Five things to spend your money on.

[reagansimms]

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.

I think this point is more accurately called DESIRE (based on the material explained).
Desire is something that is not essential, in other contexts it can also improve the quality of life, such as wanting to have luxury goods, eating at luxury restaurants, entertainment and vacations, these things are choices (not too much of a priority), you can arrange the right time to enjoy the pleasures of life when you get additional income.
I prefer to make wiser financial decisions to achieve better life goals, savings are certainly very much needed and can also be used as emergency funds, but when the funds are not touched after monthly financial planning, I will allocate them into investment.

[kotajikikox]

Is that based on ranking? If so, the ranking looks accurate.

But I read a book that suggests a better approach, after you receive your income, it should be income → savings → expenses, instead of the usual way. It’s a way to discipline yourself and prioritize saving, because that savings will be the one to cover your emergency needs and future investments.

That is an interesting approach but I have tried this and it really is not as effective, I must say because the money for the expenses usually comes in short. Then the money saved I feel like will be taken away. So, I like to pay for all the expenses first before I save the money. That way, I have no more to worry about.

[Samlucky O]

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

1. Necessary expenses.
2. Emergency fund.
3. Savings.
4. Investment.
5. Luxury.

there is surely nothing wrong in your explanation or your arrangement, anyone may still come up with his own table or arrangement since everyone has the right to do what is best for them. but the main point is to spend your income or money wisely because no one will come to bail you out when you fuck up. we should try to prioritize the need before want because if we prioritize want instead of need then we are surely not following the right approach and it will lead to not making a wise investment decision. dont forget to put your money to work because the source of income is what really matter and not how to allocate it. the rich people prioritize putting their money to work. meaning that there money work for them not them working for their money. at least this should be given a major priority.

[knowngunman]

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.

The three basic necessities of life are food, clothing and shelter. You cover two in your list and omit clothing. Perhaps, it was intentionally omitted since it's not something we buy regularly.

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.

I think this is where health care rightfully belong to and not in the first point. Emergency funds are meant to cover health care, unexpected maintenance either in our house or our drives.

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.

Emergency money is quite different from saving. Just like you explained it, saving is to achieve a specific goal like buying a house, car or start a business. Emergency funds sit idle until emergency arise before it can be used. People actually misunderstood saving and emergency funds to be the same.

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 is the purpose of saving. There's no point saving raw cash for future because it will devalue in the long run due to inflation. After a reasonable saving, you push it into investment to generate profits.

[Dunamisx]

As for me, I don't think I needed to take this long before making decisions on what to spend my money on, because if you ask me, I will give the list below as what i will be liable if spending my money on, as our needs atimes may differs from each other base on personal interest and demands.

1. Primary needs, Food, Clothes and Shelter.
2. Investment, something that can be a profitable source of income.
3. Myself, the Family, relatives and any other person in need of help in the society.

[MarjorieZimmermanGinger]

As for me, I don't think I needed to take this long before making decisions on what to spend my money on, because if you ask me, I will give the list below as what i will be liable if spending my money on, as our needs atimes may differs from each other base on personal interest and demands.

1. Primary needs, Food, Clothes and Shelter.
2. Investment, something that can be a profitable source of income.
3. Myself, the Family, relatives and any other person in need of help in the society.

By allocating an appropriate amount, our lives can be much better, the first to third points are definite needs and this must be met for anyone, especially for those of us who are married. But if you want to be better, maybe make a percentage limit, such as for the first point 30%, for the second point 50% and the rest can be placed 20% for the third point. If asked why the amount is more focused on the second point because it does concern our future so it is much better if the allocation is larger.

When people have a well-organized financial management, I am sure their lives can be more focused and easier because sometimes the only thing that is difficult is talking about prestige and that is what ruins all the plans that we have arranged. If expenses are much greater than income, then this is a problem and a solution must be found immediately so that the problem does not increase in the future.

