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Are You Spending or Investing Your Hard Earned Money?

Are You Spending or Investing Your Hard Earned Money?

According to Australian Millionaire, Tim Gurner, our inclination towards frivolous items such as Avocado Toast are the reason why millenials can’t afford to put a down payment on a home.

As outlandish as this observation may sound, there is some truth to it. I seriously doubt that your decision to eat avocados is going to deter you from ever buying a home. But the act of irresponsible spending certainly will. The future is some far-off, unknown entity, and those of us who like to live in the now tend to indulge instead of invest. And while that instant gratification feels oh so good, eventually it will catch up with us. We need to start planning ahead.

Don’t squander away your hard earned money

We’ve been hearing it over and over since we were children. Our parents would give us a small allowance and tell us, “don’t spend it all in one place.” We may have laughed it off, but they were trying to teach us a very valuable lesson: we need to spend our money wisely.

We have reached an era where adults between the age of 24-35, what used to be ample home-buying age, are not able to afford a home of their own. A number of factors contribute to this issue: Credit standards have become stricter, making it more difficult for people with faulty or no credit at all to get a loan. Student loans are on the rise, burying millenials in crippling debt. Lifestyle changes- people are delaying getting married and having children, no longer prioritizing this as their ultimate goal. Many millenials are not receiving salaries that make them able to afford a home; many of them are living hand to mouth. Individuals in this age group are inclined to move to inner cities, where the act of renting is more prevalent than buying.

Ultimately, you don’t have to save up your money in order to buy a flat or home. If that’s just not your style, then do what makes you happy. But still be aware of your spending habits. Like I said, you work hard for your money. By all means treat yourself, but also consider the time you’ve put into earning that cash. It won’t be instant, but investing in yourself now will pay off big time in the future.

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Avoid these money spending mistakes:

1. Don’t be a sucker for a seemingly “good deal.”

Imagine you’re in the market for a new television set, and you’ve narrowed it down to two choices. Both televisions are priced at $500, but one of them has been marked down from $800. Immediately you conclude that the one that has been marked down would be a better value. This thought process is known as Anchoring Bias. This means that we make decisions based on one piece of information (the anchor). In this case, the discount is the anchor. You don’t know why the store chose to discount this item, and what issues it may have.

I’m sure we’ve all been guilty of naming ourselves, “bargain shopper,” never being able to pass up a good deal or sale. Many of us fall victim to this marketing tactic during the holiday season. Everything is on sale! And since we can’t resist a good sale, we spend money we normally wouldn’t, on items we normally wouldn’t buy. The end result? We just end up with stuff. Stuff we don’t need, and doesn’t bring us any fulfillment. If anything it makes us feel empty, because everything new eventually loses it’s charm.

2. Buying the things we WANT, instead of what we NEED

Do you ever find yourself sifting through your bottomless closet, filled with nearly identical shirts and shoes, only to realize you have “nothing to wear? Shop Therapy make us feel good. But only momentarily. How good will you feel about those items when you realize you can’t pay your bills?

It is exciting to get something new, and in the moment, we believe that this new item will help to shape us into the person we want to be (this jacket makes me look professional, more people will take me seriously). But the truth is, these items won’t change us. And we’re likely to lose interest in them just after a few days.To avoid this dilemma, really consider how much you need an item before you buy it. Don’t buy it on impulse, wait until the next day and consider if you really need it. Chances are you’ll forget about the item.

3. Spending money we don’t have

You just got your first credit card, and your soaring high on the possibilities. You can just buy things without worrying about your account balance. So you buy. You buy until you max out your credit card. So what do you do? You apply for another credit card to support your spending habits. Next thing you know, you’ve racked up $20k in debt with no way to pay it off. Your credit score plummets and your phone is ringing off the hook with debt collectors.

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The money isn’t tangible, so you don’t feel any real loss as you’re spending. Credit cards make spending way too easy, and debt that much easier to fall into. You can easily miscalculate how much you can afford; or worse, go into denial about how much you’re spending.

This is why so many adults are buried in debt. Since they don’t physically see the money leaving their bank accounts, they’ve disassociated the loss that comes with spending.

