A couple of months ago Des from Half-Banked had a blog post about how to spend or save your tax refund for maximum happiness. One of the points was to treat yourself; guilt-free. (Check her site out if you have not already!) Her point was if you are responsible with 90% of it you don’t have to feel guilty about spending 10% of it. It’s a great concept and it really works for people who are more likely to spend 90% and save 10%. The problem with that is that I can’t seem to put that into practice myself. So I was wondering if I should feel odd for saving/investing 100% and if I’m missing out on something.
As part of Scott’s change in jobs at the beginning of 2017 we needed to make a car purchase. Scott has had a company vehicle since 2009. A new car as well as the increase in insurance had not been part of our budget. Setting aside money every month for a replacement car for me was.
For the record I don’t buy new cars. I have a tendency to run the car until it doesn’t work anymore the math doesn’t work out for me. If I want to spend $300 a month on a car if I were to buy a new car for $35,000 I would have to drive that car for almost 10 years to make it worth my money. If I were to buy a 4-year old car for $15,000 I would only have to drive it for a little over 4 years to make it worth my money. Which is the difference between , making the car 8 years old vs 10. So much deprecation happens within the first few years of the car you can save some money buying used. I would rather someone else pay for the deprecation vs me.
Do you have a banking advisor? Have you ever been influenced to change your actions because of what they said? I have. And it sucked. This is going back a bit but to be honest this put me off of bank advisors. To this day I have a really hard time trusting anything that they say is legit. Did you know that 95% of Canadians who use bank advisors have confidence in their advisor? That is an insane high number. That’s like dictator approval rating high. Not at all saying that banking advisors are dictators however with all the frustrations that we see in the media about shady practices that number seems off to me.
Prioritize your money. To change your money habits all you have to do is understand what is urgent and important for you and then line align your actions up with that. That’s it. Often people make prioritizing out to be more difficult than it really is. Let me show you an example using my laundry situation and to explain the basics of urgent vs important.