Has this ever happened to you? You see a friend or family member make a purchase and your skin starts to crawl. “You spent that much on a new sofa?” “Didn’t you just take a vacation?” What seems sooo nonsensical to you makes perfect sense to them. Or maybe you’re on the other side of the conversation, and people question your decision making skills…
Does that mean you should never spend money on things that aren’t practical, or feel guilty when you do? Of course not. What you do with your money after the bills are paid is up to you. Decide what’s valuable to you, and then decide what steps you can take to make it happen.
Compare how you perceive the value of your expenses. Look at adjusting your spending in other areas of your budget so you can put that cash towards your value point. An easy way to do this is to ask, very simply, if one thing is more valuable than the other. Let’s pretend your value point is travel. You can assess your cable bill by thinking, “is my next destination or trip more valuable to me than cable?” If it is, you could consider other options, like Netflix or Hulu (in place of a full cable package). The savings might not get you all the way to your destination, but when paired with other savings areas you can make a good dent!
Consider keeping the money out of arms reach. Most people know you can create a savings account for just about anything, and from our experience having that money in a separate account really does help members save. You can even take it a step further and disconnect that account from Digital Banking. You would still be able to view the rest of your accounts in Digital Banking, but the savings for your point of value could only be accessed by visiting a branch. That would make it harder to do those, “just this one time,” transfers. If you’re worried about getting money into an account like this because you don’t often visit a branch, a regularly scheduled auto transfer is an easy remedy.
See if you can use the money you’ve already saved to reach your goals faster. Depending on the amount you have saved, you may be able to open a certificate or money market account that earns higher interest (at a credit union we call them dividends, but interest is the more widely used term) than a regular savings. So as you save more, your earn more. And as you earn more, you get closer to reaching that point of value. Oh, and you don’t have to put in any extra effort. You just keep saving like you’ve already been saving and get paid more to do it.
If getting up every morning and hitting Starbucks on your way to work is important to you, then do it. If building a race car is your dream, and that’s what motivates you to go to work every day, then go for it. It boils down to what you personally find valuable in life and how you can adjust your spending and savings habits to support it.
So the next time you hear someone say, “that’s a whole lot of money!” you can brush it off, because you know you worked hard and made choices to get that money together. So really, that’s a whole lot of value.