How Much Should You Spend On…

By Melissa Tosetti

One of the most frequent questions I get asked is, “How much should I be spending on… dining out, groceries, clothes, entertainment, etc.”

We, as humans, like easy answers and the Internet is filled with pie charts stating how much you should be spending on various categories from housing to entertainment.

However, if everyone abided by those pie charts, very few people would be living in places such as the San Francisco Bay Area (where I live) or Manhattan because it takes too much “pie” to live there.

For clients of The Savvy Life, the answer depends on the conversation we have during our Introductory Meeting.  Every client has a unique situation, unique needs and unique motivators.  It’s critical to tap into all of that to craft a Spending Plan that funds the life they want to live and that is sustainable.

Over the years I’ve worked with hundreds of health-conscious clients who wanted to spend more on organic produce and grass-fed beef.  They might spend twice what someone else spends on food, but half of what another might spend on clothes.

I’ve worked with clients that love fashion – it’s a form of art and expression for them.  They’ll spend $10,000 a year on their wardrobe, but they live in cities and take mass transit instead of owning a car which saves them significantly.

During the Introductory Meeting we always ask clients what they like to do in the evening and on weekends.  Some focus a significant amount of money on their hobbies.  For others, they’re greatest enjoyment is going out to dinner.  While it looks like they’re spending significantly on Dining Out, that category doubles as their Entertainment spending.

You have a pie – the money you make. You can divide that pie up however you want to suit your needs and tastes. Just remember that you can’t have more than that one pie. You cannot spend more than you make. Of course, you can bake another, or bigger pie, by figuring out ways to earn more money but you still only ever get to spend what you make.”

There is no “one size fits all” answer.  When creating your Spending Plan, it’s imperative that you look at all the different areas of your life to get an understanding of where you want to spend and where you want to economize – then build your “pie” accordingly.


Melissa Tosetti is the founder of The Savvy Life and author of the international bestseller Living The Savvy Life. For the past eight years, she’s worked with over 545 individuals and families to create Spending Plans. Melissa also works with financial advisors and their clients doing cash flow planning as well as giving over 200 Savvy Living presentations via webinar and in-person to audiences across the U.S.

If you’d like to learn more about how Melissa works with clients visit The Savvy Life’s Programs page.

If you’d like to learn more about how Melissa works with financial advisors and their clients visit: The Savvy Life Advisor’s Page