Deciding On Your Financial Non-Negotiables

Creating a budget that actually fits your lifestyle is a tough thing for millennials, Gen Zers, and Gen Xers alike. After all, it’s hard to create a budget that doesn’t feel restrictive, and it’s often even more difficult to build a budget that prioritizes the right things for you. In a world full of budget templates and apps that seem not to work for you, it’s easy to put budgets aside and spend without abandon.

Here’s the thing, though: creating a budget is key to living a financially free lifestyle. The key to doing it the right way? Defining your financial non-negotiables, deciding on your financial goals, and then building it out from there. By getting a grasp on what you absolutely want to spend money on (and what you don’t), you can create an efficient budget that’s also effective. Here’s what you need to know.

What’s a financial non-negotiable?

A financial non-negotiable is an item in your monthly budget that you will make room for, no matter what. On one level, these non-negotiables are going to be the things that keep a roof over your head and a car in the garage. These are things like your rent, your utilities, your health insurance, and your car payment. Similarly to the famous Maslow’s Hierarchy of Needs, these are the foundation of what you need in life, and they’re the foundation of your budget — no matter what, these are the things that need to be taken care of and paid for.

However, not all non-negotiables need to be things like your mortgage and your car insurance. A truly financially free life also means that you consider your happiness a non-negotiable, too — and those are the non-negotiables that are truly up to you. For some people, this may mean creating a sinking fund for something like travel. For others, this might mean a larger restaurant budget. The only thing that matters? Tailoring your non-negotiables to you… and not to anyone else.

How can you decide your own financial non-negotiables?

To decide on your own financial non-negotiables, you’ll need to do a little bit of inner work, goal setting, and priority shifting. After all, your non-negotiables are yours — and no one else’s. Here’s how you can decide on your own:

  • Make a list of everything you pay for each month (think: rent, insurance, car payments, utilities, subscriptions, etc).
  • Make a list of things you must pay each and every month, without fail
  • Make a list of things you pay for each month that truly benefit you and your happiness
  • Make a list of things you pay for each month (outside of necessities) that don’t benefit you and your happiness in some way

Now that you’ve done that, go through and underline what you consider to be your non-negotiables. Scratch out everything else. These are the things that you must pay for, but they’re also things that bring you joy, elevate your happiness, and add value to your life — and it is, truly, that simple. When you build out a budget and start to base your purchasing habits primarily off of what brings you happiness and value, you can start to find actual financial freedom.

At CIFS, we’re here to help you find that balance between smart financial planning and living your life. Find more resources here