Morning lattes, lottery tickets and lunch dates -- necessary expenses or a waste of money?
Morning lattes, lottery tickets and lunch dates -- necessary expenses or a waste of money? - 
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How do you waste money? We heard from a lot of you about your morning lattes, lottery tickets and lunch dates. One listener said she buys far too much chocolate. But "waste" is subjective. Here's a fact about personal finance though: you have to plug the leaky holes in your spending to stick to a budget.

If you can learn to do that, Paula Pant says you can eventually buy whatever you need -- and want, too. She is a personal finance journalist and author of the aptly named blog, Afford Anything. Pant joins us to talk about spending habits and answer some of your questions about waste.

We all waste money, one way or another. So how should people think about where to draw the line on their budget leaks?

"There's a difference between wasting money and using money in ways that you enjoy," says Pant. "Don't fall into the trap of thinking that any money that you spend on fun or entertainment is necessarily a waste. I mean, those are the memories you're creating that you'll look back on 20 years from now and think, wow, I really enjoyed those times in my life. That's not a waste at all, in fact, it's arguably some of the highest and best use of your money, as long as you do it in a constrained, judicious fashion."

One of the trickiest aspects of budgeting is separating your wants from needs. To help make it easier for you, we created a simple three-step guide.

Several Marketplace Money listeners wrote in to ask for advice about how to get their spending under control:

  • Kari, an orchestral musician in Charleston, S.C., wants to know how she can curb her social spending. As someone who spends a lot of time practicing alone at home, Kari enjoys going out with friends but often comes home with a bar tab of $100 or more.
  • Seth is based in Houston, Texas, but as a management consultant, he spends long stretches away from home. He likes to unwind by watching newly released movies in his hotel room, but they cost him $20 a pop, and often he falls asleep on the first-run films after working a long day.  He wants to know if his hotel movie habit is a waste of money.

"As a general rule... there's nothing wrong with spending money on entertainment," says Pant. "And in fact, there's a rule if thumb that says that you should spend roughly 50 percent of your money on necessities, another 30 percent on discretionary spending and then 20 percent on savings.  If that entertainment is contained within that 30 percent portion, then generally speaking -- assuming you don't have any huge credit card debt or anything like that, that should be addressed first, and assuming that you're saving enough for retirement and taking care of all of those things -- then there's nothing wrong with spending money on your social life and entertainment."

Click play on the audio player above to hear more of Pant's advice.

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