The beginning of the year is one of my favorite times of the year. It is a time for reflecting on the past year and thinking of goals for the next year.
As you are contemplating potential financial goals for the year, I thought I’d share some things I’ve learned when it comes to money. In personal finance, as in most areas of life, there are few absolutes… and it is hard (if not dangerous) to overuse the words always and never. That being said, there are three instances where I have found absolutes do exist within the personal finance realm.
- Organize your finances. Getting your finances organized can be a challenge for even the most ordered and well intentioned among us. Frequently when I am starting a new client relationship, a lot of time is spent on this seemingly mundane task. After things are more in order, I have NEVER had anyone tell me that they’d like to go back to unorganized finances!
- Save money. I have NEVER heard anyone say they wished that hadn’t saved so much money! In fact I often hear the opposite…. “I wish I had started saving earlier and saved more.” When I say this, people often say, well what about Bill Gates (or others who have amassed great fortunes)? While I do not know Mr. Gates personally, I have read about him and his wife and I venture to guess that they are enjoying their ability to be generous philanthropists and cause change in the world on a grand scale – so they are likely thankful for the money they saved.
- Spend your money on experiences. When you spend money, try to spend it on experiences. Academics would likely shutter at my simplified, butchering of the science around money and happiness… but it can be distilled down to the following: after your basic needs are meet, money does not make you happy. In order to spend your money to maximize your happiness, there are two ways to do so. 1. Help other and 2. Spend your money (when possible) on experiences. Charity is of course important, but when it comes to spending, when possible focus more on experiences and less on stuff. The idea is that memories associated with an experience improve over time while stuff just gets old and dirty (at least in my house). For example, this year for Christmas, my kids and I went on a ski trip instead of lots of presents. It was awesome… already the bad stuff (the cold and my achy knees) is fading and the fun stories of racing down the slopes (I was always dead last) are getting better and better! Experiences are ALWAYS the way to go. We certainly made a memory.
So the bottom-line as you consider financial goals for next year is to organize your finances, save money and when possible, spend it on experiences!