Five things to spend your money on.

[Odogwu-Blockchain]

5. Luxury. When I mean luxury, I do not actually mean it has to be expensive. But I say luxury because there are things that we do not need but still want to have or experience like traveling or eating at a good restaurant. I believe that even though we should be smart in finances this does not mean we have to completely deprive ourselves of enjoyment.

Is eating at a good restaurant luxurious and does that count to be a form of enjoyment? Do foods cooked at that restaurant can't be prepared in your home too. What I really think it's the best enjoyment is picnic outing with family or close ally, spending time in nature, going to beach with family and all these are not expensive but seems day fulfilling.

[Die_empty]

I completely agree with you because the expense lists are made depending on the income. Whoever has the income spends it to meet the needs of daily life. Saving is the most important thing. Many earn but cannot save. Whatever they earn ends up being spent, and finally, they become empty, and there is nothing to be said about their savings. Those who continue like this have to take loans in times of trouble later. Those who give priority to saving can overcome the danger beautifully with the money they save in times of trouble.

No matter how much you earn, ensure you save some part of it. It is common to hear people say that their income is not enough, which is why they are not saving anything for rainy days. The truth is that you don't need to earn more to be able to save, you can just set aside small amounts every month.  You will be amazed that you have a substantial amount at the end of the year if there are no emergencies.

You also don't need to be comfortable with a low-paying job because it might force you to take loans and become indebted. Seek a higher-paying job, learn a new skill, or improve your qualifications because you might need them to get additional income.

[Wonder Work]

No matter how much you earn, ensure you save some part of it. It is common to hear people say that their income is not enough, which is why they are not saving anything for rainy days. The truth is that you don't need to earn more to be able to save, you can just set aside small amounts every month.  You will be amazed that you have a substantial amount at the end of the year if there are no emergencies.

You also don't need to be comfortable with a low-paying job because it might force you to take loans and become indebted. Seek a higher-paying job, learn a new skill, or improve your qualifications because you might need them to get additional income.

Yes, of course, Am investing in BTC by maintaining DCA from my small income. Investing in BTC seems like saving to me. It makes no sense to save and leave money in the bank, so i'm investing in BTC by maintaining DCA. I consider this investment trend an essential means of saving.

And yes, I do not waste money to feel more comfortable than my income, and I do not have any debt. I'm doing well with what I earn. Thank you for giving me your essential suggestion.

[gunhell16]

We probably won't be able to pay our expenses if we don't have a source of income, right? And this source of income can start with investment and if the investment we make or choose is right, we can certainly easily make savings, and other things mentioned.

So it's important that we have a stable source of funds to source it, because all of the things op mentioned are okay and we can all go through them except
for the luxury that not everyone can do.

[Gozie51]

3. Savings. Some people save up for specific things like buying a better house, a better car, getting your kid into a better school among other things. Some people may just save for the sake of having money to pull for emergencies. I think emergency money and money I want to use into building a new home should be separate.

If you are saving you better convert to stable coin before inflation will reduce its value. But again you can keep it in btc by which you can have more value for it incase price rises or you split into btc and stable coin but definitely not fiat. If you want to build house I don't know how much you want to save that you won't touch it or that inflation will allow you to have same value from when you started saving it. Instead you can reinvest that money you want to save into buying of land and you are likely to have more gain from it if you decide to resell and get money for a building your house. As to changing children school, well that may not require lot of money and time compared to money proposed for building, so you can save or gather that up.

[jaberwock]

Good list by the OP and two good additions. With time most of us are able
to figure out what the important things are in life and what we need to fucus our
efforts on, Food, shelter and the future - the future being savings and investments
for a comfortable and healthy life.

In time we also realise that the "wants" are mostly depreciating assets and in terms
of investments are not great options, fancy cars and fancy watches etc. which dont
actually enhance our life.

The word investment can be classified into two sections. One is the appreciating one like Gold and Bitcoin, while the other are those that you mentioned there (E.g fancy car, fancy watch, etc...). In the name of investment, both types are beneficial for us. One provides wealth in a literal way because we can earn profits on them (usually passive), while the other is for our own well-being.

When we drive a fancy car and wear a fancy watch, we can feel good. It boosts our confidence. They are also useful because it tells us the time and it can transport us in our preferred destinations. It can even attract us a potential client for our businesses.

[iv4n]

2. Emergency fund. In cases of emergency, we should be able to get some money for it. Especially in countries where healthcare is not free, we should be prepared to pay if ever we get into accidents or we get sick though hopefully it never happens but still we have to be always prepared either way.

3. Savings. Some people save up for specific things like buying a better house, a better car, getting your kid into a better school among other things. Some people may just save for the sake of having money to pull for emergencies. I think emergency money and money I want to use into building a new home should be separate.

4. Investment. Aside from our day jobs where we get most of our money to pay for our necessary expenses, we should invest in assets to make our money grow. This could be gold, real estate or cryptocurrencies.

