Highly Favored

Finance Fridays: Are you eating your money?

I’ve been reading Faith-Based Family Finances by Ron Blue and Jeremy L. White, CPA – I’ve always been compelled to cut wasteful spending, but more than ever in the past few years.

As I was reading this book, I was moved by this sidebar quote:

“Whenever money is used consumptively, it is gone forever and can never be used for anything in the future.” (43)

It caused me to analyze how much of my finances are simply being consumed and virtually disappearing. I envision that old Quiznos or Subway commercial where they showed people eating five dollar bills – the point was their sandwiches were five dollars – the slogan was something like “a tastier way to eat five dollars” – something to that effect. I don’t know if the advertisers who developed that commercial were intending to be insightful, but really, every time we eat out an restaurants, we basically eat our money.

I think about how many times, due to exhaustion, I turn to restaurants to feed my family. I wouldn’t allow that same money to slip out the window, nor would I light it on fire, but that’s basically what’s happening when I hand it over in exchange for a meal. If I ever plan on having financial independence, this is an unnecessary expense that must be cut or at least greatly reduced.

I think about the money I spend on movies and entertainment, cable television and movie rentals, books, etc. This has probably been the greatest threat to my bank account. Over the years, my husband have spent unmentionable numbers on DVDs, trips to the theater, and monthly cable fees. And ever since that switch to digital, it really has made cable a staple utility if you plan on watching any TV at all. I suspect that was the intent, but thanks to innovations in internet television and sites like Hulu.com and Youtube, it might be possible to wean my family off of cable (maybe). So there is hope. Plus, there’s so many other things we should be doing besides watching television – life shouldn’t always be about entertainment. Time spent in front of the TV is less time spent doing something helpful, productive and/or profitable – another reason to reason to dramatic cut this expense.

Shoes, clothing and household items are expenses we rarely consider, yet they can also take a huge chunk out of our account. It’s easy to spend to much money on clothing and shoes we like. Knick-knacks and home decor items are equally tempting. These are items that can be purchased second-hand for a portion of the original price at stores like Savers or Goodwill. This is one area that I can say I do okay in – in fact, I often get compliments on my clothing and when asked where I got it, my reply is usually, “The Goodie” which is my code word for Goodwill. I often find new or close-to-new name brand clothing there at a price that baffles my trendier younger sisters. Savers is good for it’s household and decor items, I often find nice things there that look great on my shelves. I’m finding less and less reasons to purchase things at the mall.

While these are the main areas of consumptive spending in the average household, there are certainly many others. My goal for 2010 is to work on getting a serious financial plan together so that my children will have more options for their future – if not theirs, then it’s my hope that my grandchildren will be able to enjoy greater financial freedom. But I’ve got to cut wasteful spending right now.

How about you? What consumptive spending habits are keeping your accounts in the red?

If you enjoyed this Finance Fridays post, you may also like:

Why Tithe?

If you’ve enjoyed the posts on this blog, please take a moment to Subscribe via RSS or Subscribe to Highly Favored by Email.