Don’t let money control you; you should plan where your money goes.

“I have so many financial goals! I want everything and need everything, but I only earn so much, what should I do?”

Then categorize and prioritize!

“Important-Urgent” quadrants are something everyone has heard of. In addition to being used for to-do lists, it can also be applied to your financial goals. (For those who don’t know about the “Important-Urgent” quadrants, you can Google it.)

How do we measure “Important”? Simply put, if you don’t spend money in these areas, you can’t survive or maintain and improve important areas of life, such as basic needs for food, clothing, shelter, transportation, family relationships, learning and growth, career/work, social life, spirituality, etc. Everyone’s areas might be different, set them according to your own expectations.

How do we measure “Urgent”? I use each month as the measurement standard, meaning if you don’t have this expense next month, you definitely can’t survive, nor can you maintain good family relationships, learning and growth, career/work, social life, spirituality, etc., also according to the important areas of life you set yourself.

After drawing out the quadrants, there will be four areas:

Important; Urgent

Important; Not Urgent

Not Important; Urgent

Not Important; Not Urgent

Using the above criteria, think about which areas your financial expenses and goals fall into? It will differ for individuals and families, as well as by stage of life. There will also be priorities within each area. Here are various possibilities:

Important; Urgent: Rent/mortgage, food expenses, transportation costs, insurance fees, etc. that would cause survival difficulties or harm.

Important; Not Urgent: Retirement funds (financial freedom assets), further education fees (learning and growth), dining out with friends (social), red envelopes for friends and family (social/family relationships), travel to increase cultural knowledge and experiences (learning and growth/career and work), children’s education fees, wedding expenses for children, etc. that help achieve life goals.

Not Important; Urgent: Buying an umbrella because you forgot to bring one, taking a taxi because you overslept, etc. Expenses not in the budget and clearly not necessary.

Not Important; Not Urgent: Traveling abroad, buying a house by the sea to retire, vacationing three times a year, opening a coffee shop, bungee jumping, etc. all the various dream warehouse items.

After categorizing financial goals, you can more clearly match them with monthly income and expenditure planning. This is also what I mentioned last week about dividing my income into three ratios:

50% Living Expenses for Important; Urgent

20% Savings for Important; Not Urgent such as retirement funds (financial freedom assets)

20% Self-investment Expenses to help me achieve improvement in Important; Not Urgent areas

10% Dream Board Fees to let me experience Not Important; Not Urgent items, that is, to use a small amount of money in advance to experience those things I see here and there and want. For example, you can try staying at a seaside B&B in the country and see what it feels like to live by the sea. Ask the B&B owner how much it costs to live by the sea each year? What’s the weather like? You might find that the beautiful photos you see on social media are just taken on one of the 365 days, and even the photos are edited, but in reality, it’s not as beautiful as imagined. Then you’ll know whether retiring in a seaside house is realistic or not.

In the past, I would suppress my “wants,” or because of a lower income, I would feel that these “wants” were a luxury and that I couldn’t have them. But after continuously testing different financial planning methods, I’ve found that it’s very important for mental nourishment to budget appropriately to boldly experience the things I want. It’s like dieting without too much restriction, otherwise too much suppression will lead to a loss of control. Financial planning and expenses are the same.

Gradually, through various experiences, you’ll get to know yourself more and discover that the things that truly make you happy, fortunate, and rich don’t need to be many or complicated, simply simple is beautiful.

Finally, I’d like to quote a sentence I read before, “Budgeting is not about limiting your freedom, but about giving yourself the freedom to live a life you love.”

#LiveYourBestLife #MoreThanTiffany #FinancialBudget #FinancialFreedom #LiveEachDayWithMoreAwareness