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Fall Financial Fitness – What You Spend

Last week, we kicked off our series on financial fitness by exploring the first of three areas that comprise your financial health – what you earn. We talked about the different approaches to earning an income, and what to do when your financial goals don’t align with how much you’re bringing in.

Today, I want to explore the second aspect of financial well-being: What you spend. Now you’re probably thinking, “Here we go, a financial planner talking about spending. I’m not going to use envelopes or jars and haven’t balanced my checkbook, well, ever.” Hey, I get it folks, trust me. I’m not judging.

The reality is, at Family Financial Partners, we believe that people only save money to eventually spend it. My challenge to you is, take a few minutes to imagine a world where money is no object, and list your top 5 goals. You can be as frivolous as you want – fancy cars, lavish vacations, big homes, expensive shoes, rare bourbon, a horse farm – whatever you’d want to spend money on if you had an endless supply.

Next, list the top 5 things you think you spend the most money on. Now, go open your debit card statement and actually print out a copy. Compare that statement with your lists of where you think you’re spending, and where you want to spend. Is your money going where you want it to go/where you think it’s going?

The second factor that creates financial stress after not earning enough is not having your finger on the pulse of where your money is going. Again, we’re just trying to help you identify what you’re spending money on – this is a no-judgment zone. When you don’t have enough money for your goals, it creates financial stress.

People who don’t know where their money is going generally aren’t in tune with their goals, and experience even more stress. The good news is, you don’t have to be under all this stress! This one is easier to change than your income.

Don’t worry – I’m not going to tell you not to spend any more money. I’m going to tell you to make sure you’re spending where you want to be spending. Of course tires will wear out, your kids will get sick, and there’s that emergency called Christmas that happens every year and is impossible to budget for. But outside of the emergencies that will arise, simply align your spending with those goals you wrote down. Ask yourself – is where I spend where I want to spend? If the answer is no, ask yourself, why? Then develop a plan to move forward. You’ll be happier financially, physically, and psychologically in less than 90 days. 

Article by David Smyth, Senior Partner at Family Financial Partners — a financial services firm in Lexington, Kentucky.

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