4. Buying instead of investing

Say that you’re an Instagram star, promoting a vegan lifestyle and the benefits it provides. You could spend $1000 on a new hand bag, OR, you could spend that money on a Nutrition Certification Course. Consider which is more beneficial to you: buying an expensive handbag that you’ve had your eye on, or investing in something that could potentially further your progress in life?

Sure, you’ll get that temporary high from buying that handbag, flaunt it around and be the envy of the town. But as soon as you’ve felt that satisfaction, that handbag no longer benefits you. It’s old news. However, if you spend it on the Nutrition Course, you could be well on your way to expert status on a subject that truly interests you. That is a benefit that will pay off for years to come; well after that ragged old handbag fell apart and became useless.

Never let the instant gratification trump you from investing something more rewardable.

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5. Trying to “buy” a relationship.

Your relationship has been on the rocks for a while, and you’re not really sure how to show them that you care. So you buy them tokens of your affection, showering them with gifts. This may temporarily fix the tension in the relationship, but the core issue is still there.

If your partner is only with you because of what you can offer them materialistically, then you should know it isn’t real. You shouldn’t have to buy your friends or romantic partners with extravagant items. If your partners love for you is determined by how much you spend on them, then they don’t love you for you. They love your money and what it can get them.

You are buying the relationship; an investment that will ultimately end in loss.

6. Opting not to invest in Health Care.

You take great care of your body. You eat right, work out daily, and take all of your vitamins. You feel great! There’s no need for health insurance, your health is just fine. One day on one of your runs through the park, you slip on some mud, fall awkwardly, and fracture your neck. An ambulance picks you up and takes you to the hospital. They perform x-rays, cat-scans, keep you overnight for observation, and provide you with painkillers to alleviate your suffering. When all is said and done, you now owe the hospital just shy of $30k. Your health was in great shape, but you just can’t predict these things. If you had health insurance, you wouldn’t have to worry about these costs on top of your injury. But now you do.

Millenials may feel that they don’t need to waste their money on Health insurance, because they’re still young and still have plenty of energy to spare. Health isn’t the first priority, because time and age is still yet to take a toll on us. But before we know it, our bodies start to give out on us. We eventually will age, sending our energy levels and health on the decline.

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Now, health insurance or not, you need to seek medical attention. And without coverage, your payments will be astronomical. An issue you never would have dealt with if you just sucked it up and made the monthly payments. Maybe you don’t need it now. But someday you will.

Invest in yourself and the future, and the payout will be well worth the sacrifice

When you really break it down and consider what is important, you realize you don’t actually need very much. What do you actually need? Your health, food (if that includes avocado toast so be it), water and shelter (clothing optional, but for the purpose of social norms I suppose we’ll include that as well).

Featured photo credit: Mashable via google.com

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Brian Lee

Chief of Product Management at Lifehack

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Last Updated on November 13, 2018

Do You Want to Know the Secret to Living a Fulfilling Life?

Do You Want to Know the Secret to Living a Fulfilling Life?

Don’t we all want to live a full, happy and satisfied life? For some of us, it need not be a long life as long as it’s been a fulfilling life of achievements, happiness and no regrets. But, how many of us actually go on to experience that entirely? It sometimes sounds more like a pipe dream–a fantasy rather than reality.

And then you’ll also get comments from some, saying that this ‘fulfilling life’ is only possible if you’re so rich that you don’t have to care about working, paying the bills or providing for your family. While there is some truth to that, I’m happy to say that financial freedom isn’t the only answer to living a fulfilling life.

Living a Fulfilling Life is Within Reach

Anyone can pursue a life of fullness, and it all starts with the willingness to learn. How many years has it been since you last attended a class in school? If you’re well into your adult years as a working professional, chances are it’s been a while. Do you remember the times where you had to wake up for early morning lectures? Or the times where you were rushing through a paper or project? And, of course there were the endless exams that you had to cram for.

As a young college student, I remember looking forward to the time when I would finally be done with school! No more homework, no more grades to worry about, no more stress! The learning was finally done and I could enter the working world.

Not so much!

Now that I’ve finally entered the working world, there are moments where I do wish to be a student again; it seemed less stressful then!

