Looking at the web, there are many articles that will point out the budgetary sins of grabbing a latte at the local coffee stand or eating out for lunch rather than brown-bagging it. Now, it is true that people may spend more than they should on drinking or dining out, but there is one important observation that I do not feel is made often enough. IT ALL MATTERS.
What type of clothing do you wear?
Do you rent or own?
How large is your place?
What type of car do you drive?
What type of food do you eat?
How often do you go to events?
How much do you travel?
And most importantly, how much do you spend on each of the aforementioned?
Part of the reason that I ask each one of my clients what is important to them is simply because it all does matter. It very well could be that someone has decided they would rather enjoy their $5 coffee drink each day as their budgetary vice, but save money by being a roommate in an apartment with bills of $500 per month and saving the rest in investments. Another person could be skipping the coffee drink and bagging lunches, but they are having to worry about a $2,000 mortgage (with $1,700-$1,800 of that going to interest) and all of the associated utility bills and maintenance that come with home ownership. Unfortunately, we live in a society that loves to point out the small budgetary sins, while often turning a blind eye to the larger ones where larger savings maybe can take place.
When taking a look at your budget it is vital to ask what is really important to you and what may be just keeping up with the Jones’s. This may mean that you should cut out a few lattes a month. It may mean you should wait longer before buying a new vehicle or perhaps you should not buy as nice of a vehicle. I am not the one to say. I do not know what is important to you. I do know that at the end of the day you are the one who is ultimately responsible for your financial situation and when it comes to spending… it all matters.