How do you spend your money?

By Randell Tiongson on April 3rd, 2016

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” – James W. Frick


The most fundamental of issue on personal finance is money management.

One of the most common questions I ask all my financial counseling session is this – ‘how do you spend your money’? The first things we need to establish is reviewing the cash flow statement. Looking at the expenses gives me a quick look at the financial situation of a person and most of the time, I’m pretty dead on.

The cardinal rule on being wealthy is this – “Spend less than what you earn and invest the difference.” The first and most difficult hurdle is often the spending less part. I’ve always believed that there are only two forms of an expense – its either a need or a want. Lo and behold, most people I know (me included) who had a problem having a healthy cash flow are those who have difficulties controlling their ‘want’ expenses. In extreme cases, I’ve witnessed some people bring down their ‘need’ spending just to maintain their ‘wants’ – yikes!

The prudent thing to ensure we will have a healthy cash flow (where inflow of cash is far bigger than its outflow) is for us to be sensible in the way we spend. There is really nothing wrong on spending on ‘wants’ but when those spending are causing you to have a very unhealthy cash flow or worse, being in debt, it’s time to STOP.

Our income is always finite therefore we must be very wise in the way we spend it. Priorities should be clear, communication between spouses and between children should be open so that everyone in the family will understand about priorities in the family income. I implore parents, specially fathers to take a strong lead role in coming up with a healthy family finance so there will be peace and harmony.

I strongly believe that we have the power to curb our wants. We are all rational and logical – its time our finances reflect our real priorities.  “Reason should be superior to emotion; you are what you think, not what you feel.” – Francis Kong

A patient man has great understanding, but a quick-tempered man displays folly. – Proverbs 14:29, NIV




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How do you spend your money?