Not cheap, Fiscally concerned

I know I’m not rich. I know I can’t afford whatever I would spontaneously desire. There’s no excuse to not dream. I have ambitions, and there’s no desire to become rich if you don’t dream it. That being said, one has to question himself – what if you do become rich, what would you do with the money. Would you hug it every night and read it bedtime stories? Would you let it rot in a safe till the day you die? What’s the point of “getting rich” – if you hadn’t enjoyed your path to riches?

More importantly, and most relevantly – what if you never become rich. Or, what if you gained your riches only to lose it all in the market? It happens every day, and in every generation. People raise themselves to great possessions, only to lose it in a flash. What if your “riches” are seized by a socialist government? What if your tiny pot – which you thought has made you relatively wealthy, is made worthless by political events and inflation running out of control?

The point of the recent paragraph is to show that getting rich isn’t as important as knowing what would you like to do with your money if you had any. And since you might have none – knowing what you would do with, would motivate you to accumulate funds so you could spend it. Getting rich isn’t a goal – it’s a milestone, life goes on. Your goal should take into consideration what you want to do with the money.

“This one step - choosing a goal and sticking to it - changes everything.” Scott Reed

A responsible person does not spend whenever he “feels like it”. If you want something, the best thing to do is write it down. Then do some research; how much would it cost in different circumstances. Acknowledge you want to pay for it in cash – not in credit – and add it to a big list of things you would spend money on. Goals do not begin and end with “things” you want. You must look into the future and recognize things you would need. You would need to retire. You would need to support your family in an emergency. If you have kids you would like to be able to assist them – as needed. You might want to assist your kids with financing studies, or starting their financial life. Dream a new you. Dream a better future. Would you like a vacation home? Switching new or used cars every few years? Move to a different state? Starting a new career? Starting a business? There are many different things you might dream of. Write them down. If you are married, write them separately and then combine the list.

Prioritize. Which things are more important? Ask yourself which things you would need. Ask when. Then imagine yourself reaching them. If you plan well and execute a financial plan you could reach many of your goals. Do the research and see how much money would be needed and when. When you will be able to know how much money would be needed, you could construct your savings schedule.

I know my wife and I want to go on a vacation every year. We assume a certain amount and dedicate each month that cash to be spent later in the year. We identified a common goal, prioritized it, and made a financial plan to reach it. We identified several such goals – you will have your own – it is possible to reach a balance between your debts, income and savings to be able to use your money in a fun way. You might get rich, I might get rich, but before that milestone, I would have tried to meet my goals responsibly. The responsibility comes into play by spending money I have, and that I have accumulated for that goal – not obligating myself to paying it through debt and jeopardizing whatever future goals I might have.

Some goals will rely mostly on your actions – money might not be necessary or be an obstacle. Debt might be acceptable – if goals must be met before having the money at hand. Identifying how much things could cost would allow you to write a “life plan”, a schedule of big things you plan on achieving. Such plans are made with the intention of changing as life happens. The goals will help you stay focused and avoid reckless financial decisions at the wrong time.

Money will help you achieve your goals – only if you first dedicate the time to identify your goals.

Cheers!