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.
* 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?
- Housing ($1,700) + down payment savings ($2,500)
- Retirement investing ($1,800)
- Health and Fitness ($200)
- A car that reliably gets me from point A to point B ($250) + car replacement savings ($250)
- Travel ($170)
- 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?