enjoy the rest of my money.
So many reformed spend-a-holics go to the extreme once they see the light. They go from always over spending to never ever spending a penny more than they need to. I could have gone this route, but I am grateful that I didn’t. I did not take that extreme measure because I still like to enjoy spending my hard earned money on nice things. The difference is that I now spend my money on things that are worth the cost like nice vacations and quality furniture for my home etc. I don’t splurge very often and I always second-guess my purchases before I make them. I don’t want to work hard and not be able to enjoy the fruits of my labour – so I spend moderately while saving at the same time. I guess I found the perfect balance between spending and saving.
Photo by orphanjones
Kristina Tahnyak
Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.
In a key way, your budget has something in common with mine. As much as am working towards a couple of crucial financial goals such as building up my emergency fund and savings, I also like enjoying the money with loved ones and I’ve taken to including such enjoyment into the budget. Before I just used to splurge, now I do it with a plan. I figure, whats the use of money if I can’t have fun on it once in a while, I mean who knows what we’ll wake up to tomorrow.
To differences: While you split your bills in half, I have lagged mine such that the due dates come at different times when I can then manage to clear them in full one at a time. It does take a bit of negotiating to score some of the agreements but its totally worth the effort.
We keep current with our bills (since otherwise all the extra-payments would be pretty nasty) and also make an effort to save each month. In the past years we proved to be better with saving/not spending and I hope we can remain at least as responsible as we are now.
Looks like spending one’s paycheck within the first week or so from receiving it and living on credit for the remaining days until it’s payday again has become a common thing. I can completely relate to this scenario so now I am working on changing that before it’s all too late and I am unable to save enough for the so-called rainy days. Not that I am expecting it to come anytime soon as I am still in my prime but I guess nothing could be better than being prepared. What did you call it again? Finding the perfect balance?
Before we retired, we got paid 2x a month. One check went toward mortgage and a few smaller bills and the second check went toward utilities, insurance, food, etc. We had a little credit card debt and I was so anxious to pay it off that I put huge amounts toward it each month. But then I would always end up short of cash and have to charge an unexpected expense. When we retired (with no credit card debt) we started getting our pension once a month and I was very afraid as to how I would handle that change. It actually worked out better because we have all the money available at the beginning of the month.
From reading your comments I see that everyone’s budget is different and that’s a good thing. Our budget doesn’t necessarily have to do only with how much money we make and what expenses we have, it also has a lot to do with what we are saving for and our personal goals. Thanks for sharing everyone.