Are you using your financial resources wisely? Do all your spending decisions make sense? Is your relationship with money healthy? If not, your finances could become a problem for you.
Just as poor eating habits negatively affect physical fitness, bad financial behavior often leads to unhealthy results. Bad money management can be as lethal to your life as a toxic relationship.
If you recognize yourself in any of the following profiles, you may want to change your financial habits before your relationship with money leads to disaster:
1. She uses money to impress others. Cathy’s life goal is to impress others. She yearns to be one of the cool cats, like the Hollywood figures she follows. She tries hard to look like a star, so she spends more than $100 a month on her hair stylists, at least $70 each month on manicures and pedicures, and $45 monthly on her gym membership. To the tune of about $900 a season ($3,600 a year), she buys a whole new wardrobe . . . Winter, Spring, Summer and Fall. Another $2,000 each year goes for enhancements like make-up, body lotions, tanning services and visits to the spa. She lives in a stylish apartment with outrageous rent. She’s never had a bank account to save enough money for a down payment on a home. “My problem,” she says, “is the $75,000 debt I still owe for my year of college.”
2. He spends money with wild abandonment. Sam has no idea where his money goes. Nevertheless, it’s all gone within a few days of cashing his paycheck. He never looks for a bargain on anything he buys. “That’s a waste of time,” he says. He works hard and earns a good salary. However, he’s always broke and can barely pay monthly interest charges on his credit card bills. A financial advisor once told Sam to set up a budget, pay off his bills and stop putting all his expenses on credit cards. “Yeh, right,” he chuckled. “That wouldn’t be any fun.” Sam likes spontaneity much better than structure.
3. He amasses money for its own sake: As a child, Max learned the value of saving for the future. He started his first savings account at age 5 and invested half of his first paycheck at age 18. Wow! Good for Max! His problem, though, is that he can’t quit watching his money grow. He’s addicted. He seldom buys anything but bare necessities, ending up at age 80 with close to a million dollars, but not much else. By retirement time, he had denied himself everything but essentials. Now, all he can do is monitor his money. He hasn’t made any friends. “Doing things with other people takes money,” he says. His wife left him for a more interesting life, and his children tell him they can’t afford plane tickets to come visit him.
Put money in its place. It’s only a modern-day medium to support decent lives for ourselves and our families. Spend some on life’s necessities. Enjoy some of the fruits of your labor. Save some for the future.
Manage Your Money . . . financial facts for a brighter future provided by Advancd Asset Management LLC
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Ronald Van Surksum, CFP
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