michaelrestiano

Figuring Out My 5 Financial Things

Blog Post created by michaelrestiano Employee on Apr 14, 2017

Lately, I’ve been obsessed with Warren Buffet’s 25-5 rule. If you’re not familiar, it’s a simple exercise to help you figure out the things that matter to you most. You make a list of 25 things you want to achieve in your life, and circle five of them. Then, you instantly forget about the other 20—and focus only on achieving your top five.

 

The point? Spreading yourself too thin and not prioritizing your goals results in you getting none of them done. If you ruthlessly focus your time on only five, you’ve got a greater chance of success. And, if they truly were the top five, achieving them should maximize your happiness.

 

While I’ve tried to apply this rule to my life goals, I also thought Buffet’s advice applies nicely to personal finance. The idea came about when a friend told me they dropped $300 on a pair of Yves-Saint Laurent sneakers, and I had to collect my jaw off the floor.

 

I would never spend that much on shoes, but that’s just me. My friend obviously has fashion as a part of his top five—he’s chosen to prioritize spending his money on it instead of something else. So, after much internal debate, here is my financial top five—just in time for financial literacy month, too!

 

Keep in mind that these categories only relate to the money I’ve marked for spending. Other far more important categories like retirement savings, debt repayment, and more aren’t counted here because they’re funded beforehand. 

 

1. Travel

 

I’m a sucker for visiting new places and exploring the world. In general, I’d say I tend to prioritize spending money on experiences rather than material objects. Hence, why travel is so high up on the list for me.

 

Now that I live in a different part of the country from my family and close friends, travel has also become a way for me to reunite with my loved ones.

 

From plane tickets, to hotel stays, to rental cars and Ubers, I have very few reservations about sinking money into this category throughout the year. 

 

2. Books

 

I don’t think I’ve stepped foot in a bookstore in the last 5 years and not walked out with something in my hands. I’m a gigantic book nerd, and if Barnes & Noble had a loyalty card, I’d probably be on my fifth free book or something for the year.

 

While books are obviously material objects, I think they still help us generate lasting experiences and memories—just of the mental variety. Therefore, they’re worth it to me!

 

3. Personal Training And Gyms

 

It’s scarily easy to take good health for granted, and fitness is obviously key to maintaining it. And while I don’t think I’ll ever actually become one of those people that, you know, enjoys exercise, over the years I have found a few things that keep me going to the gym again and again.

 

Working with a personal trainer is probably the biggest of those things. Having somebody else hold me accountable for achieving my fitness goals has been a surprisingly effective way to stay motivated, so that I keep going back to the gym even when I don’t want to.

 

4. Good Food

 

Maybe living in San Francisco has ruined me, but I think I’ve officially become a n00b foodie. And while I’ve yet to degrade to the point of taking constant food Instagrams, I do like to splurge on a good meal out with friends.

 

For me, it’s less about the food, and more about enjoying the experience of trying out a new restaurant with other people. It’s a social and communal experience, and I think that’s what I value most about it.

 

5. Entertainment

 

I like to go out. Like, a lot more than I probably should (cue the “you’re only young once” narrative). From concerts, to DJ shows, to long nights at the bar, a good chunk of my cash goes to just having fun. And again, that’s totally OK by me because I know the memories that I’m making with my friends will last long after the bars close.

 

Have you thought about your financial top five? I’d love to hear about them in the comments! Sign up or log in with your Salt account to share!

Outcomes