How much should you spend for housing? What’s the right amount to save? Are you spending too much on your hobby? What about charity? How much should you give to charity? People are always asking me those questions.
The ‘standard’ amount for each of those kinds of questions are at best an average and, at worst, a SWAG (Scientific Wild Assed Guess).
Sure, I realize that people ask because they are bewildered by this money stuff and are trying to make some sense of it. Since money is such a taboo topic, and no on talks about it, maybe getting some percentages of what you should spend on different categories would help you make sense of it, righty. However, fundamentally it’s like asking something like “how many pairs of shoes should I have?” Personally I know for some of my friends there is no limit on ‘necessary’ shoes. It all depends on what is important to you.
Let me tell you about Bill. Bill was a great guy that I dated in the 80’s. He was a car guy. To be more specific a ‘Vette’, as in Corvette, guy. He’d already had several in his life by the time we were dating, and while we were dating he bought a brand new one. To me, the color was ‘Taco Sauce’ (a rusty red). He had it pinstriped. He loved it. He washed it every week. (It deserves its one photo spot…so here you go!)
His family thought it was irresponsible of him to buy a $40,000 car (yep, that’s what it cost). He was not a wealthy guy. He worked as the manager of an Auto Parts store. He had a 2 bedroom condo with a mortgage. He rented out the 2nd bedroom to help pay for the condo. His car payment was easily more than his mortgage.
To my thinking, he was both happy and responsible. He wasn’t in debt. His credit was good. And he was honoring what was important to him (his car) while spending less on other things so he could still be responsible with all his other money choices. His percentages were really working for him. He was honoring what he loved, while taking good care of everything else. He just made different choices than other people.
So here’s an idea. Why not figure out what percentage you are spending now on Housing, Saving, Hobbies, and Charity and see how they feel? Do you feel good about them? Are they working for you? Do you want to tweak them?
After all, if you were to follow the guidelines of the people who publish the ‘Should Stats’, whoever they are, you’d be honoring their values, not your own. Maybe the percentages that the experts come up with are really meaningful only in how they make you feel. What if that was true?
It’s not about someone else’s standard, it’s about what works for you. Can you do both things at the same time? Can you honor what you love, while making good choices about how to balance that so you take responsibility for yourself?
Try the idea out and see where it leads you.