Debt-Free by 30! Struggling to Understand…
December 2, 2011 § Leave a comment
Understanding finance is key to taking control, so the authors cover the three kinds of expenses: fixed (rent and loans), variable (lunch, movies, makeup), and what they call “occasional expenses” (birthday and holiday shopping, car registration). Since only Bill Gates can spend whatever he likes, everyone has a budget. Not a dirty word, budgeting is tracking what you earn and what you spend. Understanding our variable expenses in particular is the key to getting our money under control.
That won’t happen without having a real serious conversation with ourselves about priorities. When you’re a kid looking at the world, it seems that everyone has all kinds of cool stuff, goes on great vacations and has great toys and that you are the only one suffering from not having everything you want. As you grow you learn that no one has everything they want, even if they have all the money in the world. Everyone has to prioritize how to spend their time, their lives and their money.