Financial Priorities

One of the biggest learning curves after investing in understanding and working with my finances over the last several years has been trying to figure out what my life and financial priorities are and how I should keep my spending in line with those.

Some examples:

* Dinner out with coworkers when I have leftovers at home and I’ve already eaten out once or twice that week? Not really important to me.

* Going out drinking/clubbing every Friday night? So not important to me. I prefer my Friday nights to be quiet nights at home where I can unwind from the long week and eat leftovers. There, I said it – I look forward to eating leftovers on Friday night.

* Having a super fancy car, such as an Audi or a sports car that accelerates really well? Not important to me, but having a car that is reliable, is cheap on gas, and gets me from point A to point B well with a radio, comfortable seats, and bluetooth audio is important to me.

* Feeling comfortable in the space that I live in is incredibly important to me. Living by myself and in a nice apartment building offers me that comfort, though it is quite expensive.

* Playing whatever sports I so choose and picking up new ones randomly is something that frequently causes me to go over budget. I’m working on that.

* Helping my sibling out occasionally with small things and buying nice presents for my parents is really important to me since they have supported me quite well throughout the years and they still help me out when I don’t really need it on occasion.

* I could not imagine living without internet at home.

* I used to have a prepaid cell phone, but with my busy schedule, having my calendar, to do lists, and (personal) email on my phone eventually became incredibly helpful, so I bit the bullet and got a smartphone last year. I’m still not convinced that it’s worth $80+ per month, but it’s definitely worth at least $50 per month to me.

* I don’t see a point in paying someone to clean my apartment when I can do it with minimal effort since my apartment isn’t too big and one small person doesn’t create too much of a mess.

* I prefer to buy clothing from brands where I know exactly how a particular item will fit. This saves me a lot of time since I can buy some items online by buying the same brand and size, such as shoes, socks, bras, sportswear, etc. I finally found a particular brand of jeans at Nordstrom that always fits me and they do alterations in-house which makes jeans shopping so much less stressful. I pay for some of these conveniences, but it is worth it to me.

* I love traveling, even though I have barely enough vacation days to take any long, interesting trips. This is important though and can add up quite quickly.

* I eat out for lunch almost every day. I find that eating leftovers for dinner is more time and cost efficient than for lunch since I pay an average of $7/meal for lunch out, but dinner would run closer to $20/meal out and I just don’t eat enough of the portions for that to be worth it.

* My health and mental sanity is incredibly important to me. I will spend whatever it takes to work on that.

* I like having a small laptop computer that can actually be used for something beyond just going on the internet. (No, I don’t play video games.) But that adds up – the one I bought in 2011 cost about $1,500 and my previous one cost about $1,700 four years prior to that. This laptop was worth every penny of that to me.

* Investing for retirement with the power of compound interest is important to me. My goal right now is to invest 20% of my gross income for retirement by maxing out my 401(k) and my Roth IRA if I’m eligible.

So what does this financial picture look like if we try to categorize it and put it in a priority order, with my average monthly spending in 2011?

  1. Housing ($1,700) + down payment savings ($2,500)
  2. Retirement investing ($1,800)
  3. Health and Fitness ($200)
  4. A car that reliably gets me from point A to point B ($250) + car replacement savings ($250)
  5. Travel ($170)
  6. Electronics ($160)

In 2012, my travel spending is going to go up, but my electronics spending will go down. Since my housing expenses have gone up, I’m saving less money each month towards a down payment, so I doubt I will average $2,500 per month in down payment savings this year, but slightly over $1,200 per month would help me hit my new down payment savings goal.

Readers, what are your financial priorities?

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20 thoughts on “Financial Priorities

  1. That sounds all very sensible. :)

    My financial priorities mainly involve being able to eat yummy food and not having to worry about money. I like being able to use money to solve problems. (Recent example: DC in tears because hir textbook is lost and the teacher says they’re very expensive… not a problem. That’s why mommy makes the big bucks.)

