The difference between defining something as a need or a want can mean the difference between a blown budget or a healthy savings account.
These terms seem so simple and easy to understand, but all too often, we blur the lines. When you say you “need” something, it should mean that you literally can’t continue to function without it. Unless we’re talking about the need to eat, be clothed, stay healthy, and have a bed to sleep on, most of the “needs” in life actually fall under the category of “want.”
It’s funny how we reason with ourselves until we’re convinced that something we want is actually something we need. I need a new purse for summer. I need a manicure. I need new shoes.
In this case, our definition of need becomes anything we want desperately enough that our personal happiness will be hindered without it.
This is a cultural trait; we feel the need to measure up to those around us, to keep up with the current trends, to have the coolest car, the nicest house, or the most elaborate wedding. Although there’s nothing wrong with gratifying some of our wants as our circumstances and finances allow, it’s dangerous to categorize every new thing we want as a need. [ continue reading... ]
If you’re a fan of reality television, you’ve probably seen a show with contestants who live on a ranch working day after day to lose weight and get healthy. I’ve often thought to myself that I could easily lose weight and achieve an incredible level of fitness if I were given the opportunity to leave behind all the responsibilities of real life for a few months, and instead, concentrate every waking thought and action to my health.
The goal is for contestants to use their time on the ranch to develop healthy eating and exercise habits. The hope is that contestants will see how much better their lives can be with their new habits, so that they’ll find a way to integrate them into their daily lives once they return home.
How This Applies to Financial Habits
Though it’s the most common excuse for being out of shape, lack of time is also a reoccurring offender on the list of financial excuses. People may blame time as the reason why they’re not reviewing their finances, creating a detailed budget, or dealing with other bad habits. Believe me, I understand. [ continue reading... ]
You’re constantly falling off the bandwagon when it comes to reaching your financial goals. They seem so big that you’ll never reach them, and you just can’t remain focused.
Over the past couple months, I haven’t been my usual highly-motivated self. Instead of working ahead and paying attention to my bottom line, I’ve been slacking. Recently, I realized why.
These last two months of chaos have lacked structured goals, so I’m essentially wandering aimlessly in the dark. The good news? My two months of zero progress have reinforced my belief that setting financial goals is vital to success.
If you’re new to setting financial goals, here are three tips that will help: [ continue reading... ]
One of the first questions we ask anyone we meet is: “What do you do?”
Our society places a great deal of importance on the work we do. Your job determines how much money you make, and on some occasions, the level of prestige you have in your community. Your job may give you an idea where you fit in the world.
In many cases, we let our jobs define us on a very basic level. Here’s what I mean: [ continue reading... ]
Inflation is the rate at which the prices of goods and services rise over time. This phenomenon may seem like a plan hatched by an evil mastermind, but inflation isn’t necessarily a bad thing. It’s generally a sign that the economy is growing — and during your working years, you can usually expect your wages to rise with inflation so your spending can keep pace.
The big problem arises when you’re trying to save money for your retirement, since inflation erodes the purchasing power of the money you put aside. When inflation averages 3.5% per year (and it generally falls between 2% and 4% each year), prices double about every 20 years.
If you hope to retire at age 65, then you have to account for prices to double while you’re working and during your retirement.
Here’s how you can protect your nest egg from the destructive power of inflation, both before and after you retire: [ continue reading... ]
Surveys indicate that the average American wedding costs about $28,000. With couples dropping so much money on an event with many moving parts, it’s becoming increasingly popular to purchase wedding insurance.
This concept wasn’t even on my radar when I was married, and it wouldn’t have been something I considered necessary. But, then again, I spent about 1/3 of that average on my wedding.
Although I’m tempted to scoff at the concept of insuring a one-day event, I do realize there are legitimate reasons this might be a prudent financial decision for some.
What Is Wedding Insurance?
Weddings are now planned up to a year in advance. All of the deposits, reservations, and non-refundable expenditures add up, and if something goes wrong at the last minute, there’s no time to recoup the loss. Wedding insurance is designed to cover unfortunate events such as a venue being double-booked, or the wedding dress getting ruined before the big day. [ continue reading... ]