There are basic necessities that we all have to spend money on, such as housing, transportation, food, and clothing. Then there is discretionary or optional spending.
This is the category of spending that, when unchecked, often leads to people going over budget or into debt. If we’re not tracking our spending, we may find ourselves spending more than we intended on items or experiences that aren’t even important to us.
How does your spending reflect what you value most?
Some believe a quality education is the key to a bright future and will pay thousands of dollars to obtain one. Others may view the world as their classroom and choose to spend their money traveling and gaining new experiences. Neither is wrong. People in both groups are spending their money on what matters to them the most. How does your discretionary spending, and even your savings goals, reflect the things that are truly important to you? What are your values, and do your financial habits reflect them?
View your most recent bank statement, and ask yourself if most of the things you spent money on are even important to you. Did those expenses fulfill a need or make you better in some way? Did they bring you joy, and would you be willing to spend money on that again if you had a choice? If the answer to most of these questions is yes, then your spending more than likely reflects your values. If the answer is no and you regret most of your expenses, then you may need to think harder about your future purchases.
When spending money (especially on non-necessities), make sure it’s on something that you actually like and not just what’s popular. We tend to want the next best thing or whatever we think everyone else has, whether it be the latest smartphone or a new pair of winter boots. You can easily get into debt when your spending reflects others’ values and not your own. Instead of investing in things, consider using your discretionary funds to invest in yourself. Learn a new skill or participate in an activity that makes you feel more valuable.
Routinely checking your spending habits is a smart and easy way to evaluate where your hard-earned money is going, and whether those habits line up with your values. A great way to stay on top of things is to log in to your online* or mobile banking** account and evaluate where your money ends up. Are you practicing good spending habits, or bad ones? Make it a routine to check where your money is going each week and see how much money you can save by making small adjustments.
*Online Banking requires enrollment.
**Mobile features require enrollment in Mobile and Online Banking. Availability may be affected by your mobile carrier’s area. Carrier data charges may apply.