“The last thing family and
friends want is for you to spend money on them that you don’t have or that you
can’t really spare.”
-
Suze Orman
True friends and loving family
members will ultimately want what’s best for you. While everyone has a few
people in their lives that are considered “takers,” most of those with whom you
share affection, friendship and love will generally demonstrate generosity and genuine
concern for your well being. You should not have to “break the bank” in order
for your friends and family to be involved in your life. Be wary of those who
are only around whenever there’s a party, special event or during times when
you are open to spending money freely. Do
not be misled; there are definitely people who are only out for themselves.
Such takers can be identified when they use you repeatedly for whatever you can
do for them, while never returning the favor. Use discretion in your
relationships whenever you notice that you are always the one footing the bill
or picking up the check. While some people are legitimately less able to give
financially than others, use discernment when you continually notice that you
are always the one being generous and the other person is always on the
receiving end of your philanthropic gestures. The following will discuss
defining necessary expenditures on associations, unnecessary, extraneous lavishing
on your associations and designing a basic entertainment budget.
Defining necessary expenditures on associations
“Not he who has much is rich,
but he who gives much.”
-
Erich Fromm
Time well spent and quality
relationships that edify your soul are far more valuable than any amount of
money. The important moments in life cannot be retrieved once they have passed.
Many people enjoy spending money on their friends. However, some find it
difficult to curb their enthusiasm while dipping into their checking account as
the good times roll. Even so, it is not the stingy person who has the most
rewarding relationships in this life. The true challenge is in finding the
balance between enhancing the moment and maximizing your money in relation to
the level of exuberance achieved in the process. While this judgment is
typically defined by the wisdom of your experiences, this is definitely something
that can be honed like any other ability or skill. So, how can one define when
it’s appropriate to spend up or when to be frugal? Well, the way I define my
level of finances committed to whom I associate is established by the three
“P’s”:
·
Purposeful
·
Personal
·
Professional
For instance, can this
interaction help further my purpose or life’s mission? Does this interaction
require a personal response that can best be achieved through the spending of
money to acquire goods, services or experiences to fulfill my intended
objective? Is this a professional level association that would further my
career goals and, directly or indirectly, allow me to gain more income or
resources to achieve more in my personal relationships or to fulfill my life’s
purpose?
Defining unnecessary expenditures on associations
“We’re convinced that we need
money to have friends and partners, but actually I’ve found the opposite to be
true.”
-
Mark Boyle
There is a big difference
between having money and having true friends. While those with financial
provision may have people in their lives that are willing to keep them company,
true affection, love and friendships cannot be purchased. Perhaps people like
you and I simply enjoy spending our money on those who we care about the most.
While there’s nothing wrong with the occasional splurge or special event, it is
necessary that we do not just spend or go on a shopping spree on a whim! The
person who allows their emotions to control their spending will soon come to
poverty. So, how then should we determine when spending has become an
unnecessary expenditure? Well, the way I define my level of unnecessary
finances committed to whom I associate is established by the three “B’s”:
·
Beneficial
·
Boundaries
·
Budgeting
For instance, can saving the
money that would be spent in this circumstance be more beneficial than the social
interaction achieved by this expenditure? Does the money spent during this interaction
require me to violate the boundaries of this relationship or of another relationship?
Will spending this money on my associations fit within my established
entertainment budget?
Design your basic entertainment budget by category
“He who loses money, loses
much; He who loses a friend, loses much more; He who loses faith, loses all.”
-
Eleanor Roosevelt
If you currently have an entertainment
budget, the allowance amount is likely unrealistic compared to the amount of
money you actually spend on meals, diversions and special events. Just remember, all those “extras” are not bought
with money, but with hours of your life. Whenever you choose to spend those
greenbacks on your associations, consider that you will have to work hard to
replace whatever you spend out of your bank account. The fewer indulgences that
you select, the fewer hours you will ultimately be required to work. Remember,
while this list will look similar for most people, others who are more socially
and professionally connected will possibly have to add several categories to
this example in order to achieve balance between their spending on associations
and staying within their overall budget. The following is a list of basic entertainment
categories in modern society:
1. Dining
(25%): This amount
reflects any place you purchase food, drink, desserts or other digestive
consumables outside of your grocery purchases.
2. Live
entertainment (20%): All
concerts, live theatre and other events typified by the enjoyment of human
performances are to be taken into account in this category.
3. Date
night (15%): While some
may choose to bump up the percentage on this category, this would be reserved
for alone time with your significant other or spouse.
4. Sports
and hobbies (15%): Whether going
to a sporting event, running a marathon or enjoying a round of golf, this
category would be set aside for such leisure events.
5. Miscellaneous
(25%): While this
number can be higher, I would recommend a minimum of 25% of your entertainment
budget to be listed as miscellaneous. The reason being, life is dynamic by its
very nature and you simply cannot plan for every event that you want to do. The
fact is, there will always be events that come up last minute or are not
scheduled that you will want to enjoy. Having such a large amount in the
miscellaneous category will allow you to remain flexible.
While it’s likely that you
will have to tweak these numbers and categories, keep in mind that this is just
an example of what your basic entertainment budget may look like. Whether you
add categories or subtract others to create your own version of this budget,
your financial choices are entirely up to you. Using this example as a
blueprint for how to proceed within your entertainment budget will aid you in
your pursuit of making the best financial decisions among those with whom you
associate.
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