Tuesday, October 10, 2017
9 Wise Money Moves You Should Make
Finding true value is tough. We all have a perceived notion of what true value is. When it comes to consumerism there is rarely anything worth your hard earned money. Personally, I have a strong disdain for spending my money on junk. I despise malls, I don’t shop online and cringe when I have to buy anything that isn’t essential for survival. There are however some things that you should be spending your money on. If you have been following me you know about the mainstays; insurance, investments, paying down debt, saving for a rainy day and of course, the good old mortgage. Other things are not so straightforward. In this post, I will show you other items you SHOULD be spending your money on that are not so agreed upon. I am all for saving money, but sometimes you have to spend money to save it in the long run.
1) Renter’s Insurance
I have renter’s insurance and would recommend it to anyone. It’s not because I enjoy paying the premium. It is definitely not because I think I will ever use it. It is because if my apartment were to get flooded, or burnt down it would cost a fortune replacing all my stuff. My sofa, bed, computers, TV’s, dining room table, curtains, appliances, food, and everything else all add up. My clothes alone would run at least 10K if I had to replace them all. Suits ain’t cheap! Think of everything you have and if it were gone tomorrow. Covering that cost is worth the dollar a day spent to insure it.
2) Not Skimping
I have always been of the mantra; I will spend more for quality. Having grown up with used everything, I saw the constant hassle it was to fix old items. Things like appliances, electronics, and furniture are usually much better when purchased new. That doesn’t mean you should break the bank when buying these items. What it means is look for the deals, but also spend a bit extra for something that will last longer. Repairing old faulty equipment adds up over time, plus most used items cannot be covered via warranty.
3) Vacations
As I get older I am starting to see the value in vacations. Being able to rest and recharge is very valuable and can lead to increased productivity at work and at home. That being said, I don’t think taking too many vacations is worthwhile as it can lead to overspending and eventually debt. You have to remember that when you are not working you aren’t making money and you are also spending it. That is a double whammy, so make your time off worthwhile and earn those well-deserved vacation days.
The Importance of Taking Vacations – Psychology Today
4) Guaranteed Investments
Anything that has a guarantee attached to it is worthwhile in my books. While I am not a complete fan of guaranteed investment certificates (GIC’s), I do believe they have great value. The peace of mind in knowing that your money is safe and that you will make a certain amount of money off of it is worthwhile. I do not think you should have all your money in Fixed Income, but a good amount never hurt anyone. It is often part of a well-balanced financial plan.
Life Insurance As an Asset Class – Budget Boss
5) Saving for Holidays
I remember that Christmas used to be an amazing gift bonanza where I made out like a king. These days it seems more like a money grab that has me questioning the validity of the whole holiday. If you know you overspend on Christmas, try to cut back. Also, make sure you are saving for it throughout the year. Putting 20 bucks a week into a jar means you will have over $1000 to spend at Christmas. Don’t be broke in January and February because you were lazy all year. Or you can always celebrate Festivus with me and all the other smart people.
6) Pre-Paying Bills
I remember when I was younger, and I came across $1200 once. I felt like the richest man in the world! What I decided to do with that money is what set me along the path of where I am today, the Budget Boss. I decided to pre-pay my rent for 2 extra months in advance. This meant that I had 3 free month’s rent, including the month I paid when I signed my lease. I then paid my rent as scheduled until I decided to move. What that allowed me to do was save for 3 months to come up with first and last month’s rent, plus the security deposit for my new place. I didn’t have to scramble, I just kept plugging away. Getting ahead of bills you know will be there is never a bad thing. It might just save you during tough times in your life. It works for the farmer’s; it should work for you too.
7) A New Mattress
Have you ever slept on a bad mattress? Up until the age of 25, I was sleeping on the same bed I had when I was 10. It had springs jabbing into me and felt like sleeping on a pile of rocks. I finally decided to splurge for a quality mattress and have had it since. It has made sleep much better for me and I am now much more alert and energetic during the day. You spend 1/3 of your life sleeping, so make sure it’s a good night’s sleep. It is proven that those who sleep better, are healthier in general, so it could save you money in the long run.
11 Reasons why a Good Night’s Sleep is so Important – Psychology Today
8) Education
I absolutely hated going to school. It was like jail in my mind. As I have gotten older, and hopefully a little wiser, I see the value of being well educated. Part of my yearly budget is for education as continued growth is essential to continually upgrading one’s wealth. Look at it this way: If you stopped going to school 25 years ago, how far behind do you think you are? Since 1992 we have seen the emergence of the web-based economy, the prevalence of smartphones, automation, climate economics, and a variety of jobs that never existed before. How valuable are the skills you used to have? If you spend money on educating yourself, it will come back in spades.
9) Your Health
Being healthy is much more expensive than being unhealthy. Things like gym memberships, personal trainers, healthy food, and yoga classes can cost you much more than the dollar menu at McDonald’s. Despite this, being healthy saves you money in the long run as health care costs can be absurd. Doctor’s visits, time off work, specialty devices as well as pain and suffering can be extremely expensive. An investment in your health is an investment in your wealth. You might even find your passion and work forever which could lead to you being very wealthy.
I firmly believe that you have to spend money to make money. I also firmly believe that a penny saved is a penny earned. While those two statements might seem in conflict with each other, I assure you they are not. The point is to spend your money wisely as to save you money in the long run. If owning a beater car is costing you $1500 a year in maintenance, you would have been better buying a newer car for 15K and hope to get 10 years out of it by taking care of it. Having only one pair of nice jeans throughout my childhood taught me that lesson.
Thanks for reading today’s post on spending and don’t forget to tune in tomorrow when we discuss actual wastes of your money. Shoot me a message at joe@budgetboss.ca if you would like help making your own spending plan. Have a great day!
“Knowledge is of no value unless you put it into practice.” – Anton Chekhov
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