3 things to keep in mind when making financial decisions, so you can enjoy life more, now and later.
We discussed financial decisions on The BIGG Success Show today. Here’s a summary of that discussion.
George Krueger (aka “The Professor”) was quoted in an excellent article on U.S. News and World Report about opportunity costs, by Geoff Williams.
What does “opportunity cost” mean? You can think about it this way: When you purchase one item, it means you can’t purchase another one. In other words – because you only have a set amount of money at a certain point in time – there are tradeoffs. You can’t have everything. You have to make choices. You have to prioritize.
Want to hear what Mary-Lynn’s tradeoff is? Listen to the show by clicking the PLAY button above.
Here are three things to keep in mind when making financial decisions:
Just about everything involves a financial decision
Because money is involved in some way in almost every part of our lives, it should come as no surprise that just about everything involves a financial decision.
For example, you make a decision every day you go to work: Are you going to (1) go out for lunch, or (2) brown bag it? Obviously, your answer affects your money.
Want another example? Listen to the show. Simply click the PLAY button above.
Financial decisions also have emotional costs
If you only consider the financial costs, life can be pretty boring. Let’s bring back our lunch example. Sitting at your desk, looking at your computer screen, while you eat lunch can be pretty dull – especially if your job requires you to sit at your desk, and look at your computer, for most of the day.
Sure, it saves money. But there may be an emotional cost of bringing lunch.
There are social benefits to going out to lunch with your colleagues. It’s a great opportunity to build relationships. These relationships may help you advance in your career.
How can a promotion and a raise come back to bite you? Listen to the show to see. Just click the PLAY button above.
Think about the long-term costs
George shared this example in the article. Say you go out for dinner and drinks with your friends every Friday. Your bill totals $100. Over a year, that’s $5,200. Over 10 years, its $52,000.
So are you making a $100 decision or a $52,000 decision? You have to decide.
How can spend less money while still enjoying time with your friends? Take a listen to the show by clicking the PLAY button above.
Don’t make financial decisions in a vacuum. Consider all the costs and benefits – financial and emotional, short- and long-term, so you can enjoy life more – now and later.
See your costs in a new light
See how your personal finances stack up to your neighbors. Pinpoint opportunities to have more money now and later. Check out our Financial Freedom Tool.
Here’s to your BIGG success!
George “The Professor” & Mary-Lynn
Co-Founders, BIGG Success
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