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Why Chasing Money Is Worse Than Dogs Chasing Cars

Why Chasing Money Is Worse Than Dogs Chasing Cars


    We’ve all been there before and many of us are there right now.

    And where would that be? Probably not on vacation, enjoying an experience to remember or working to improve our health.

    We’re chasing money.

    Many cultures preach that once you have a good income stream or a certain amount of money built up then good things will follow. Things like going to great restaurants, taking exotic trips, creating a home immersed in entertainment options, and freedom from the fear you’ll have to take a hand out.

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    Fact: Money is the primary pursuit for most of us from the time we finish high school to the time we retire.

    Is this relentless chase the only way it can be or should be? You might not like my answer but you will get some actionable steps to improve your relationship with money.

    The Ugly Parallel

    Ever watched a cartoon or YouTube clip of a dog chasing a car? Even if they catch it they don’t exactly win a medal. Even worse, sometimes the dog gets permanently harmed in the process.

    A human parallel comes from reflecting on this quote by the Joker in the movie The Dark Knight.

    “Do I really look like a guy with a plan? You know what I am? I’m a dog chasing cars. I wouldn’t know what to do with one if I caught it!”

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    Do you see your relationship with money in this quote? Don’t feel bad if you do. I certainly used to but I’ve learned a mindset that helps combat the desire for the constant pursuit of money. Try some of these steps to alter your beliefs about it and help yourself grow into positive behavior and habit change.

    1. Say This Phrase Out Loud: “More money will make things better”. According to research, this is one of the most common beliefs among Americans (and I imagine people in other countries). Now say it a second time. Is it any more convincing? If you have a negative reaction to this experience the feelings when you say “happiness can be achieved with less or no money”. Which one of these statements resonates more?

    2. Realize Why You’re Often Stressed: Did you run out of time to exercise this week because of your work hours? Were you racing around so fast that you didn’t have time to eat well? And did you prioritize your commitment to making money higher than your family and friends? Saying yes to any of these questions generates stress in all of us. Not surprisingly, the American Psychological Association found that money is the biggest cause of stress by far. To prove this isn’t just an American problem an international Reader’s Digest poll asked people in 16 countries what their biggest cause of stress was. The runaway answer? Money.

    3. Ask Yourself What Role Money Plays in Life: So many people are too busy to assess the role of money in their life. I view money as the future ability to buy products and services that fulfill the needs of my family, friends, community, and charities I support. Just to give a couple of examples, two unfortunate paths in life I see people leading look like:

    Money –> vacation –> relaxation/adventure –> happiness

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    Money –> buying future free time –> satisfaction with life

    An alternate mindset is where money is at the end of the path instead of the start. After all, money is a by-product at the end of the path for people living out their core values (a.k.a. the happiest and healthiest).

    4. Define Why You Chase Money: Getting and having money is not a bad thing. It’s not inherently evil and the reality is we all need it. But try brief exercise though. Write down five good reasons why you pursue money. Pause for a few minutes and actually write them down. Do you like what you see? It the time spent and priority assigned to getting money more important than other things you value in life?

    My challenging you to find the “why” behind your relationship with money is for a sincere reason. This quote from the Goldberg and Lewis research team sums it up well.

    “[People] have become so indoctrinated with the idea that having money is important, that they no longer question why. They are unaware that perhaps what they are truly seeking is an increase in self-respect, or security, or freedom, or love, or power.”

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    Treat Yourself with Respect

    Your relationship with money could be an issue of balance but most likely it’s an issue of priorities or not knowing why you want it. Give yourself the respect you deserve by being more mindful about money than a dog is about chasing a car. I don’t want anyone getting hurt by a reckless pursuit and I hope you don’t either.

    Which of these steps works best for you? Are there other steps you’ve successfully used to stop chasing money and improve your relationship with it? Please share a comment below.

    (Photo credit: Man Chasing Falling Money via Shutterstock)

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    Last Updated on June 6, 2019

    The Average Retirement Savings and How to Save Wisely

    The Average Retirement Savings and How to Save Wisely

    Are you on track for retirement?

    If not, don’t worry, I’m not sure either. I save each month and hope for the best.

    Fortunately, I’m at an age where most people don’t save so I’m ahead of the curve.

    But, what if you aren’t in your 20s? What if you’re near retirement and are looking to gauge where you stand?

    If so, keep reading. Here’s how to prepare for retirement and save wisely during the process.

    What Does the Average American Have Saved for Retirement?

    Saving for retirement is tricky.

    Tell someone straight out of college to save $10k a year for retirement and it’ll be next to impossible.

    Make the same request to someone decades older and they’d be more likely to be able to save this amount. But, a 20-year old college student can be “financially ahead” of someone saving more than them. Why?

    Age matters in your financial journey. The younger you are, the more time you have to save and put compound interest to work. As you get older and have more saving power, you’d have less time to put compound interest to work.

    Here are the average savings Americans hold by age bracket:

    20’s – $16,000

    During this stage, most people are paying loans and moving up the corporate ladder. Your best bet during this stage is to focus on eliminating debt and increasing your income. Don’t focus only on getting a high-paying job neither.

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    Instead, focus on learning via Podcasts, reading books, and taking specialized courses. Doing this will make you more valuable and give you more career options.

    30’s – $45,000

    At this stage, you’ve hopefully escaped your entry-level salary and work at a career you enjoy. Your earning power has increased but you now have more obligations. For example, marriage, kids, and a mortgage.