[MArsland]

I think the list is partially accurate, there are people that never gets to the stage (5) of buying luxury things. Spending on the primary needs are definitely important for survival, savings and investing is to pursue more financial growth and wealth and only after one has archived that growth that is when they can afford luxury but when they are not able to have a stable financial status, it will be difficult. I agree with what the first comment said about considering savings first before expenses, because if you agree that you would save 30% every month, once the salary comes, you need to keep the savings apart first before you spend on your needs, that is how I believe it's done.

Unconsciously, we all do these 5 categories but with different portions, adjusted to each income. Although not specifically set it consistently, I am sure we all try to stabilize every expense so as not to be excessive. for example, the luxury that OP conveyed is quite relevant because we need entertainment, brain reflection so that we can be fresh again to start working and I prefer to call it a psychological need.

[l3pox]

I think the list is partially accurate, there are people that never gets to the stage (5) of buying luxury things. Spending on the primary needs are definitely important for survival, savings and investing is to pursue more financial growth and wealth and only after one has archived that growth that is when they can afford luxury but when they are not able to have a stable financial status, it will be difficult. I agree with what the first comment said about considering savings first before expenses, because if you agree that you would save 30% every month, once the salary comes, you need to keep the savings apart first before you spend on your needs, that is how I believe it's done.

Unconsciously, we all do these 5 categories but with different portions, adjusted to each income. Although not specifically set it consistently, I am sure we all try to stabilize every expense so as not to be excessive. for example, the luxury that OP conveyed is quite relevant because we need entertainment, brain reflection so that we can be fresh again to start working and I prefer to call it a psychological need.

the most interesting thing imo is that no matter what you build you'll have to be ready to let it go when the time comes
nobody lives forever (regardless of what the new rich want to build when it comes to longevity)
every satoshi you make will be left behind the moment you die, it's up to you to decide what to do with it while you're alive

[MArsland]

the most interesting thing imo is that no matter what you build you'll have to be ready to let it go when the time comes
nobody lives forever (regardless of what the new rich want to build when it comes to longevity)
every satoshi you make will be left behind the moment you die, it's up to you to decide what to do with it while you're alive

Ahh 1000% I agree with you, because in the end the life we ​​have will be useless if not enjoyed, right? besides that we also need to create happiness for the people closest to us while they are still alive. Because it is useless to produce as much as possible but we forget how to make it a happiness.

[hafiztalha]

OP made interesting topic and Expenses are main part of our life because without expenses we can't spend our life . We have to pay bills , milk cost , meal cost and other things which are required to live life. Clothing is also big requirement of us because we want more attention of people and that is possible by only best clothing and best dressing. Saving is also best strategy because we have to save money if we want to make more money in future and that will help us to to invest that money in best investment.There are people who saved money but they are not doing investment because they don't know how to invest this money.

[TopT3ns]

As for me, I don't think I needed to take this long before making decisions on what to spend my money on, because if you ask me, I will give the list below as what i will be liable if spending my money on, as our needs atimes may differs from each other base on personal interest and demands.

1. Primary needs, Food, Clothes and Shelter.
2. Investment, something that can be a profitable source of income.
3. Myself, the Family, relatives and any other person in need of help in the society.

By allocating an appropriate amount, our lives can be much better, the first to third points are definite needs and this must be met for anyone, especially for those of us who are married. But if you want to be better, maybe make a percentage limit, such as for the first point 30%, for the second point 50% and the rest can be placed 20% for the third point. If asked why the amount is more focused on the second point because it does concern our future so it is much better if the allocation is larger.

When people have a well-organized financial management, I am sure their lives can be more focused and easier because sometimes the only thing that is difficult is talking about prestige and that is what ruins all the plans that we have arranged. If expenses are much greater than income, then this is a problem and a solution must be found immediately so that the problem does not increase in the future.

