Now, the title of this article might seem a little strange, seeing as the answer it would seem is most things in life cost money. You’re not wrong; you do need money for a whole host of different things in life! But simply saying ‘everything’ doesn’t really cut it. So, while it might seem like a silly question with a super obvious answer, the question to ask yourself more specifically is what do you need money for in your life in terms of the key monthly expenses and big purchases.
However you earn your money, whether through your job, passive income, or something more unusual like Bitcoin (learn all the ways to store cryptocurrency safely to protect your income), you want to know what that money is going to go towards.
Somewhere To Live
The first thing that you’re going to need is somewhere to live. You are always going to be paying for somewhere to live unless you are one of the (very few!) lucky people who will be able to afford to buy a home outright at some point. It doesn’t matter whether you’re renting the property or own it; you’re going to need money. Renting a property means paying your monthly rent amount to the landlord of course. Whereas if you own your home, you likely took out a mortgage and are now making mortgage repayments to the lender; for the amount you borrowed plus interest. If you need some help working out how much interest you’re paying on that, you can use an interest calculator to work it out!
Somewhere to live is the most important thing that you are ever going to need. Having a roof over your head is essential, which is why you always need to make it your first priority. No matter whether you own or rent, make sure that any payments towards the property are made before anything else.
To Pay Your Bills
Of course, along with a property comes the bills. It’s not simply a case of paying rent or buying a home; there is the council tax, electricity, gas, water, internet, mobile phone, subscription services, and so on. Plus food shopping of course!
To Buy A Car
If you drive, a car might be essential for you. Depending on how far away you live from your job, driving might be the only efficient way to get to work. Or you might need a vehicle for other essential reasons; like to fulfill caring duties for example. If so, you’re going to need to purchase a car, and this is a big thing to buy. Even if you are buying second-hand, it can still cost you a lot of money. It’s for this reason that you’re probably going to have to save up for a while before you can even think about purchasing a vehicle.
When it comes to buying a car, you’ve got to remember that it’s not just a one-off payment to make the purchase. You’ve then got to pay for the insurance, the tax and any day to day running costs. Plus the MOT and any repairs needed. This is just something to keep in mind.
For Your Children
If you have kids, you never know when they are going to need something; the safe assumption is that there is always something that they need! It may be that they need some new shoes, new clothes, or they need money for a school trip that they want to go on. If you don’t have kids, then this one isn’t going to be an issue for you of course!
The Unexpected Expenses
Life has a funny way of throwing unexpected expenses at you right at the time where you don’t have any spare money. It helps to try to have at least some kind of savings somewhere so that if there are any of these urgent unexpected expenses, at least you can pay it off. It might drain what little you had saved, but that is still better than having to go without something you need. Or worse, having to borrow the money from somewhere.
To Avoid Debt
As long as you know what is coming in and what is going out every month, there is hopefully no need to end up in debt. Sometimes it’s unavoidable; such as if you can’t pay for something that absolutely must be paid for and there was no other way to get the money.
The problem with debt is not usually the amount that you borrow, but the amount that you payback. There are always high interest rates associated with debts. Another problem with this is that once you get into debt, it is super hard to get yourself back out of it. So it’s best to just avoid it altogether as much as you can.
To Treat Yourself From Time To Time
Finally, you might just want to treat yourself from time to time; if you’ve got money, then you’re going to be able to do this. It’s always nice to know that if there is something that you really want, being able to afford it is a good feeling. You may need to wait and save a little before you can get your hands on it, but that’s okay! Patience is a virtue, and you know that you’re going to get what you want, so it’s just a case of waiting a little while longer.
It’s true that money is not everything and there are things that matter way more, but the fact is we all need some money in life.
*This is a collaborative post