Do You Need To Worry About Money? Not If You Do Four Things...

Financial stress is a terrible thing. I’m sure everyone reading this blog has stressed out about money at some point in their life. But the thing is, stressing about money doesn’t change the outcomes. Instead, it just ruins your day.So, am I suggesting that you should never worry about money? Not really. I believe that if you are doing all the right things then it will all work out well in the long run. And worrying about it in the interim won’t help. Taking all the rightactions and still worrying about money is a complete waste of emotional time and energy.Here is a list of things/actions that you might need to worry about.Spend without any consideration for the futureDo you think before you spend? Or do you consistently adopt the attitude that “you only live once and could be dead tomorrow” so I may as well buy it?Everything in life is about moderation. I know it sounds really boring, but it’s true. I believe that we shouldn’t continually deny ourselves the things we enjoy. Investing is a journey and it should be enjoyed as much as possible. However, by the same token, we can’t always buy everything we want either. Sometimes we must make sacrifices and compromises. That is, live comfortably within our means.If you regularly deny yourself some of the things you desire, then you probably have nothing to worry about.Have no idea how much you spend on general living expensesDo you know how much you spend on general living expenses (i.e. tell me an actual amount)? I don’t mean ‘guess’ or ‘estimate’. Have you actually sat down and worked out what that number is?Probably 80% or more of prospective clients I meet cannot tell me (accurately) how much they spend on general living expenses (i.e. everything excluding mortgages, investments, school fees and holidays). I would like to make two important points about this:You cannot manage what you do not measure. How do you know if you are spending too much if you don’t know how much you are spending? How can you make any plans or commitments without a clear picture of your cash flow?Most people materially under-estimate how much they spend. The problem is that there are probably 30+ items in everyone’s budget that consist of several small transactions. These small expenses can add up. Often people are surprised by how much they spend.Just knowing how much you spend is usually enough. You will find that you naturally become more careful with your expenditure. And you can proactively eliminate the expenses that don’t give you any pleasure or you can do without.If you know how much you spend on general living expenses, then you probably have nothing to worry about.You don’t regularly contribute a percentage of income towards investment or debt reductionThe old adage of “pay yourself first” is very good advice. Or as Warren Buffett puts it, “Do not save what is left after spending. Spend what is left after saving.”Everyone must commit to an annual savings amount. An annual savings amount is a sum of money that you will contribute towards securing your financial future. This could be directed towards the accelerated repayment of debt, additional super contributions, servicing an investment loan and so on. Where you direct your annual savings amount might differ from year to year. But the most important thing is that you are regularly diverting a portion of your income towards activities that strengthen your financial position in the long run. The key here is consistency and discipline i.e. year after year you invest the same (or increasing) amount of income into your financial future.The benefit of committing to an annual savings plan is that you can then enjoy some guilt-free spending. That is, ifMy new book is available for pre-order now: Pre-ordering the book will help me get it into bookstores. So please do me a favour - please consider pre-ordering now - links and pre-order bonus are available here: https://prosolution.com.au/book-preorder-bonus Do you have a question for the podcast? Email us at [email protected]. If you're interested in working with our team and me, discover how we can work together here: https://prosolution.com.au/family-office-servicesIf this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://prosolution.com.au/stay-connected IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.