    • I like how you told DC that you could buy another textbook because *mommy* makes the big bucks, not because daddy does :)

      I also really enjoy not really needing to worry about money. (I know that I _think_ about it a lot, but I hardly ever worry about it. Even when the condo deal didn’t happen and I had to move. That was beyond awesome.)

      • Technically daddy only makes the upper-medium-sized bucks… and if he becomes unemployed we’ll still be able to handle the occasional lost textbook repurchase fee without having to cut out too much.

        • When your DC is older, would you take the lost textbook repurchase fees out of “allowance” or something similar?

        • In this case he wasn’t actually the one who lost it. And it turned up someplace he couldn’t have put it the next day. But yes, that’s part of what allowances are for– DH uses his when he does something silly money-wise!

  2. For my finace and I, our number one priority is saving money for tuition so that we can take out the lease amount of loans as possible.

  3. I think it’s so good to sit down every once in awhile and decide what your financial (and life) priorities are. It puts things into perspective.

  4. I think that’s a great way to look at things as everyone’s priorities are different, and you can’t have everything you want all the time! It is definitely good practice to compare your priorities to your spending plan to make sure they coincide.

    I have also found that my priorities have changed as I’ve grown older; I used to really like sporty cars that were fun to drive, but now I prefer something more reliable that gets you from point A to point B. And not too many fancy gadgets as they are expensive to replace! :)

    • Well, I do have pretty close to everything I want ;) though I would really enjoy a larger apartment.

      My priorities have changed as I’ve gotten older as well – I’m spending way more than I used to, e.g. the brand-new car. I try to not buy too many fancy gadgets either (re: no iPad!), though I have been quite enjoying the smartphone :)

    • Stability and independence are definitely priorities for me too. I forgot to mention them. I guess I’ve gotten used to them just being facts, wow!

      That’s why I keep so much in cash reserves (~$24k including deductibles). It makes me able to weather storms quite easily with minimal stress (beyond the stress of storms…).

  5. Re: Friday nights and your car I could not agree more.

    Out of curiousity (and laziness since you’ve prob talked about it before) what car do you drive? I drive an 03 Chevy Malibu lol. Not winning any beauty contests but I love the V6 and reliability. Also I’ve fit sheets of drywall in it with a bungee cord and the seats down.

    I’m convinced that ppl want to go out drinking every Fri night don’t work hard enough during the week. I had the energy to drink every week during uni. Now that I’ve got a 9-5 and 1-hour commute x 2, I’m very tired even after a short week like this one.

    • Well, sometimes I’ll go out for dinner and a drink with coworkers, but clubs just aren’t my thing.

      I bought a brand-new car in the fall of 2010. It’s a hatchback and gets pretty awesome gas mileage, but I don’t drive a ton. (I fuel up on average about once a month.) It doesn’t really win beauty contests, though it’s not exactly ugly either.

      Hour commute? That sucks! I live walking distance from work. I never had the energy to drink every week during uni – though I would argue that I worked harder in college than I do now. (8-8 M-S, with Sundays off from schoolwork)

      • lol cmon I just admitted I drive a car that an automotive writer said was in a ‘fender bender with the ugly stick’ Don’t be shy, what make and model?

  6. I’m with nicoleandmaggie, I want to organize my life as to minimize money worries. Beyond that, I also care more about my house than my car. We make retirement savings and college savings a huge priority but that falls in the bucket of minimizing money worries in my book.

    • My mom thought I was crazy to have ~$20k in cash reserves and that only $10k was necessary at a very maximum, but $20k really helps me sleep at night.

      I definitely care more about my “house” than my car too. So long as I don’t have to worry about the car breaking anytime soon, I’m happy.

  7. I’d say it’s important to me to have money in retirement accounts, cash in the bank, time to eat out, and money to travel. It’d be nice to have nice cars and apartments, but they are not on the top of my list.

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