Strategic investments are a necessity if you want to secure your dream financial future, but such investments are often thwarted by the reality of the cost of living. Is there a way to bridge the gap between the dream and the reality?
Yes, there is, and all you need is the right perspective: the more money you save, the more money you have to invest, and a plan: avoid certain spending activities, starting with those below.
Keeping Up with the Joneses
Your brother’s kids go to a private preschool, your neighbors bought a Mercedes, and your coworker just returned from a cruise to the Caribbean. Meanwhile, you’re on your side of the fence feeling left out or jealous. As humans, we’re hardwired to want to “win.” In the past, this was because the winner got the food, or the girl, or to live another day. While those circumstances are mostly gone, our drive to win has never waned.
But “keeping up with the Joneses” isn’t a feasible financial strategy – sometimes even if you’re the Joneses. Buying or doing things to keep up with others or make them jealous is giving up what you want most for what you want now. Living within your means will secure a better financial future than giving in to your instinctive need to win. (Try telling yourself you probably get seasick anyway.)
Buying Things You Don’t Need
If you have a cable TV package, be honest: how many channels do you actually watch? Or how often do you buy groceries and then decide to eat out? Consider looking into alternatives – streaming video instead of cable TV; you’d even be better off choosing to eat out than planning to eat in, buying groceries, and then eating out anyway.
The problem is that we frequently overestimate what we need, or we mistake something we want for something we need. In America, it’s pretty safe to say you need a car – but do you need the sports car that requires premium gasoline and an expensive insurance policy?
Essentially, all of our money problems stem from the desire to get what we want when we want it, regardless of the cost now AND the cost later. But, as with every other goal, you can help yourself achieve a better financial future by putting a plan down on paper.
A Concrete Plan
Consider your financial dreams to be a destination – and, as with any destination, sometimes you need a little guidance. When you’re driving somewhere unfamiliar, you might use a GPS to guide you; for a financial destination, it might be best to consult a professional financial planner.
At Holdfast Wealth Management, we offer the services you need to make your financial dreams come true. Contact us today for more information.