We’re going to be talking about spending your money based on your priorities, which I find to be so important. And a lot of people don’t do this. They kind of just float through life and spend money here and there.
They’re not really saving, not working toward anything, don’t really have any goals, and they’re kind of just following what other people have done, which is not good. You want to be working toward things that you want to be working toward and having fulfillment and joy in your life and not regret and stress, especially around money. There is so much that revolves around money in this world. So if we can really get a handle on our finances, we are going to improve our lives so much. Okay, so let’s talk about spending based on priorities.
And since you are young, your priorities will probably change over time. But for right now, I want you to think about things that are really important to you currently. That could be getting an education, doing your schooling. It could be starting up your own business if you would like. It could be becoming set for retirement.
There’s a number of different things, or maybe it’s travel, maybe that’s really important to you. There’s a number of different things that it could be. So really think about what’s really important to you and don’t base this on the short term or the instant gratification. Don’t think, oh, I’d really love some fast car or a Tesla. Think about long term.
Like, where do you see yourself in five years? Where do you see yourself in ten years? And really think, okay, well, what can help me get there? What can I be doing right now to achieve where I want to be in five years, in ten years? And really make a plan for that.
Start setting some goals for yourself. Have something that you’re working toward. Have these priorities. And this is going to make your life so much simpler and so much happier, because you’re going to be focusing on these priorities, things that are really important to you, and that could be family or travel, as I mentioned before. But once you’re focusing on these priorities and putting your money toward those priorities, you’re going to have a lot less regret and a lot less worry and a lot less stress.
So let’s just break this down for a little bit, and let’s say we want to buy a house within three years. So let’s take a look and see. Okay, well, how much do houses cost in the area that I want to purchase a house in? I get that you’re young and you may be moving, but just pick something that you want to work toward. This is just an example, but take a look and see.
Okay, if I do want to buy a house within three years, then how much am I going to need to save up for a down payment? And what else do I need to be working on to be smart about buying a house? Maybe talking to some real estate agents and just figuring out the process on how this all works and figuring out how much you’re going to need for a down payment. Do a little research, do a little homework, and once you figure that out, maybe you need 20,000 for a down payment. So you need to think, okay, how much do I need to have saved within one year if I need that $20,000 in three years?
But work backward, and once you set these goals, I know that for me, this has made a really big impact on my life. When I set my goal to buy my third property, I was so focused on getting that down payment and looking at properties in different areas where I wanted to live, but I wasn’t 100% sure. I was driving through the neighborhoods and looking at different places and going there at night, seeing, OK, is this going to be safe at night? Would I really want to live here? And I really put that at the top of my mind, and it was the focus for me.
And once I did that, I stopped spending money on things that were not really that important to me. I stopped spending so much on clothes. I used to go shopping all the time. It would just be fun for me and my girlfriends to go shopping, and we would encourage each other to buy things. Oh, it looks so cute on, you should definitely get it.
You need that. And that wasn’t really important to me. I would buy all these clothes, and then I had a closet full of clothes and I would think, oh, I don’t have anything to wear. I don’t know if you guys have experienced that, but that didn’t make me happy. I wasn’t happy having all these clothes.
It was nice for the first day or something, I would wear it once, wear it a few times, and then forget about it. I would go buy something new. And I have donated so much clothing to Goodwill, it’s ridiculous. So when you really have a goal that you’re working toward, it really helps you to put your spending toward that goal. And you start to think, okay, what am I spending money on?
That’s not really bringing me joy, it’s not really making me happy, and it’s not really going to affect me over the long term. Think about purchases that you’ve made, that you’ve regretted making, and you think, oh, why did I even buy that? Or you bought it and you were excited about it, and now you don’t even really use it. Once you start thinking about these things and you think about a goal that you want to achieve, a certain money goal, it really makes a big difference. And you can really cut back on expenses that are not that important to you, and you can even start to think, okay, maybe I have some subscriptions that I don’t really use and I can get rid of those, and I can start putting that money toward my down payment that I’m saving up for.
The more that you can invest, the earlier, the better off you are going to be. I would not think about buying a brand new car right now. I would think, okay, maybe the car that I have isn’t that great, but it’s going to get me to and from school right now, and it’s totally doable. So I can put that money in something that’s going to make my money work for me instead of buying a new car and instantly losing value as soon as you drive that car off the lot. That is not an investment. That is more of a liability.
That’s something you’re going to have to make payments on and pay insurance on. So I would look for opportunities to invest your money in things that are going to make your money work for you, because the earlier you do that, the better off you’re going to be. And I want to talk about education for a minute because this is a big priority for a lot of people. It was a big priority for me. I wanted to go to college and receive my bachelor’s degree, and I eventually went on and received my master’s degree.
But there’s quite a few different ways to look at education, and some people want to go to the best school, and for certain degrees, that is going to make a big difference. If you went to an Ivy League school, if you are in a certain profession but other professions, it’s not going to make that much of a difference. So if you are planning on having $40,000 worth of debt, of school debt, and you have to pay that off, over time. Is your job really going to help you pay that off or is it not? And could you go to a community college, pay less in school, and pay less for school and transfer to a university later on?
So maybe you do two years at the community college and two years at a university and pay less for school. And what classes could you even clip out of? I clapped out of English. I didn’t pass the AP test, English test in high school, but I clipped out of it. So I paid I don’t know what it was, maybe like $50 or something to take this test, and then I’d have to take my English classes, which was phenomenal because that knocked off classes I didn’t have to take.
So it was less expensive, and it just meant that I could graduate early, that I didn’t have to stay in school and continue to pay for these classes. I could be done as quickly as possible. So you really want to consider all of these factors. Is going to an expensive school really worth it? Honestly, being in the professional field, no one really looked at where I went to school.
It was kind of more like, “oh, you got a degree. Okay, great”. Yeah, you have a business degree. That’s fantastic.
Thanks for visiting.