    Set a plan to pay off all your debt and focus on eliminating unnecessary expenses. Leverage financial tools like Personal Capital to ensure you’re on track for retirement.

    40’s – $63,000

    This is the stage where you’re at the prime of your career. Top financial institutions recommend you have at least 2 to 4 times your salary saved up. If you’re falling behind, start maxing out your 401K and Roth IRA accounts.

    50’s – $115,000

    During your fifties, you’re close to retirement but still, have time to save. You may be helping your kids pay college tuition and other expenses. Since you’re at the peak of your earning power, max out all your retirement accounts.

    60’s – $172,000

    By this point, you should have about eight times your salary saved up. If not, you’ll depend primarily on social security benefits averaging $1400 per month. Max out all your retirement options as much as possible before retiring.

    Ways to Save Money on a Tight Budget

    The sad reality is that most Americans aren’t saving enough for retirement.

    Even high-earning power isn’t enough to secure one’s financial future. You need to have the discipline to save for retirement while time is in your favor. Don’t wait for you to have a high salary to save, start with having a small budget.

    First, get a clear picture of where you stand. Write down a list of “needs” and “wants.” For example, Netflix and Amazon Prime are “wants” and a “cell-phone” is a need.

    Use tools like Personal Capital to analyze your spending patterns. Personal Capital allows you to add all your financial data in one place–making it a powerful option to gauge where you stand.

    Once you know all your expenses, organize them from highest to lowest expense. When you can’t cut more expenses, call your service providers to negotiate a lower price. If you’re not good at negotiating, use services like Trimm to lower your monthly expenses.

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    How to Save Money Each Month

    By this point, you know the average amount of money you should have saved for retirement based on your age.

    But, breaking this down into monthly goals can be challenging. Here are some rule of thumbs to follow:

    Aim to contribute 10%–15% of your salary each paycheck. Review your progress each week.

    Why so often? The reality is that life gets in our way and you will have many financial setbacks. Your goal isn’t to be perfect but to get back on track instead.

    Reviewing your finances weekly lets you know where you stand with your retirement. This doesn’t have to be a long process either. All it takes is login in Personal Capital to view your net worth and check how much you have saved for retirement.

    Turn saving into a game and aim to save more each month. It will get challenging but you’ll get creative and find more ways to save.

    Top Money Saving Challenge Tips

    To prepare for your financial future and not be another statistic you need to be different.

    How?

    By adopting new habits that’ll help you become a saving machine. Here are some ways you can save more:

    Automatically Contribute Towards Retirement

    If you’re working for a company, you can automatically contribute towards your 401k. If you’re not currently contributing more than 10%, make this your goal. Contribute 1% more today and automatically increase this amount a year from now.

    Odds are that you’re not going to be negatively affected by contributing 1% more. Many times we spend our money on things we don’t need. Contributing more towards retirement is a great way to secure your financial future.

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    Use the Right Tools to Know Where You Stand

    Once you’re contributing more towards your retirement accounts, gauge your progress. Make use of finance tracking apps to help you view the big picture of your retirement.

    When I’d first signed up for the app Personal Capital, I didn’t know I had a negative net worth. Despite saving thousands of dollars, my debt brought my net worth to the negative. Knowing this motivated me to save more and spend less.

    Now, I have a positive net worth. But, it was because I was able to view the big picture using the app. Find out what your net worth is using a finance tracking app and you may surprise yourself.

    Bring in Experts to View Your Blind Spots

    If you have too little or too much money saved, you should consider hiring financial experts.

    Why?

    You may need someone to hold you accountable to help you reach your financial goals. Or, you may need help managing your money as effective as possible.

    Regardless of the reason, getting help may help improve your financial situation.

    Before you hire an expert, find out which areas you need help the most. For example, if you’re constantly overspending, find a debt counselor. If you’re struggling with choosing the best investment options, hire a financial advisor.

    Speed up Your Retirement Contribution

    After learning how to manage your money well, the next best thing is to earn a higher income.

    You’re capped at how much you can save but not much you can earn. Even if your employer isn’t giving you a promotion, you can still take charge of your financial future. How?

    By starting a side-business.

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    This will be something you’d work on after you’ve finished your day job. Once you start earning income from your side-business, you’ll be financially better off.

    The best part is the more work you put into your side-business,[1] the more potential it has to earn more money.

    So start a side-business in an area you’re familiar with. For example, if you enjoy writing, do freelance writing for small e-commerce businesses.

    Once you’re earning a higher income, you can contribute more towards your retirement. Don’t wait for the right opportunity to secure your financial future, create one.

    Reach Financial Freedom with Confidence

    What if you were able to retire tomorrow with no problem, all because you’d have enough money saved up and little to no debt left to pay off? How would you feel?

    My guess is that you’d feel happy and relieved.

    Most Americans are falling behind their retirement goals for many reasons. They’re not prepared, they carry bad money-habits and are thinking short-term.

    For you to retire successfully, you need to work backward and adopt better habits. Contribute more towards your 401K and focus on growing your income.

    If you do, you’ll save money and pay debt faster.

    Don’t beat yourself up if you’re behind your retirement goals. Take the first step today towards a brighter financial future. Isn’t retirement worth the hard work and sacrifice to be at peace?

    Featured photo credit: Huy Phan via unsplash.com

    Reference

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