Be aware of how much money you need to live the kind of life you want.
Do you have enough money to pay for healthy food, pay your mortgage payment, pay your utilities (water, gas, electric), pay for your vehicle upkeep (gas, tires, oil changes, etc), and pay for some niceties? Do you have enough money to add to your 6-month emergency fund and to go towards investing in your future?
Don’t get caught up trying to keep up with the Joneses. Don’t get caught with lifestyle creep. Don’t get caught buying things that bring you no value – no happiness, no enjoyment, that hinder your health, etc.
But also, if you’re not a “spender,” don’t always get caught up in trying to accumulate “more.” It’s talked about less frequently because less people have this issue. But why are you always chasing money? When will enough be enough (especially if you never spend it or use it)?
Money is a tool. We can use it to improve our lives. But it shouldn’t be our main focus. Work so that you can live. Don’t live so you can work…there is more to life than just working. Don’t miss out on all that the world has to offer.
What do you benefit if you gain the whole world but lose your own soul? – Mark 8:36
As a competitive, ambitious, frugal, investor-minded individual who comes from humble beginnings, this graphic speaks to me.
The competitive side of me wants to be in the top 1% of everything I do (including financial-related goals).
The ambitious side of me wants to prove to myself, my family and friends, my acquaintances, etc. that I can do anything I set my mind to.
The frugal side of me wants to have the financial security money can bring.
The investor side of me hates waste and focuses on being as efficient as possible (like investing in assets and having my money work for me).
But when I think about what’s really important in life and what brings me the most joy, it’s not money…
I’m happiest when I’m hanging out with family – whether that’s at home, going on mini adventures to the zoo, watching our kids hang out with their cousins/aunts/uncles/grandparents, or going on our yearly trips to Mohican, Hocking Hills, or the beach.
I’m happiest when I’m working out and competing with friends at the gym (whether or not they know I’m competing with them is up for debate).
I’m happiest seeing friends and playing board games with them for game night or going out and grabbing something to eat.
I’m happiest finding people homes to live in or to invest in and negotiating the best terms for them.
And when I think about all that makes me happy, I realize that I don’t need to always be chasing 💸…life is easier with money, to be sure. But as long as I’m keeping things in perspective and still able to enjoy life while pursuing money, that will be enough for me.
Don’t lose your family, friends, or health chasing money. Because in the end, what do you benefit if you gain the whole world but lose your own soul?
I saw this post from FinancialSimplified on Instagram and loved it. How many people spend above their means just to try to impress other people?
If you have the “keeping up with the Joneses” mentality, it’s going to take you a really long time to build wealth. And if you’re ok with that, that’s fine. But if you have children, maybe it’s time to shift that mindset. I say this for a few reasons…
1) It is your duty as a parent to live responsibly, and to teach your kids to live responsibly. This goes for health, work ethic, attitude, teaching them about money, etc. If you have bad money habits and idolize material things or trying to impress others with your new clothes, new shoes, new car, etc, what does that teach them?
2) You don’t have to leave your adult children anything. At that point, they should be self-sufficient. I remember my dad saying that when he passed away, he wanted his last check to bounce. I have the complete opposite mentality. When I pass away, I want to leave my kids with millions. As long as I’ve given them the proper financial background so they don’t blow the money, and I’ve raised them to be good human beings (moral, just, etc), I’d be more than happy to relieve any sort of financial burden from their shoulders. If you don’t have to worry about how you’re going to pay your bills, it gives you the freedom and creativity to try new things that can be more fulfilling.
We never know when we’re going to pass away. If you’re not financially set, or if your passing will create hardship for your significant other and your dependents, you need to have life insurance set up. It’s a small cost for you right now, but if you leave this earth without it, the people you love most will suffer the most – not only emotionally, but financially too. If you needed two incomes to pay for your house, child care, food, transportation, and general living, what kind of stress and struggle will your family encounter if you pass away and they’re left with nothing?
3) You owe it to yourself. Why is it that we love ourselves so much, we are all so selfish in a way, but we care about what other people think? Why should other people’s opinions of us matter when they don’t really even know us?
You know yourself. Are you buying that $500 fancy wallet to impress yourself, even if there is no money in it? If I did that, I would feel worse about myself. Why cave into others’ expectations? Why have no money left over to spend on an experience with my wife and kids? And, not only that, but you’ll feel like an imposter too. Sure, you look rich. But you’ll know that you don’t actually have the money to back it up.
Don’t go broke trying to look rich. Don’t try to impress people you don’t know, you don’t like, and who don’t have to deal with your poor financial decisions.
We all have to start somewhere. Live within your means. If people laugh, just know that as long as you keep saving and investing money, trying to increase your income constantly while it increasing your spending, you’ll eventually have the last laugh. You’ll get to retire early when they are still slaving away in their 9-5.
Be kind — everyone is in a battle…you don’t know what they’re going through right now. Don’t assume anything. The only thing you can control is your actions. So be kind to them. Hopefully they return the favor. If not, it’s on them, not you.
S.M.A.R.T. is an acronym standing for specific, measurable, attainable, relevant, and time-based. These goals are designed to keep you on track and motivated to achieve what you want in life. They work because instead of just having a general idea of what you want (i.e., “I want to retire early”), they make you think about the path of how to actually get there.
For example, if you want to retire early, how early? Does retiring early mean retiring at 60? 55? 45? You need to set an end date to create a sense of urgency. This will also help you reverse engineer your goal to see if it’s realistic/attainable. You’ll need to figure out how much you need to live off of per month or per year and then can use cool tools like the 4% rule to see how much money you need invested to hit your retirement goal. Are you ok living off of $40,000 per year ($3,333 per month) or do you need $80,000 or more? What expenses will you have when you retire? In addition to basic living (food, water, transportation, cell phone), will you still have a mortgage payment? Don’t forget you’ll likely need to pay for healthcare. Using the 4% rule, you’ll need $1,000,000 invested if you want to live off a $40,000/year income.
The good news is that if you’re young, you have a lot of time to make good financial decisions and allow those good decisions to compound over time. The bad news is, it’s a long time to stay focused on a goal. So Instead of taking a straight line to where you want to go, it might be more of a winding road.
How do you stay focused for 20 years? To do this, you have break it down into more manageable chunks (having “milestones” to look forward to), celebrate the wins once you achieve those milestones, review your goals regularly, have an accountability partner to make sure you’re not straying too far off your path, understanding that sometimes you’ll have to delay gratification, not worry about what others think and stop comparing your life to theirs, and have a strong reason for wanting what you are stating is your goal. Do you want to retire early only so you can sit in front of the tv all day or do you want to enjoy life with others? If it’s the latter, who’s to say you can’t do that now?
