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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 September 17, 2018

How to Stop Multitasking and Become Way More Productive

How to Stop Multitasking and Become Way More Productive

Today we are expected to work in highly disruptive environments. We sit down at our desks, turn on our computer and immediately we are hit with hundreds of emails all vying for our attention.

Our phones are beeping and pinging with new alerts to messages, likes and comments and our colleagues are complaining about the latest company initiative is designed to get us to do more work and spend less time at home.

All these distractions result in us multitasking where our attention is switching between one crisis and the next.

Multitasking is a problem. But how to stop multitasking?

How bad really is multitasking?

It dilutes your focus and attention so even the easiest of tasks become much harder and take longer to complete.

Studies have shown that while you think you are multitasking, you are in fact task switching, which means your attention is switching between two or more pieces of work and that depletes the energy resources you have to do your work.

This is why, even though you may have done little to no physical activity, you arrive home at the end of the day feeling exhausted and not in the mood to do anything.

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We know it is not a good way to get quality work done, but the demands for out attention persist and rather than reduce, are likely to increase as the years go by.

So what to do about it?

Ways to stop multitasking and increase productivity

Now, forget about how to multitask!

Here are a few strategies on how to stop multitasking so you can get better quality and more work done in the time you have each working day:

1. Get enough rest

When you are tired, your brain has less strength to resist even the tiniest attention seeker. This is why when you find your mind wandering, it is a sign your brain is tired and time to take a break.

This does not just mean taking breaks throughout the day, it also means making sure you get enough sleep every day.

When you are well rested and take short regular breaks throughout the day your brain is fully refuelled and ready to focus in on the work that is important.

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2. Plan your day

When you don’t have a plan for the day, the day will create a plan for you. When you allow outside influences to take control of your day, it is very hard not to be dragged off in all directions.

When you have a plan for the day, when you arrive at work your brain knows exactly what it is you want to accomplish and will subconsciously have prepared itself for a sustained period of focused work.

Your resistance to distractions and other work will be high and you will focus much better on the work that needs doing.

3. Remove everything from your desk and screen except for the work you are doing

I learned this one a long time ago. In my previous work, I worked in a law office and I had case files to deal with. If I had more than one case file on my desk at any one time, I would find my eyes wandering over the other case files on my desk when I had something difficult to do.

I was looking for something easier. This meant often I was working on three or four cases at one time and that always led to mistakes and slower completion.

Now when I am working on something, I am in full-screen mode where all I can see is the work I am working on right now.

4. When at your desk, do work

We are creatures of habit. If we do our online shopping and news reading at our desks as well as our work, we will always have the temptation to be doing stuff that we should not be doing at that moment.

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Do your online shopping from another place—your home or from your phone when you are having a break—and only do your work when at your desk. This conditions your brain to focus in on your work and not other distractions.

5. Learn to say no

Whenever you hear the phrase “learn to say no,” it does not mean going about being rude to everyone. What it does mean is delay saying yes.

Most problems occur when we say “yes” immediately. We then have to spend an inordinate amount of energy thinking of ways to get ourselves out of the commitment we made.

By saying “let me think about it” or “can I let you know later” gives you time to evaluate the offer and allows you to get back to what you were doing quicker.

6. Turn off notifications on your computer

For most of us, we still use computers to do our work. When you have email alert pop-ups and other notifications turned on, they will distract you no matter how strong you feel.

Turn them off and schedule email reviewing for times between doing your focused work. Doing this will give you a lot of time back because you will be able to remain focused on the work in front of you.

7. Find a quiet place to do your most important work

Most workplaces have meeting rooms that are vacant. If you do have important work to get done, ask if you can use one of those rooms and do your work there.

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You can close the door, put on your headphones and just focus on what is important. This is a great way to remove all the other, non-important, tasks demanding your attention and just focus on one piece of work.

The bottom line

Focusing on one piece of work at a time can be hard but the benefits to the amount of work you get done are worth it. You will make fewer mistakes, you will get more done and will feel a lot less tired at the end of the day.

Make a list of the four or five things you want to get done the next day before you finish your work for the day and when you start the day, begin at the top of the list with the first item.

Don’t start anything else until you have finished the first one and then move on to the second one. This one trick will help you to become way more productive.

Featured photo credit: Unsplash via unsplash.com

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