What does
money mean to you? Your spouse? Your family?
These are important questions to ask, and even more importantly, they
are important questions to answer with your loved ones, especially your
spouse. We all have needs, and we all
have wants. It is how we each prioritize
and spend on our needs and wants that greatly affects where our money goes now
and in the future.
In today’s world, I would argue that our needs consist of food, shelter,
clothes, transportation, and a cell phone.
I’d even say a smartphone or at least a way to access the internet is
becoming a need in the modern world. So
how do you spend on these things? Are
you an avid saver that buys the cheapest items and saves the rest? Are you a ‘top-of-the-line’ buyer who saves
whatever is left, if anything? Or do you
fall somewhere in between? Do you need a
new $1,000 smartphone? Do you need an
expensive luxury vehicle?
What about wants? What things do you buy that aren’t needs? Do you buy too much? Too often? These are all important questions when it comes to spending, and you need to find what you can actually ‘afford’ and where you really want to be with your spending. That way, you can set and reach financial goals, like saving for a family vacation, a down payment on a house, and retirement.
Do you spend on what is actually important to you? Or do you spend on what you think is important to other people?
It is a little older research, but I doubt the statistics changed that much over the last decade. A study from 2011 showed that 61% of households that earned $250,000 per year or more, the top 2% of earners, aren’t driving around in luxury vehicles.
So do you want to spend like you are rich or spend like the rich? We’ve all been told, “Don’t judge a book by its cover.” Maybe it is time to think about what is in your book instead of what the cover looks like. Start to think forward when spending money. It may be your first step towards financial freedom.
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