3 important things to think about before spending money

If you are like me, we have money goals. We have priorities, lists, goals, and action plan. I am super nit picky about my finances, for a lot of reasons mentioned in my previous blog post (where I share my money story). Everytime I spend money, it needs to be one of three things –

1. It has to take me a step closer to my goal,
2. It saves me time, the value of which is my current hourly salary. so I use that ‘saved’ time to increase my income.
3. It is budgeted for.

If you get a hang of this, it will absolutely mind-blowing and life-changing. For example, if it is a paid service like a hiring lawn maintenance, it can go into category 2. It will save you time, but it needs to be cheaper than your current hourly wage. Or it could let you closer to your goal of spending more time with your family. Another example would be if you want to watch a movie, it will fall into Category 3. It needs to be budgeted for.

I have talked about goal setting, and budgeting at length in me previous blog posts if you would like to know more about them. You can also use my free pdf template to manage your monthly finances.

Here are some common money draining habits, that I highly recommend to review on a regular basis.

1. Unused subscriptions – including paid apps, TV subscriptions, even gym membership if you don’t use it.
2. Buying the latest fad in electronics, or fashion- stop buying things to impress others.
3. Bottled water – Please stop buying bottled water. If your water is unsafe to drink, get a water filter.
4. Unnecessary ubers – take public transport when you can.
5. Lottery tickets, smoking and alcohol.
6. Paying for a big house – consider downsizing, or getting a roommate.

Are there any other ones I missed out on? Let me know what you think.