The Enough Equation
What is enough it's a question I often ask myself and other people. Specifically, within money how do you figure it out?
It's two things. First, there's a mathematical equation. What is do you need to contribute to your retirement, pay your grocery bills, pay the mortgage, pay for your kid’s school? The second part of the question is bigger. This question looks into the internal investigation of what money really means to you. You need to figure out what your money script is, if you want to know what a money script is check out my other blog.
Let's go over the mathematical equation. Download, find or make a budget for yourself. I use this one from Excel. You'll need to include your housing costs including your mortgage or your rent, how much electricity, Internet, waste removal, maintenance and repairs will cost. In addition to housing there will be transportation do you own a car or own other things with motors? How much does that cost? What's the fuel and maintenance? You can find maintenance schedules online for most vehicles. Now look at insurance, doo you have life insurance what does your health insurance cost maybe even your home insurance if it's not included within the budget number of your rent and mortgage.
Then we have food; what do you spend on groceries or dining out? After that we have pets and kids, how much is the food, the daycare, the day camps, the grooming, the babysitter,s the toys and the medical bills? Next, we have personal care which can include; hair, clothing, gym membership, home cleaning services, and the things that are there to take care of you. Now we have entertainment. This includes streaming services date nights, live theater, concerts, and a big hobby. After that, we've got loans maybe you have student loans or a second mortgage or credit card bill that you have a certain amount of money that you need to pay on. After loans we have taxes, you don't have to necessarily include that on it’s own but if you don't have it included in other parts of the budget you're going to want to know your federal, state, local, and sales tax.
Next, we have our savings and investments, so are you contributing to an emergency fund, a retirement account, an investment account, or a 529 plan? After that we have a gift and donations to consider, do we save up for Christmas, weddings things like that? Lastly, I include a column for vacation. I have my couples vacation a family vacation, and then two separate vacations for just me and just my husband.
If this feels overwhelming don't worry, it's a lot of stuff. What's important is to stop avoiding and start engaging with our life and money. Money is a resource. It's something in exchange for something else, a trade. When we know the numbers in our budget, we start to figure out what enough means.
The second part of the “enough” equation. When we think of what doesn’t go on a budget a few things come to mind. It can be time, it might be relationships or some other non-monetary value item. These are the things we need to consider in our life as part of the equation for enough. Enough when including priorities and value on time may change our equation from the mortgage being the Victorian mansion in the beautiful old part of town to a two-bedroom 1 bath house that allows you to work less.
The value of something like time, and relationships are the harder parts to put a price on. What's for sure is that you cannot figure out where you're going unless you start to put things down. What are your goals? Maybe your vacation bucket is really big, money is a resource, which means you have a certain amount of this resource and you can do things with it, whatever you do with it is your decision and your choice. But if going out to eat isn't important to you and when you put down on the budget that it's taking up 25% of your income, that's something that you can change. And you can make vacations 25% of your income instead. The point of finding the answer to what’s enough should be to align your priorities and your values with your money.