One of the greatest (this is purely my opinion) financial authors, Ramit Sethi, said that saving first and then spending on what you love is better than trying to save at every aspect of your financial life. I agree.
Personally I feel very blessed when I focus on spending on the things that I consider as my luxury.
To do this first, you must learn to analyze yourself.
1. Do I love eating? How do I feel about spending P1,500.00 for food good for four?
2. Do I enjoy entertainment? Will I feel guilty spending P5,000.00 for a single concert?
3. Am I indulging in cable TV? It is okay for me to pay P1,000.00 for a month of cable subscription?
4. Am I addicted with gadgets? Do I love spending P15,000.00 for a single item?
5. Do I love bars? It it fine if I spend P3,000.00 for a single night out?
6. Do I adore clothes? Am I okay with spending P2,000.00 for a single piece of clothing?
You can judge for yourself. Among these 6, you can choose up to 2 items and then base your spending plan on them.
I LOVE eating. I will shell out cash without guilt when I’m spending time with my family and loved ones. Dining out at least once a week is practically a law for me.
I like to think I’m spending money for the experience and not for useless “Stuff”. Every week I set aside a budget for eating out.
|Bodato Burgers to start the day!|
The second thing that I love is music – but not just any music. I am fiercely loyal to one Japanese group named Lead. I have been their fan for 6 years and I just obsess about them. This sounds weird for someone like me who advocates financial control but really, your financial life should be all about balance, right?
Whenever Lead releases an album, a single or a concert montage, I check out my budget allotted specifically for them. If it’s within my budget, I smile and purchase it – no guilt feelings! If it isn’t within my budget, then I look up to the sky and beg because I can’t afford it. (Like right now, Lead is releasing a single with 5 versions! I’m sorry but I think I’ll only be able to afford one, Akira. What were you thinking, Hiroki? Please give me money, Keita. Oh, hi Shinya!)
Instead I go shopping using the money I allotted for Lead for that month. I like dresses and corporate blazers!
How do I manage to set aside money for the things I care about?
First, I set aside funds for my Emergency Fund and Support Fund. I also fund my Retirement Account. I also have a Tithe Fund for the organizations I have faith in.
Second, I mercilessly cut out the things I need but don’t really want.
I pay for cable so I get the lowest plan available. (The lowest plan my family wants. I want the P280 one but they want the P780 so we compromised with the P499!) I also pay the electric bill so needless to say, every appliance in our house is unplugged – except for the refrigerator. 😉
As for grocery shopping, I only buy the essentials: bread, tea, fruits, vegetables and sandwich spread.
Third, I enjoy!
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