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There is simply so much out there that I still need to learn and experience. Yet I find myself pressed for time. With family commitments, my business and my own social life to juggle, I’ve had to keep on finding for new ways to learn and absorb new information efficiently. Over the years, I’ve found that by learning new skills and knowledge, I was able to find answers and solutions to my problems, which allowed me to achieve a greater sense of fulfillment.

Learning Never Ends

The truth is, learning never ends. Generally speaking, it is true that a formal education and the resulting qualifications are important in securing good jobs; jobs that allow you to excel, earn more and perhaps become more successful in our chosen career. But going to school is only one type of learning. All throughout your life, you’re learning in many ways. All these experiences shape and grow you into the person that you are today.

There are many opportunities to further your knowledge and develop the skills you need throughout life. Knowledge can be acquired and skill-sets can be developed anywhere. However, lifelong learning is about creating and maintaining a positive attitude to learning both for personal and professional development.

Many people overlook the fact that learning can take place anywhere and in many forms. Most would tend to think of learning as the years spent in a learning institute, which occurs mostly in their younger days. And once you go out into the working world, your ‘learning’ ends.

This is not how it has to be–in fact, lifelong learning is a gift that keeps on giving.

The Importance of Lifelong Learning

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Why is it important to become a lifelong learner?

A lifelong learner is motivated to learn and develop because they want to; it is a deliberate and voluntary act. Lifelong learning can enhance our understanding of the world around us, provide us with more and better opportunities, and improve our quality of life.

You’ll Remain Relevant in the Workplace

With advancements in society today, the human life expectancy continues to increase, which means more people are also retiring at a later age. So no matter what stage of life you’re in, being a lifelong learner brings its own rewards. It means we can get more personal satisfaction from our lives and jobs as we understand more about who we are and what we do.

This can lead to better results and a more rewarding working day in turn. Whether it’s for advancing your career, a personal interest or wanting to pursue new dreams, learning automatically pushes you forward towards progress and enhances your wellbeing.

You’ll Increase Your Earning Potential

From a financial point of view, a more highly skilled and knowledgeable worker is an asset to any company. This also leads to faster promotion with associated salary increases.

Someone who can offer more expertise will be of more value not just to employers but also to customers. Expertise is also, often, a key quality of an effective leader.

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And since you’ll constantly be accumulating knowledge, you’ll have an edge on those who don’t value lifelong learning and can’t bring as much to the table. Your extra knowledge will translate into transferable skills, which means you’ll always be primed to blow the competition out of the water.

Learning Gives You Options

Of course, one of the most rewarding reasons for continuous learning, is that it gives you options! Successfully changing career path in mid-life and spending time informally developing expertise is more common than ever, especially during rapidly changing market conditions.

Whatever your age, it’s never too late to start fresh in life. When you start educating yourself and exposing yourself to new knowledge and information, you widen your opportunities. This will allow you to do more than what you may currently be doing, or give you a way out if you’re not happy or fulfilled with where you’re at now.

Our economy is shifting increasingly towards short-term and part-time contracts with more flexible work-patterns. We have to adapt to changes going on in the work-world, make more of ourselves by stepping out of our comfort zones, and break the false ideas about our potential and how we believe life is going.

Gain More with Cornerstone Skills

You may be well into your career, but feel like somehow, something is still missing. Or maybe you’re not entirely happy with where you’re at in your career path and feel it’s time to reflect and perhaps do something new. Or you might be thinking of retiring soon, and thinking about next steps after retirement.

The learning never needs to stop!

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This can be your chance to go after a dream or interest that you’ve always had (but never had the opportunity, or time, to pursue). This could finally be the time for you to create the change that you know you should have made ages ago.

Why not take the first step to learn about 7 important Cornerstone Skills, which will help take your life to the next stage?

Whatever situation you’re in, having these 7 Cornerstone Skills will no doubt equip you to tackle the challenges of life much more efficiently. Don’t let age, your limitations or a comfort zone stop you from seeking greater rewards and self-improvement.

Transformation and change is in your hands–you have the power to make big things happen, and we can help teach you the skills. Don’t let life pass you by! It’s time to pursue a fulfilling and happy life.

Featured photo credit: Artem Bali via unsplash.com

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