I’m an eat-out-aholic. And you know what? I’m not ashamed to say it. The facts that I’m about to disclose may appall you, but I assure you it’s all under control. Between my girlfriend and I, we spend around $1500 on food every month. I was baffled that we spent so much eating out, but it doesn’t take a genius to figure out how. Eating out is expensive, and when you do it multiple times a week, it adds up quickly.
It may surprise you to find that I am a personal finance blogger and that I manage to spend this much money on food, but $1500 is just the result. Every dollar I spend is conscious. Take a look at the big picture. Only then should you cast your stones of judgement.
What’s the Big Picture
Despite my outlandish spending on food, my financial life is in good order. My finances are automated. I take full advantage of my employer’s 401(k) matching. I max out my Roth IRA every year. And overall I have a 27% savings rate on my pre-tax income.
Where do you want to be? How are you going to get there? Answering these questions are key. Once you have the big picture everything else will fall into place. Rather than worrying about individual spending categories, you should focus on the overall well-being of your finances. Create financial goals and create steps to achieve them. By focusing on the big picture, you can rest assured that you will reach your goals. Now that your goals are on track, you know that you have the luxury of spending money on things you love.
Spend on Things You Love
It just so happens that my girlfriend and I love food.
What is your passion? What do you love? You can make the conscious decision to spend a larger portion of your budget on your guilty pleasure. The point is that your spending is conscious. Every dollar that you spend has an opportunity cost. Your money is a finite resource. The goal is to use your finite resource in a way that will maximize your happiness. Spend on the things that you love.
Here in the world of personal finance, we focus so much on saving money that we forget what we’re saving it for. Don’t go through your whole life only to realize you’re filthy rich in money, but poor in experiences.
So There’s No Room for Improvement?
I know that my spending habits aren’t perfect. There’s always room for improvement. It’s only through recognizing our shortcomings that we learn to be better. I’m an eat-out-aholic. What about you? Do you spend freely on your passions?
This was a guest post by Ace, a twenty-something, who writes at Ace of Wealth. Ace is dedicated to helping people make smarter financial decisions. He writes on a wide range of topics from budgeting to behavioral economics. If you liked this article and would like to read more, consider subscribing to his RSS feed.
Photo credit: KayOne73