Where Does All Of Your Money Go?

I’ve never considered myself to be “rich”, at least as far as money goes.  But since I am now retired and have more time on my hands than ever, I find myself contemplating things that I just never had the time to contemplate before. I have worked almost 50 years. I started back when I was 16 working in Bernie’s Candy Store as a helper behind the counter fixing fountain sodas and making personal pizzas for the neighborhood kids. That got me wondering. After almost 50 years, where has all my hard-earned money I made gone?

Getting a pen and paper and adding it all up

Does it make me a bit weird that I can mostly remember what my salaries were over the years? Ok, maybe I don’t exactly remember what good old Bernie paid me back in 1965 (probably about 25 cents an hour) but for the most part I actually can remember. I had some pretty good jobs and earned a good salary and bonuses back in the day so I am not surprised to calculate that I have probably earned over 1.5 million dollars (you can always look up your own earning record at my Social Security). Wow, when you say it out loud, it does sound like an awful lot of money, doesn’t it? But that makes me wonder, where has all that money gone?

Tracking my money is pretty much my hobby these days

While I can honestly say that I have recollection of what I have spent my “fortune” on during my lifetime, some is all I can recall.  First, of course are all the investments and savings for retirement in my 401k and IRA accounts over the years. Then, there are the giant purchases like the two houses and two condos I have owned over the past decades.  Yes, and then there’s the cars I bought. Those categories alone must add up to half of what I have made, or even more.

Add in the timeshare in Florida, the family vacations over the years and probably a string of one-time things that cost thousands when they came up in life, and that’s even more spending. In fact, since I have remarried in 2006, I have been keeping track of my money on my computer and can tell you what I spent on any given day during that span. Frightening a little, isn’t it? So even though I know that I have saved some, socked some away for retirement and spent the rest, can anyone actually say they know where all of their money goes?

The answer is probably “no”

When it comes to knowing where all of our money goes, the answer for most of us is that we just don’t know! We all spend money on our needs, true, but how much do we spend on our wants? Prioritizing our spending habits is the way we cope with this aspect of our lives and lets us obtain all of the necessities like food, clothing and shelter and yet still have the ability to spend on things that are fun, fads, silly or just plain self-gratifying. Realizing that is a first step in controlling spending and improving your money control. You are never too old to learn how to how to do better (although at 67, I may be running out of time!), but here are a few ways you can look at this subject and learn.

Is it a want or a need?

Truthfully, nearly everything we spend money on is really a want rather than a need. Let me explain. I need a place to live but do I need a 5,200 sq. ft. home to live in? With a pool? I’d really like a fancy sports car but do I really need one? Do I need a vehicle that’s more suited for the military than suburbia, like a Hummer? These are the kinds of decisions we make every day and it affects what we can actually do and afford in our lives. The focus of our spending really should be on what we value most and not on things that really are more for show and have no real value in our lives.

Does what I spend my money on serve a real purpose?

 Do I already have something like it I can use? Is what I am buying just going to sit in my closet and collect dust like so many of the other things I have? I must have boxes of things in my house that I have purchased, looked at once or twice and never used again, including clothes that still have tags on them. I was buying impulsively for a long while, and although it may have made me feel “good” at that time, not so much when I look back today.

Keeping up with the Joneses

We all feel a little bit of pressure to keep up with our neighbors, friends, and relatives. Well, maybe not if you’re Mother Teresa, but for the rest of us, it creeps into our lives.  I have to admit that I once had a new brick mailbox built for my home simply because I really liked my neighbor’s new one, even though I had a perfectly good one before I spent hundreds on the new one!

Planned obsolescence and we fall right into the trap

Do you really need a bigger television? 70 inches? Or how about the latest surround sound system for your home or the latest iPhone? Technology is moving so quickly these days that no matter what you buy this week, in just a few months, it will be replaced by something bigger, better, faster, and oh yeah, more expensive. You may not have outgrown your childhood habit of having the best toys on the block, and when you fall into that habit as an adult, it’s bound to cause some stress on your personal budget. Make those decisions wisely.

As the rock group The Who once sang “I want it, I want it. But you can’t have it!”

We are all human and we all have wants. It’s probably magnified by all the advertising we are subjected to and all the TV and online stimulation we get every day. We probably can’t help it and we know it’s difficult to control. But, the most important thing in your life should be concentrating on you and your family’s needs. Make sure you are building up your emergency fund, funding your retirement plan, and preparing for your kids’ college expenses. Pay off your debts.

When you are doing the right things you do deserve a reward. If you are focused on that and refining your skill at the controls, then you can enjoy a bit of the frills in life.

We all wonder where our money goes. If you track of your spending habits, you will find out the answer is just a few numbers away. Keep a budget and use your money for things you need and value. Ask yourself all the appropriate questions before you spend your hard earned money. You will be glad you did.

Do you keep accurate records of your spending? Are you short each month and using your credit to make up the difference? Are you in debt and is it because of your lack control over your money?

Gary Weiner is a retired retail/bank executive who has had several careers relating to personal finance and money management. His blog Super Saving Tips is designed to take what he’s learned from life’s failures and successes to help educate others.


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