I like your priority setting as you give each need a percentage. It is not simply a figure and some kind of awareness that we cannot live today only. This is not like we are neglecting the present moment when we provide more portions in the future, but it is just imparting between the spaces in order to make our life have some direction in the long run. I believe we fall in many times not because we lack the money, but because we forget that we ought to restrict ourselves.

Actually, many people can live in peace but they get fatigued owing to their adherence to their momentary fancies. When one is able to speak the truth about what is actually important as you did then money will not be such a problem. We do not have to live extravagantly but we need to have enough to live with a decent scheme. Once we reach such a stage, we can pay more attention to the creation of our habits, not simple satisfaction of desires. I believe you are going in the right direction.

[Zackz5000]

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

I doubt if all adults spends their money on the five categories listed they may send on few but not all, i have seen adults who spends their money on unnecessary things, such as going to club, womanizing buying things on a high rate just to show up.
There are adults who spends their hard earn money going for places to places just to bewitch their neighbors due to hatred I believe such people who falls in these categories will surely learn in a hard way. Most adults are also addicted into gambling and 80% of their income is been budgeted for gambling. Everybody can never do things right.

[mvdheuvel1983]

the most interesting thing imo is that no matter what you build you'll have to be ready to let it go when the time comes
nobody lives forever (regardless of what the new rich want to build when it comes to longevity)
every satoshi you make will be left behind the moment you die, it's up to you to decide what to do with it while you're alive

Ahh 1000% I agree with you, because in the end the life we ​​have will be useless if not enjoyed, right? besides that we also need to create happiness for the people closest to us while they are still alive. Because it is useless to produce as much as possible but we forget how to make it a happiness.

Whatever you spend your money on you owe no one any explanation but if you spend money on your self to catch fun and make merry you sure know that at the end death death is inevitable. Let the people around you have something they will always remember you for thetx is the essence of investment and it you are able to take care of every one around you then you have nothing to worry spending on yourself to take care of yourself.

[eightdots]

I believe that distributing funds in this manner across five categories is general and not necessarily appropriate for everyone.

Because I believe the issue is relative and varies from person to person and from country to country, income plays a significant role in the distribution of financial expenses. The higher income the greater the possibilities available for distribution, and vice versa.

I mean, for a poor person in a poor country the first item "necessary expenses" is the most important need. They may not even have the option to complete the second item, "emergency fund." Such poor people are only concerned with necessary expenses and cannot afford anything else.

I agree with you that the situation will vary from country to country and even from person to person. Many factors such as a person's expectations, the economic situation in their country, and the person's goals can cause these categories to differ. People's needs can vary according to their economic situation. Sometimes the economic situation can cause you to have a single priority, and sometimes it can allow you to make plans and implement them in many categories.

[ndutndut]

I believe that distributing funds in this manner across five categories is general and not necessarily appropriate for everyone.

Because I believe the issue is relative and varies from person to person and from country to country, income plays a significant role in the distribution of financial expenses. The higher income the greater the possibilities available for distribution, and vice versa.

I mean, for a poor person in a poor country the first item "necessary expenses" is the most important need. They may not even have the option to complete the second item, "emergency fund." Such poor people are only concerned with necessary expenses and cannot afford anything else.

I agree with you that the situation will vary from country to country and even from person to person. Many factors such as a person's expectations, the economic situation in their country, and the person's goals can cause these categories to differ. People's needs can vary according to their economic situation. Sometimes the economic situation can cause you to have a single priority, and sometimes it can allow you to make plans and implement them in many categories.

All the items conveyed by OP are indeed very good, and are indeed needed by every individual. However, the problem is as OP conveyed, not everyone is able to do it, especially for poor people of course they are only able to apply item number one, sometimes item number one is difficult to fulfill, let alone other items.

To make a plan or manage finances is actually easy in theory but in practice it will be difficult to implement, especially if income is limited. So the key to all of that is to be able to carry out all the items conveyed by OP by finding as much income as possible because with limited income it will be very difficult to run it. The point is, how much income is earned, making a budget is the main factor in our future financial planning which can help us manage income and expenses efficiently. because with a good budget, we can control expenses, minimize risks especially debt, and of course can achieve long-term financial goals.

