Sometimes, I find myself to be a little bit bored. Retirement can do that to you, and so a few days ago I got out some paper and started to jot down some numbers. I tried to figure out how much money I have earned and spent over the last 50 years or so. Where does the money go? It’s kind of amazing and also kind of scary too that I can actually remember all of this crap. What does that say about me, my money, and my life? For one, I may be a freaking money savant…or am I just a mentally ill moron? Um, let’s go with savant, ok?
A Rainy Wednesday and This is What I Choose to Do?
So I sat down and began to put numbers on paper to try to figure it all out. I thought hard about how much money I have earned over the course of my lifetime and wondered how and where I have spent it all, leading me to this fundamental question: Where the fu¢k did all the money go?
Certainly I can trace some of it fairly quickly. Especially the part that I have managed to hang onto and saved, socking it away for emergencies, and of course the money in my retirement accounts. That was a pretty easy recall.
I also know I’ve spent thousands and thousands on housing, cars, and vacations, too. I’m just like you and doing those things with and for my family, well, isn’t that the reason we try so hard to accumulate the money in the first place? Ok, there is always the exception of Mother Theresa and Mahatma Gandhi putting others ahead of themselves.
But having said that, it’s always handy that I can go back over ten years and actually look at my tracked expenses in Quicken and see exactly where it went for that period of time. But seriously, can anyone really say they know what happens to all of their money and they know for sure that it all has been spent wisely?
NO! I’m Betting NO!
The answer for almost all of us is a resounding obvious NO! Yes, we can remember a lot of the spending on the big stuff, at least I hope so, otherwise as Desi said to Lucy back in the day, “You got some splainin’ to do!”
Is It a Want or a Need?
We all spend money on necessities, and as such that leaves money for our wants (if we are a little bit lucky at this!). Our needs are our needs. Prioritizing our spending is the way we cope with the aspect of our lives that lets us obtain what is necessary (like food, clothing, and shelter) while still allowing us to enjoy some things that are really silly, fads, self-gratifying, or just plain fun. Realizing that is a good first step in learning to prioritize your spending and hopefully improving your results. You’re never too old to learn (although at 69 I guess I am sorta’ running out of time), but I’ve come up with a really simple way to look at it all right here.
The Truth Can Set You “Free”
Most everything we spend on is a want, even if it is a need. Let me explain. I need a place to live. Do I need a 5,200 sq. ft. “McMansion” home with a swimming pool? I like sports cars, but do I really need one? The decisions we make every day affect what and how we actually spend on our wants and needs list. Necessities are a must, but the extent and appropriateness are factors we can all improve because most of us actually have to! So the focus on money is a required fact of life and is affected by what we truly value.
Do the Things We Spend Our Money on Serve a Real Purpose?
If I already have something that I can use, will this new, shiny thing wind up being just another thing in my closet collecting dust? I have things in boxes in my closet right now that I have never ever used, books I’ve never read, and clothes I have never worn just because I wanted to fulfill one of my “wants”.
Am I “Keeping Up with the Joneses”?
I confess, I once had a brick mailbox built in front of my house simply because I liked my neighbor’s mailbox and wanted to keep up my profile. I had a perfectly good mailbox, and just did it anyway. That $500 mailbox reminded me every day for ten years how screwed up my priorities were! In a way, I got off more cheaply that some to learn that lesson.
Is It a Fad or a Trend That Will Quickly Become Obsolete?
Do I really need a bigger and bigger TV (I mean 70 inches, you’re kidding), or the latest surround sound on my music system? Is a 10-disc CD player really more likely to be useful than all the lesser disc players around? And besides…can you say “streaming” or “download”?
Technology moves quickly these days, so just about anything you might purchase will be surpassed within a few months. Choose wisely.
With Apologies to The Who…”I want it, I want it, but you CAN have it” Sometimes!
Hey, we’re all human, we want things. And if you’ve done a good job on the necessities (including paying down debts, and building up emergency and retirement savings) and there’s still something left to spend, it’s ok to fulfill yourself with some silly, fun, trendy, self-gratifying purchases once in a while. You have my permission. 😉
We all wonder “where does the money go?” from time to time. If we’re tracking expenses, then the answer is only a few numbers away. We should use our budgets to spend money on what we truly need and value, and ask ourselves appropriate questions before making a purchase. But in the end, a few silly purchases to enjoy can be worth it, too. See, now I feel much better.
Do you have a good idea as to where your money goes? Do you track it diligently and think about how you spend, save, and earn it? Do you allow yourself to splurge once in a while? What’s the last fun purchase you made?