Three categories of spending: preferred, emergency, unnecessary

Money and spending are part of our lives every day.  Having new ways to think about money and how we spend it can really help us set budgets, spend, earn, and save wisely.

Figuring out how to manage your money is an ongoing battle but having simple processes to follow to help you think effectively about money can really help.  Three categories of money are Emergency (those funds you need when things aren't well), Unnecessary (frivolous uses of funds), and Preferred (how you'd rather spend your money).

Preferred.  In the Preferred category we are spending our money on things we prefer that add value to our lives.  These are the things we are proud of, need, and make us more whole as people.  They are our investments into ourselves and those around us that we are happy to make.

Emergency.  In the Emergency category we need to spend money on things that came up unexpectedly like car repairs, job loss, or fixes of any kind.  This is a "risk pool" of funds that we need to have to feel safe when things go wrong. Many of us do not have a big enough emergency pool but we're working to build it.

Unnecessary.  Finally, the Unnecessary category of money is what we don't need to spend.  We shouldn't be allocating funds to this category but we probably do all of the time (expensive meals, drinking too much, unnecessary services). Many of us probably have a larger-than-we'd-like set of things in this category and we need to analyze and consider using this category less and the other two more.

Through the proper categorization and consideration of the way we use funds, we can get to a budget and set of categories and thought processes that we prefer about money.  Good luck.