As a financial counselor people ask me all the time how much they should spend on different expenses. And while there are “averages” and IRS standards, the fact of the matter is there is no right answer because it depends on so many factors. The biggest factors are emotions and values when it comes to money. People often spend money because of needs, wants, or just plain habit…and most of the time it is to either meet an emotion or because the expense is valuable to them in some way.
How do you know if you’re spending to satisfy or meet a value or an emotion? That’s the hard part; you really need to break down the expense and determine why it’s important to you. If you need or want to cut your spending, then you should ask yourself these two questions:
Is this meeting a NEED?
For example, the gym membership. Say it costs $65/mo. Going to the gym is getting you healthy so a physical need is met.
Are there other ways to meet this need in a more affordable way?
Instead of going to a gym, are there things you can do at home to work out? If you go to the gym because the people around there motivate you, a cheaper alternative is to get a group of friends together and do workouts at each other’s houses or outside (when there is decent weather). This could potentially be FREE and more rewarding as you’d have a buddy system.
If you are struggling to balance your budget and finding it hard to stop spending in a certain category or you aren’t even willing to think about cutting something out that isn’t necessary, such as coffee shop coffee or cable, it’s likely because you are struggling with the EMOTION tied to the expense.
Try to take the emotion out completely and ask yourself what you would rather be spending your money on…or how you really should be spending your money.
What is a goal that is being put to the side because of overspending emotionally? Whatever it is, make it a visual goal and then put that reminder where you will see it every time you are about to spend money. That way, you can be your reality check: is spending that money helping you reach or making it more difficult to achieve your goal?
As the great Linda Richman (a character on Saturday Night Live) says when she gets emotional: “talk amongst yourselves…I’ll give you a topic: chickpeas; they are neither chicks nor peas. DISCUSS.” That’s a fun way to remember to pause and think before spending money on something if it’s not needed. And don’t let your emotions run your budget; get in control of spending in order to achieve your financial goals.
If you are struggling to keep up with your expenses and credit card debts, give LSS Financial Counseling a call at 888.577.2227 for a free financial counseling session or GET STARTED ONLINE. Our counselors will empower you to take control of your finances, conquer your debt, and reach your financial goals.
Author April Sanderson is a Certified Financial Counselor with LSS and she specializes in budget and debt counseling…plus she’s an avid SNL watcher (in case you couldn’t tell). By the way, verklempt is Yiddish for getting choked up with emotion.