I used to watch a show on TLC called Extreme Cheapskates. There was one couple that dried their used paper towels and in response I stopped using paper towels for a year to prove how this really wasn’t a cost saving method and using dish towels would have been better. That isn’t why I brought up that show. Counting money is thought of as something the extreme do. Either people trying to pinch every penny or the ones like Scrooge McDuck who just like to count everything they have.
But it shouldn’t be. There should be no stigma on knowing what your money is doing, where it is going, and why it is there. Every dollar should have a job and your household and family are the factory in which it works. There is money that should be going to food, water, shelter, and other necessities be they of the modern world like internet and mobile phone charges or for survival costs.
After the money for survival and necessities there is money for the bills we have to pay. The money that goes to Uncle Sam (I’d rather it go to Uncle Slam), insurance companies, and as debt services. That is money that has to be spent. There isn’t much of an option, but I’d still put survival first and being able to function in the modern world first.
Then the controversial topic. There are some people that put savings here and then there are others that take it off the top and then there are still more that put it at the very bottom as what is left at the end of the month. That isn’t where it should go, but I also don’t think it needs to be at the top until it is understood. Add up the first two categories and estimate how much money is pre-spent each month and then calculate savings and that is the amount taken off the top.
Finally we get to wants. It is important to leave money to use to enjoy life. Life is meant to be lived. That means if you have the means find your consumer comfort level and live there. For some people this changes over time and others are happy driving a Honda Civic and eating Hamburger Helper (there is nothing wrong with either) and then there are others that want A5 Wagyu every night and to drive multiple sports cars, but you won’t know where you should be until you do the accounting above.
There is a lot more to putting your money to work than these categories, but it is important to do the math. Know what your money is doing and why. Every dollar should have a job and to be a good manager of money it is important that each job has a detailed job description and report card.
David Huzzard Writes 