This should be one category... If your savings & emergency fund are in fiat currency, it will lose value over time, and if too much time passes, inflation will eat away at most of that value. That's I don't save in fiat currency, I don't have an emergency fund, but I do have some investments... if things go bad and I need the money, I will find a way to make ends meet until I can cash out some money.

It's the 21st century, saving has lost its meaning... unless you are saving in gold, crypto, bonds, or anything that resists inflation. And if you are already saving in this way, it's essentially an investment.

5. Luxury. When I mean luxury, I do not actually mean it has to be expensive. But I say luxury because there are things that we do not need but still want to have or experience like traveling or eating at a good restaurant. I believe that even though we should be smart in finances this does not mean we have to completely deprive ourselves of enjoyment.

This one is tricky... but YOLO can be applied here, sometimes it's worth (and more) spending money on something nice.

[Nothingtodo]

Those who are young and not yet married have a different way of spending money and they spend most of their income on luxurious living as well as gambling and dance clubs.
But married people mainly earn money and save most of their income for future security and spend it on family needs.
My income is mainly for my studies and I give some money to my family and I keep the rest for emergency needs, but so far I have not been able to increase my bank balance.

[AprilioMP]

All five are good by levels. It's just a bit confusing for people who don't have much income. It's difficult for them to manage these levels because all they think about is how they can eat for one day.
The five types of money allocation apply to the middle and upper income groups. For people with a lower middle class economy, it will be difficult to make that list.

I would make it simpler in allocating money, consumptive as needed. I will eliminate the luxury point.

[Ishicryptic]

Your 5 tips to spend money on are very well articulated because somebody that earns money is supposed to have a budget for their expenses so that when money enters they will not misuse it, when you don't have a plan for money you can easily waste it on things that are not important. Personally I have two categories where I divide my income, one is for unavoidable expenses like food and rent, the other is discretionary fund, it is from there that I allocate money for different needs. Emergency funds, savings, investment and miscellaneous, I have percentage of money that I put into the different portfolios. The day that you stop to plan that means that you have planned for your failure.

[Finestream]

What people mostly know is about needs and wants. So, we have to spend our money with the needs first before going with the wants. And the luxuries that you've mentioned is better if it's said as wants. Because that's indeed what we have to spend sometimes to give ourselves the luxuries of having a job and why we work for it. We provide but we also need to provide for our own happiness. If things such as what we like to have makes us happy, we shouldn't deprive ourselves with it because as long as we are paying the bills, we provide food to the table, we deserve that kind treat to ourselves.

Just like what OP has mentioned, luxuries do not need to be expensive. So it’s never wrong to include luxury in our expenses especially if we also deserve some kind of luxury as a reward of our hard work and efforts that have paid off.

However, we should still prioritize saving over luxury. And most of all, we should fulfill all our needs first prior to acquiring some of our wants. Self-discipline is a must, without it, you will never achieve something from your own money or income.

[Salahmu]

I think that we should allocate our money into 5 categories.

1. Necessary expenses. I am talking electricity bills, food, school fees (if you are studying or have children), housing, healthcare, and transportation. I believe this group is where most of our money goes because we basically can't survive without these things.

5. Luxury. When I mean luxury, I do not actually mean it has to be expensive. But I say luxury because there are things that we do not need but still want to have or experience like traveling or eating at a good restaurant.

From the listed things that is made up of the Necessary expense, I believe that this is the highest place to spend so much and can even make someone who doesn't earn much not to have the chance to save much because it has the kind of need that's inevitable especially when there is children such as the school fees and you will not only pay for that but also the necessary things that comes with it, notebooks and textbooks can also take alot of money, housing and transportation is not even mentioned yet, so actually except all this needs has been satisfied before a provision for luxury can be tested.

[armanda90]

Sorry for little question, its based on ranking what five points have described?

for first point actually no doubt must allocated for Necessary expenses and its happening in daily day, weekly until our spending monthly spending for education cost, electricity bills, internet bill and residential rental bill if you don't have your own house. For Necessary expenses I think must spending bigger than other spend allocated how our Necessary expenses every day, week until month repeat every time.
I have important points based on my opinion about Investment allocated, for my self its really important and have to allocate as much possibility due our money increasing in the future not matter what kinds investment way as stock or cryptocurrency and gold. Looking for investment way have high return and faster increasing our assets such as investing in bitcoin and top altcoin. For emergency fund maybe could allocated around 10% until 20% of my assets because its happening at emergency moment only not every day or every week.

[Japinat]

I would not separate the second and third; all of these can be combined into one category. Moreover, money should not lie idle; it should also work. If you have a certain amount that you consider savings (3), they should also bring you profit. Passive income does not necessarily have to be investments. Buying real estate, and renting it out; after receiving profit, you also make your money work, sending it to investments. As for the fifth point, it will be reasonable if you have already established all the other points. Sometimes it is worth being patient a little in order to live a measured life later.

Savings do not actually mean they should sleep forever in our bank account, sometimes we also save not just to prepare for some unforeseen incidents, but also to prepare ourselves for our future investments. It could be  passive or active, it’s actually our own choice to make.

