Published on June 12, 2015 9:41 am, by Peter Lord
A simple question “Why is money important to me?”
It’s a powerful question to ask because it can help guide you in nearly every money decision. Whether it’s “should I buy my lunch today?” or “should I buy a new car?”
When you don’t know why money is important to you, you will find you are spending blind and buying stuff you don’t need or want. Did you know the average Australian household spends more than $1,226 dollars every year on things they never use?
You are far less likely to waste money on stuff when you know what is important to you.
Spending now will cost YOU later
If you don’t know what you want its easy to fall into the trap of spending without considering what it will mean for future you.
It’s spend now because I don’t want to miss out. But miss out on what? If it’s a choice of a new flat screen TV with a dent in your savings or additional credit card debt, people will buy the TV.
But if it’s a choice of the new flat screen TV or a possible holiday to Turkey suddenly you have real choice.
Personally, I would choose Turkey everyday of the week. Because for me it’s travel. Travel and new experiences are what’s important to me. I’ve never bought a new TV. I’ve never bought a new couch.
But I’ve been to some amazing places and meet some truly amazing people. So I buy less stuff and travel more.
For my Mum it was about giving us kids everything we need, for my best friend it’s all about fitness, for another it’s starting her business and for another friend it’s all about horses.
Once you know why money is important to you the “sacrificing” of the latest TV, gadget, couch or outfit becomes easier. It’s not about saying NO, it’s about saying YES … but. Yes I can buy a new TV but it will mean I can’t go on holiday to Cuba until next year. Yes I can buy a new couch but it means I can’t attend the fitness seminar with my mates.
Every day, you dictate how you spend your limited financial resources. You can choose to eat out every day, or you can choose to replace your wardrobe. Whatever you want to do with your money, you can do it.
But as my Nan always told me here’s the catch: You can’t do everything.
And therein lies the problem. Too many of us want our pay check to cover everything we want, the instant they want something (TV, couch, new shoes) we buy it and if the money’s not there, we turn to Mr or Mrs Credit Card and this is where the problems really begin.
This is another reason why I started MoneyBrilliant. I want my friends, family, colleagues and you knowing where you are spending your limited resources. So when you do spend, it’s on things or experiences that really matter to you.
You can’t have it all. So plan and make it happen
We know you can’t have it all (but you can plan and make it happen). So you need to ask yourself “Why is money important to me” and “Will buying X.Y or Z help me get there”. If it doesn’t, put down the credit card and dream about Cuba, horses, your business, and your kids. Whatever it is that will make you truly happy. Because waiting and spending on what really matters to you will make you far happier than any new TV or couch.
What to understand where you’re spending your money now? Consider signing up for a free MoneyBrilliant account where you can track your money and see what’s safe to spend.
Peter is the Founder of MoneyBrilliant, stupidly optimistic and believes he can help change the world by empowering everyone through better money management.