The cardinal rule of personal finance is to spend less than you make. However, where you spend your money is also important. You should figure out what’s important to you and prioritize your spending accordingly. You can cut down on less important areas that don’t bring as much happiness into your life. For example, if you love Starbucks coffee and can’t live without it, then go ahead and support Starbucks. You can cut down on shoes or find something else to eliminate. For us, it’s housing where we spend a lot of money.
As I detailed in the Monthly Nut post, we spend $2,100 on housing/month and that works out to be about 60% of our expenses. This is a big % and it’s not even a big place. On the other hand, our 1,000 square feet condo is in a great location and we have an awesome view from every room. I thought I’d write a bit on why we choose to spend this much on a small place and why it is important to us.
The location is important because we can take public transportation and walk to many places. I’m taking a long vacation and trying out the whole stay at home dad thing. Now that the weather is nice, we’ve been going to nearby parks twice a day. Baby RB40 can walk pretty well now and he has a great time in the parks. It’s much more fun to run around outside than being cooped up inside. We also went to the library for story time and walked around in the mall when it was raining. In July, there will be many more outdoor concerts nearby and we plan to go see as many of them as we can. The location enables us to share one car and minimize driving as well. I drive about once a week to go grocery shopping while I’m off.
The view is also very important to me because we live in the Pacific Northwest where it is gloomy and rainy for 9 months out of the year. When we lived in a house in the suburb, we had more space, but the grayness really got to me. The view from indoors consists of a few trees, the fence, and gray sky. The lack of light is depressing and seasonal affective disorder is a big issue here. In our condo, we have a great view and even on rainy days I don’t feel the oppressive gloom. The condo is a bit higher up than ground level and that makes the view much more expansive and it makes a huge difference in my mood. This is the main reason why I don’t mind paying more for a great view.
We love city living, but it is more expensive than living in a comparable condo in the burbs. On the other hand, many of my friends go for much bigger homes in the suburbs and they are paying a comparable amount (or more) for housing. It all depends on your priorities and what make you happy. I’d rather cut down spending in other areas than move back to a house in the suburbs. If we move to a sunnier location, then I wouldn’t mind living in a single family home again.
What about you? Is there something that you don’t mind spending more money on?