In our last post we talked about how much money the average family spends per day and where exactly that money goes. We discussed food, housing, and automotive expenses.
The next category is travel and entertainment. This includes vacations, going to the movies or to concerts, or visiting amusement parks such as ITZ or Cliff’s. A safe estimate would be about $6,000.00 per year on travel and entertainment.
Our last category is merchandise. This includes pretty much everything else, from shopping for clothes and other accessories, to getting “pampered,” to buying things to improve your home. I think this is a huge part of where people spend their money. So many people go to department stores and “splurge” on things like clothes, shoes, accessories, nails, haircuts, and anything else you can think of. We’ll put about $6,000.00 per year into this category. That is almost as much as we spend on food! But food is a necessity, and merchandise is not always a necessity.
This leaves about $3,400.00 for other expenses, which includes any unexpected things that may come up, or if you would like to spend a little more in another category. That doesn’t seem like enough to cover any emergencies for a whole year, does it? Now remember, this is just an estimate of where our money goes and every household is different. Obviously, people who make more money spend more money or if there are more people in a household then you have to assume that the cost of living is higher, and there may be dual incomes. But it’s still safe to say that it would be good for all of us to try to save a little more.
If this breakdown surprises you, don’t feel bad. Most people spend and spend and spend without even realizing where the money is going. Then before we know it we find ourselves waiting for our next paycheck just to get through the month.
There are several ways to fight this pattern, though. Start by keeping track of all your expenses and identifying areas in which you can cut back. You should also open a savings accounts, CD, or IRA account and make a commitment to contribute to them each month. In fact, making a new spending category as part of your monthly expenses will help you make saving a priority. State Employees Credit Union can help you with all of these goals. Visit your branch or contact a representative today!