Where Should I Spend My Money?
The next time you spend money consider these questions.
Do I absolutely need this?
What is my future plan?
Will this help me accomplish my plan?
How will this make me feel one week from now?
How can I use this money towards my plans?
Asking questions will make you think clearly about the bigger picture. We know when we are spending money on non essentials. It's hard to make tough decisions when that new outfit or night out with your friends is calling your name, which is why a list of questions will guide you into making better decisions.
1. Do I absolutely need this?
Absolute essentials include food, water, and shelter. Anything short of that is a "no"! Of course you can make a case for anything else in life, but when we start getting into the online shopping, streaming subscriptions, technology, jewelry, alcohol, etc. then the waters get a little murky.
Look at the things you already purchase in life and compare it to what you are considering right now. If they are too far apart then walk away. If they are more closely related compare the two. If you could only spend money on one of them which would you choose?
2. What is my future plan?
Thinking in terms of the future will make this easier. It will help your instant urges subside into acting on behalf of your future self.
You will get older, put yourself in the shoes of your older self knowing you made a wise decision right now.Think about what it will feel like to have your plans come true if you spend this money the way you know you should.
3. Will this help me accomplish my plan?
Probably the best question to ask when purchasing something. If you want to make your plans come true will this help me? You will know the answer to this question right away!
How you execute is not to think, just act. Not to think?....Really? Yes! Your mind will come up with a million different reasons to justify this poor decision you are about to make and the more you think about it the more likely you are to make the wrong choice for accomplishing your plans.
4. How will this make me feel one week from now?
This goes hand in hand with the thinking in the future concept. Will you feel the same way about this purchase in a week? Will you have this same excited feeling you do right now? This is creating the habit of wise money management for yourself by thinking in terms of the future rather than the present.
Put yourself in the state of mind one week from now. Will you feel great about this purchase? Will you feel indifferent? Will you feel bad about yourself that you chose instant gratification over the plans you want for your life?
5. How can I use this money towards my plans ?
Explore how this money can be used in order to accomplish your plans. This is the best question to ask now that you have addressed how you feel about this decision, what your plans are, and will this help you get to where you want to be.
You now put this money into your assets. These assets are things that make you money. They include your stock portfolio, rental properties, online business, side hustles, etc. You put this money into new ways that will make you money or existing ways that already make you money to grow into more.
One of the best practices to make great spending decisions is to ask yourself these five questions. Go through the list with yourself in your head and from there you will have clarity on the right course of action for you!