LIST YOUR WANTS VS. NEEDS
“Set priorities by creating a list of short-, medium- and long-term savings goals,” says Judith Cane2, a money coach based in Ottawa, Canada. Start by listing your baseline needs, including living expenses, transportation, an emergency savings fund, as well as education and retirement funds. Once you’ve established this list, you can account for the things you want. Even if your “wants” are more extravagant—like expensive vacations or hobbies—it’s a valid savings goal if it’s important to you. “I have clients who have a $4,000-a-year clothing account,” she says.