Packing my clothes to go on summer holidays this year, I was thinking how many pairs of shorts I would bring with me. I had 10 different pairs of shorts and that’s not including sports shorts (I have about 10 pairs of them too 😳). I remember thinking to myself, “I think you have enough shorts”.
I have too much stuff but I am not alone. Why do you think Amazon do next day delivery for Prime customers? I am an occasional Prime customer. I don’t use them a huge amount but when I do, a month’s Prime membership is cheaper than the postage, so I sign up. I then go on a spending spree, buying all those things I don’t really need but they might be useful…just to avail of free postage!!
“How can they afford that?” is a question I get a lot of. People look on in envy at neighbours new car. As we don’t talk to each other about money, we don’t know how they can afford it or if they can’t really. They could have come into money, they could be wealthier than you or maybe they just spend everything they earn.
People then try to compete with their wealthier neighbours. And if your wealthier neighbour likes to spend, you will end up spiralling into debt to try to win a competition you can never win. You shouldn’t let other people’s consumption patterns influence yours.
…you aren’t saving and investing. While you are running up your Visa bill, buying Louis Vuitton bags, Air Jordans, a new iPhone and a new BMW, do you know what savers are doing? Buying stock in Visa, LVMH, Nike, Apple and BMW, which are all growing in value because of all the people who need the new shiny thing more than they need to save for their retirement!
We ask our financial planning clients to do an exercise in telling us how much their life costs. It takes a while to do, going through bank and credit card statements to see where their money went. But those who do it properly find it very beneficial and everyone comes back saying that they never realised how much money they spent on things they don’t need.
So next time you go on a spending spree, ask yourself if you really need it. Probably not. Save the money instead and have a future full of options.
13 November 2023