What Does Your Spending Say About You?

I recently saw a movie that really changed my perspective on spending. Coupled with some paradigm shifts I've had over the course of my life, I thought I would share some of my thoughts on how our spending habits reflect who we are. This isn't so much financial advice as it is things to ponder which will potentially impact your spending (hopefully for the better!)

Where Does Your Money Go?

Usually, our spending can be divided into needs and wants.  We need shelter, food, and things to sustain life, and we want lots of other stuff. There is often a lot of gray area between the two. We want things so bad that it is almost a need, or the consequences of not getting it are disastrous. For instance, date night could be considered a want, but I consider a happy relationship a need, so going on a date meets my needs (but I don't have to go on an extravagant, expensive date.)

What Is Non-Negotiable?

When I look at my finances, there are some expenses, often set amounts, that I know I will be paying regularly. If I want to continue my current standard of living, I need to make sure that these essentials are paid.

Put God First

I consider tithes and offerings to be non-negotiable. God has blessed me with all I have. I want Him on my side, and ignoring his commandment would be disastrous.

8 Will a man rob God? Yet ye have robbed me. But ye say, Wherein have we robbed thee? In tithes and offerings.

9 Ye are cursed with a curse: for ye have robbed me, even this whole nation.

10 Bring ye all the tithes into the storehouse, that there may be meat in mine house, and prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it.

Malachi 3:8-10

I would rather be on the "pour you out a blessing, that there shall not be room enough to receive it" end of the deal than the "cursed with a curse" end. Whether the blessings or cursings come in this life or the next doesn't make a particle of difference.

Essential Bills

I want to have a place to live, I need some form of communication. Heat, water and electricity are all improntant to me. Therefore, I will make sure that my bills are paid on time so I can maintain my current standard of living instead of being kicked out on the street. I also need to have any necessary insurance covered.

Food

The amount can vary from month to month and season to season, but I need to eat in order to live, so I intend to buy food regularly. If I am wise, I will have enough extra in store that I can take some time off from buying food when resources get tight, but I still know this is something I need to obtain whether from my backyard, my pantry or the store.

Extras

There are also a lot of things that I don't necessarily need but it sure makes life easier or more fun!

Labor Saving Devices

Our vacuum is awesome. It puts other vacuums to shame. It is effective, efficient and easy to use. But it wasn't cheap. But we see it is a long term investment. I would rather have a nice vacuum now that will last a long time than buy 10 cheap ones over the next few years and end up spending more in the long run. When we bought it, the salesman told us that he expected to see us in about 15 years or so to get a new one, not because our vacuum had ceased to work, but because we would be tired of the color.

Our Vitamix and other things were bought on the same principle. If I am eventually going to be buying the nice version that will last forever, I might as well enjoy it now rather than spend money on junk I will eventually throw away.

I understand that this way of buying isn't in everyone's budget, but we were able to do this without going into debt, so it has been well worth it to spend a little extra here and there on important items.

Regular Bills 

There are plenty of things that we may need to pay regularly that aren't necessary. Excess phone lines, cable or sattelite, gym memberships, internet, and other things tend to have a monthly fee attached but may not be necessary for survival. I can work out at my house or outside if I am really motivated, I can go to the library or an internet cafe if I need to. These things are all nice, but could be cut if the budget is tight.

Fun Money (Splurges)

 

 This is the category for things that are clearly in the want category. I don't need to go to Disneyland, eat out at a fancy restaurant or have lots of the latest fancy toys and clothes. But it is still good to have a little money reserved for this category. It helps the quality of life immensely and gives us something to loo forward to!

Investments vs. Short Term Gain

Now I finally get to the point I want to make. Where do our priorities lie? Where do our regular activities and spending fall into the above categories and what are details of each? If I am spending a lot on my big house it implies that my house is one of my most important assets. If most of my money is spent on car payments, it implies that having a nice car is important to me. The same could be applied to any expense.

Usually we aren't faced with an "either/or" type dillema in an obvious fashion. But what if we were? I recently read this post which mentions how the writer chose avocados over toothpaste. I remember trying to sell a choir CD to a friend that was in college while I was still in High School. Her response, "Do you know how many gallons of milk I could buy for $20?"

So where do we really want to be investing our money? If you look at buycott.com you can find all sorts of causes that you can support (or not support) depending on the products you buy. Besides the idea of where the money is going, I like to consider where the product is going. I can spend money on a family vacation that will create lasting memories. Worth it? yes.

What about our food? I spend money getting my car taken care of and want the best vacuum for my carpets, shouldn't I be willing to spend to keep my body healthy? This is often a bit more intimidating because my body needs taken care of daily, not just every few months or years. So the cost difference could be substantial. But isn't that all the more reason to invest in it?

My cousins just bought a juicer, and not a cheap one either. They have only been using it for a few weeks but are already noticing the difference. Is it cheap to eat/drink that many fresh fruits and veggies? No. But if it means being able to stop taking medications, reducing the risk of disease and cancer and overall better quality of life it is worth the price.

So how much of your spending is investing in the future. I recognize that a home can be a great financial investment, but what other things can we invest in? How can my spending help my invest money (and time!) in the relationships that matter most? What am I doing to improve my quality of life? What are things that I am willing to give up or change in order to be able to enjoy those things that are really important to me? What can I do to make my spending habits reflect my values and priorities?

I'm still in the process of learning how to apply these principles, but the ideas ring true even if the application hasn't been fully implemented yet. Feel free to ask me if you want to know specific ideas I have for my life. What are things that you are doing to help you spend time and money where it really counts?