[dunfida]

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.

1. This would be the bills and mortgages on which you would be needing to prioritize for you to live and survive on day to day.
2. Emergency funds is one of the most important thing to consider because you wouldnt know accidents and unnecessary situation could happen along the way.
3. Not only for your kids college funding and also this could act out to be your investment back up or business on which you would be needing up the capital.
4. Considering other source of income will be the best approach. Economic conditions become shit on day to day basis, so its just common sense on trying out to look for other sources.

You should be that sensible into your spending because money is something that you can easily earned and without having that proper management then you would be finding things to be problematic
and you would be having those regrets that you should have manged up your funds well when you do still have. Always be that cautious about spending into unnecessary things so that you wont be able to find yourself with those unfortunate conditions or situation.

[DYING_S0UL]

It is a good idea to categorize our spendings but many people has poor management skills hence cannot follow a strict money allocation rules. Also if one has a fixed budget, or a tight budget, it is not possible to allocate spendings on all these categories. People with minimal earnings can barely survive. As for me, I spend wherever is needed but never on anything unnecessary or luxury things. Things are already hard enough, cannot effort to spend money on useless things. Surviving however we can, saving wherever possible, spending whenever necessary, this is my usual spending routine.

[Iamgoat]

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.

I think this point is more accurately called DESIRE (based on the material explained).
Desire is something that is not essential, in other contexts it can also improve the quality of life, such as wanting to have luxury goods, eating at luxury restaurants, entertainment and vacations, these things are choices (not too much of a priority), you can arrange the right time to enjoy the pleasures of life when you get additional income.
I prefer to make wiser financial decisions to achieve better life goals, savings are certainly very much needed and can also be used as emergency funds, but when the funds are not touched after monthly financial planning, I will allocate them into investment.

It depends on what someone refer to as luxury because what is luxurious to you might not be a luxury to another person. For instance, eating a three square meal a day is regarded as luxury to someone but hunger striken to another. Eating food with 2 meats is also considered a luxury to someone but not to another. What I will say in regards to this is it doesn't matter whatever you regard as luxury, what matters is living life within your financial reach and ensuring you spend your money strategically. Don't forget to enjoy your self. I do not believe in the ideology of saying you have to make so much money before you can enjoy. What if you die before the 'so much money' you're waiting arrives

[Ziskinberg]

Is that based on ranking? If so, the ranking looks accurate.

But I read a book that suggests a better approach, after you receive your income, it should be income → savings → expenses, instead of the usual way. It’s a way to discipline yourself and prioritize saving, because that savings will be the one to cover your emergency needs and future investments.

That is an interesting approach but I have tried this and it really is not as effective, I must say because the money for the expenses usually comes in short. Then the money saved I feel like will be taken away. So, I like to pay for all the expenses first before I save the money. That way, I have no more to worry about.

If your monthly expenses are not fixed, then you will surely find it hard to save prior to spending. However, what matters is that you still reserve some funds for your saving, no matter what approach you follow. At least, when you have saved a huge amount, don’t let it sleep in your bank account because you are wasting such opportunity to grow your money.

Invest some of it instead. But make sure you do have separate savings for emergency funds so that there will be no financial problems when emergencies arise later on.

[Stalker22]

That is an interesting approach but I have tried this and it really is not as effective, I must say because the money for the expenses usually comes in short. Then the money saved I feel like will be taken away. So, I like to pay for all the expenses first before I save the money. That way, I have no more to worry about.

I think this is precisely the advantage of the "income - savings - expenses" model. It works because it forces you to confront your spending habits.  If the money for expenses comes up short, it means you need to re-evaluate your expenses, not abandon saving.  And if your expenses are consistently eating up your income before you even consider saving, then you dont have an "approach" problem, you have a spending problem.