Now the last category which falls on luxury, I certainly believe it isn’t a requirement to achieve all of your goals first before you take chances to enjoy some life’s luxury. If you can include it in your money budgeting, much better. Because life itself is full of uncertainties, that sometimes we should also take time to reward ourselves before things end up late for us.

[Farhan99]

I will spend my money for Education, Health, Experiences, Investments and Giving back. First of all comes the education, Knowledge is a true power whether it's formal, online or books it helps us grow personally as well as professionally. I will spend money for my education for my children as it opens door to new opportunities and development. Then comes the health which is a Great blessing of God. Our body and mind are our assets so we should spend money on healthy food, our mental health and regular checkups, health is wealth.

I will spend my money in making memories with nature i will travel, attend concerts do workshops and spend quality time with my loved ones who are our real happiness. Then comes the investment which is must to survive in future critical situations. If we invest we make our back stronger by doing business or any other ways. The most important way to spend my money will be Giving back to needy people in the form of charity helping a friend or dupporting a local business. Helping needy people add more resources to our money. This way will help me in the life after death.

[alastantiger]

Is eating at a good restaurant luxurious and does that count to be a form of enjoyment? Do foods cooked at that restaurant can't be prepared in your home too. What I really think it's the best enjoyment is picnic outing with family or close ally, spending time in nature, going to beach with family and all these are not expensive but seems day fulfilling.

Everyone has their preference hence we can't expect everyone to see things in the same way you see things. Eating in the restaurant, a luxurious one can be seen as enjoyment to others despite it not being your thing. I love the way you listed them and I think that's the way we should be spending our money. Getting all the necessary things should be our number one priority, after that then we can keep aside emergency funds then savings.

With this strategy, your investments won't be sold prematurely because you have funds elsewhere to be used for other things while you're investment keep growing. Luxury should be the last thing you're allocating money to and this should only be done when your have enough leftover after sorting out the important bills. Money for investment should always be available too because that's what can change your story from being broke to wealthy.

[Coyster]

What the OP mentioned is what most smart and disciplined people do, it is not really a secret. That said, there are people who invest their money and when they get the ROI, they spend both their principal and their ROI, if you do things that way, there is a high chance you'll never get rich. So if you actually want to grow wealth, you have to use compound interest to your advantage, and the only way to do so is by reinvesting, so that your returns and principal provide further returns for you and so on.

[Mate2237]

I think that we should allocate our money into 5 categories.

1. Necessary expenses. I am talking electricity bills, food, school fees (if you are studying or have children), housing, healthcare, and transportation. I believe this group is where most of our money goes because we basically can't survive without these things.

2. Emergency fund. In cases of emergency, we should be able to get some money for it. Especially in countries where healthcare is not free, we should be prepared to pay if ever we get into accidents or we get sick though hopefully it never happens but still we have to be always prepared either way.

3. Savings. Some people save up for specific things like buying a better house, a better car, getting your kid into a better school among other things. Some people may just save for the sake of having money to pull for emergencies. I think emergency money and money I want to use into building a new home should be separate.

4. Investment. Aside from our day jobs where we get most of our money to pay for our necessary expenses, we should invest in assets to make our money grow. This could be gold, real estate or cryptocurrencies.

5. Luxury. When I mean luxury, I do not actually mean it has to be expensive. But I say luxury because there are things that we do not need but still want to have or experience like traveling or eating at a good restaurant. I believe that even though we should be smart in finances this does not mean we have to completely deprive ourselves of enjoyment.

You're right setting up your salary for these five things will be beneficial as it will help you to set your financial goals and objectives right as this will help you to streamline your money only to things that are important and value to you


Setting out money for the purpose of investment is one thing that is very important because this money is one thing that is ment to be grown and not necessarily for spending and luxury only so people should always endeavour to make that that they prioritize investing

[Stepstowealth]

I think that we should allocate our money into 5 categories.

There has been an extra allocation for most individuals living in country where the economy is bad and any individual who is earning a little is thrown a lot of financial burden by either family members or their friends.
It is now almost like people have to make an allocation for helping people, if not they may have to make sacrifices and tamper with some other plans of theirs.

[rachael9385]

Is there any adult not spend their money in these 5 categories? I'm sure all adults spend like this!

They might not invest in gold, Bitcoin etc, but they invest in banks which generate 1%-7%, they call this low risk investment.

Luxury spending for men are quite different, they invest in their hobby, gambling or prostitution, but still those are belong to luxury.

The difference is the way people budget it, someone might budgeting 1% for luxury, while the other one budget it as high as 20% for luxury because they said "you only live once".

The only time you earn money from saving in the bank is when you are using the fixed deposit System which cannot be withdrawn untill a specified date, it increases based on the number of days that the money was being saved in the account but when it's comes to a savings account nothing is added, as a matter of fact some commercial banks end up taking little funds from your savings for ATM maintenance and all that