Almost every client we work with circles back to the same question: “How can I spend money without feeling guilty about it?” We know how hard you work for your money, and you want to enjoy it guilt-free.
Today, we’ll tell you about the best way to spend money without feeling guilty.
The Best Way to Spend Money Without Feeling Guilty
People fear that once they start working with a financial advisor, they’ll be instructed to stop spending and start investing all of their money. Of course, investing is an important element of financial planning, but it should never be the only thing you do with your money. After all, what fun is life if we don’t get to reap the rewards of our hard work?
At Ocean 6, we believe you should get to enjoy your money. We want to show you the best strategies for reducing taxes and allocating funds so that you can spend money without feeling guilty.
Spending is Never the Problem
If spending is not the problem, what is? The problem is not knowing where your money is going and spending it on the things that aren’t most important to you.
A classic example is dining out. You might be thinking, “I work hard for my money, and I enjoy good food. So, I should get to dine out as much as I want.”
You’re absolutely right. We’re not here to tell you that dining out is something you shouldn’t do.
Instead, we’re here to help you put some intentionality behind spending your money in this way.
How to allocate money to your important goals
If you unconsciously eat out every day without some intentionality behind the costs of doing so, then it can easily get away from you. Before you know it, you’ve spent hundreds of thousands of dollars in your life on meals that you quickly forgot or didn’t enjoy that much. And these costs ultimately mean you’re also sacrificing being able to spend money on other important things to you.
Think about it this way, after you pay your mortgage, your bills, and your other living costs, let’s say there’s $10,000 leftover at the end of each month. Do you want to spend all $10,000 on fine dining? Or do you have other important goals you want to allocate your money toward first?
Let’s say you’ve wanted to get your dream car for a while now. It will never happen if you don’t focus and pay attention to attaining this goal because it ends up at the bottom of your wish list.
But if you were to focus on it? You become aware of when you are overspending in other areas of your life and how it can put you further away from buying that dream car.
Again: Spending money is not the problem.
But are we saving money toward our important goals first and spending what’s leftover? Or are you spending what you want and saving what’s leftover for your most important goals?
(Are you working on getting your spouse on board with your financial goal-setting? This post tells you how)
A cash flow plan is not a budget plan
The key to a successful cash flow plan is getting very clear about your goals first. You don’t need to count every dollar you spend on coffee or meals. A cash flow plan is about putting money towards the important things first and spending what’s leftover.
We have plenty of resources for financial goal-setting that you can find here.
(This post also covers why it’s important to set goals beyond “make more money”)
Let’s assume you know what your important goals are.
What you want to do first is carve out what you are committed to spending every month. These are things like your mortgage, bills, and other living costs. We call these your committed expenses.
Next, you intentionally put away and allocate money toward your important goals from what’s left after your committed expenses.
Lastly, the remainder is what we call your “weekly spendable.” This is what you can spend on things like dining out or whatever else it is you enjoy, all without any guilt because you know you’re actively working toward your most important goals. That’s the best way to spend money if you ask us.
Remember: no two cash flow plans are the same, even if two people’s income is the same. Financial plans vary depending on your individual goals, but one thing is for sure: the more you stick to these simple tips for the best way to spend your money, the sooner you will reach your biggest goals.
We can help you create a cash flow plan that helps you spend money guilt-free while saving towards your biggest goals. Book a call today to find out how we can help get you closer to living your dream life.