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How to think about your financial vices

Back in September, I was quoted in this article on personal vices:


"Consider setting aside enough money to cover bills and emergencies first, says Gordon Achtermann, founder of Your Best Path Financial Planning in Annandale, Virginia. Make room in your financial plan for long-term goals, too.

'Whatever is left over can go toward vices,' Achtermann says."


Here is my full answer, including the vital part that is not quoted.


 Q: What percentage of their budget should people set aside for "vices," like take-out food,


A: I find that this is precisely the wrong question to ask.  You have to set aside money for bills, and emergencies first, then for longer-term goals.  Whatever is left over can go toward "vices".  For example, a single, 50ish person with little savings living on a small teacher's salary would have a "vice" budget as low as they can tolerate.  Because even if they saved every penny their chances of having a comfortable retirement is, unfortunately, quite low unless something major changes.  On the other extreme, a married couple with both people working and a big nest egg from the sale of a tech startup can probably spend all they want on vices as long as they don't dip into their principal base.  They already have enough cash to fund their retirement goals and are working just for the fulfillment. 


 Determining where you are on this wide spectrum is critical, and much more worthwhile than picking a percentage and trying to stick with it.


Read the full article here --> https://www.bankrate.com/personal-finance/smart-money/financial-vices-september-2018/