It's time for a careful review of where your money's going.
We write about money on TreeHugger because spending shapes one's lifestyle, which in turn has a profound effect on one's carbon footprint. A frugal lifestyle is typically a green one, just as a lavish one tends not to be.
Today's thoughts on money are inspired by Trent Hamm of The Simple Dollar. He addresses a question from a reader about why people get into financial difficulties. Is it really because they're "buying too much stuff" or is it more complicated than that?Hamm says it's due to misplaced priorities. People think too much about the short term, not enough about the long term, and they end up paying the price eventually with financial instability. Hamm lists five common areas in which he sees people misplacing their money, and I'll mention three here that are particularly relevant to TreeHugger.
1. Too much spending on entertainment
In our society there's a tendency to think of entertainment as a right, and yet it should remain a luxury if we want to achieve any kind of real financial goals. It's not unusual for people to fork out hundreds of dollars to support entertainment habits that go beyond the obvious dinners and drinks out.
Subscription services (Netflix, Hulu, Spotify, Amazon Video, etc.) are all pure entertainment. Even having a big Internet plan is mostly entertainment for anyone who doesn't work from home. Shopping, subscription boxes, regular spa and beauty treatments, club memberships, buying books, upgrading tech devices, etc. are all things that entertain and amuse, but can be pared down to save big dollars.
2. Too much spending on food
You have to eat, but maybe you don't need to eat as extravagantly as you do. Focus on preparing most of your meals from scratch at home, using minimal and basic ingredients. Take time to calculate the cost per serving and you'll quickly see how choosing, say, beans instead of rice goes a long way toward lowering cost – without really affecting your level of satisfaction.
Cut out on eating out, takeout or delivery, prepared foods, alcohol, coffee to go, bottled beverages, etc. and you'll really see a difference in the amount you're able to save.
3. Too much saving for college
Hamm believes that prioritizing college savings over retirement savings is a foolish decision for most parents. It will "end up putting you at a serious disadvantage while not giving your child as much of a boost as you think."
Putting your money into a Roth IRA is much more flexible, allowing you to secure your own retirement and make a choice later on to see if your kid needs help paying for their education.
As for the TreeHugger angle, I too am in favor of expecting kids to foot their own college bill by saving, working, or taking out loans. It's in keeping with the philosophy that children's independence should be ever-increasing and that having a stake in their own education is good incentive to take it seriously. That's not to say I won't help my kids out once they graduate. (I may use my friend's trick: every year his parents reimbursed him the percentage of his tuition that matched his final grade!)
Read Hamm's full article here.