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Financial Journey Evaluate Spending vs. Value Received "Experience is not what happens to you; it is what you do with what happens to you." * * * I had the opportunity to watch a movie recently that reminded me of the innocent way children interact and work through problems. When things were really getting off track, the kids used the expression that it was time for a “do over.” I really liked that idea and have thought about how this can be applied in our lives in many ways. It is a perfect way to change the tide of a conversation, discussion, or argument that has gone awry. Try asking in a completely innocent tone, “Can we have a ‘do over’?” The entire mood and direction of a negative situation can take a completely different course. Apply this same idea to your financial situations and decisions of the past. It *is* possible to have a “do over.” That is what experience is about – it is what we do with what happens to us that creates our experiences. We can study our decisions from the past and target correct to make better future decisions. I certainly haven’t made perfect decisions in the past. It is the accumulation of all of my experiences and decisions that has led me to the person I am today. I still continue to evaluate experiences and make different choices and target correct. Since I’ve made most of my financial mistakes with the “bigger” things in the past, my decisions today relate to smaller financial choices. But, small leaks sink big ships – so I still continue to pay attention. One of our favorite hobbies is movies. We take film classes, we collect movies, we watch them at home, tape them from cable, and enjoy going to the theater to see new movies. Recently we have evaluated the cost per movie going to the theater vs. the amount of enjoyment, pleasure, and value received from that experience. We have decided that, unless the film is something *very* special, we would receive more value by saving the money and waiting until it comes to cable. If we could have $10 (we go to matinees) laying on the table in front of us, or the experience of seeing the movie in the theater, most of the time we would choose the $10. That is a constructive way to look at your financial decisions to help avoid regret after spending the money. Imagine the money sitting in front of you and compare that to the item you want to purchase or the experience you would be paying for, and decide which you would rather have. This technique takes some thought – but any responsible financial planner has to give thought to spending decisions. This exercise is well worth the time. Spending money on something that is worth the “value received” is a responsible financial choice, assuming you have the discretionary money to spend. I also went through this exercise recently with the money I am spending on my gym membership. My monthly fee is $60 vs. $32 to join the YMCA. But the gym I attend is a five minute walk from my house and the “Y” is about a 20 minute drive. At our gym I have access to yoga classes, aerobic classes, an outdoor swimming pool, water aerobic classes, weight equipment, aerobic equipment, raquet ball courts, and more. The “Y” has much of this available, but it also very crowded. I carefully evaluated the decision to drop my membership and just get a lot of walking exercise in during the summer and use aerobic tapes at home. The gym is costing me $2 per day. I realized that I probably wouldn’t get to the “Y” regularly since I would have to drive a ways to go and the likelihood of actually going wasn’t very high, so I eliminated that choice. I then thought about all of the activities I would not have access to if I dropped my membership at the gym. My decision was to keep my membership, but it was a valuable exercise to go through because I realized everyday I don’t use the facilities I am paying $2 rent. If I use the facilities for 2 different activities I am only paying $1 per activity, and so on. The point is that I took the time to examine the experience and chose to target correct by making certain that I take full advantage of the facilities and the $2 per day that I am spending. Now I am not blindly paying $60 a month for membership, but have thought about what value I am really getting from that $60 and made a conscious choice to maximize the value. It also made me painfully aware of the money I am wasting when I don’t go to the gym. Begin evaluating your experiences and your expenditures more consciously. What is important is what you do with what happens to you. You won’t be able to avoid the “stuff” that happens in life, but you can make more conscious choices when you respond. You can target correct if you don’t like the way you are handling certain situations, and you can ensure that the “value received” for the money you are spending is definitely worth it to you. * * *
Copyright © 2003 by Karen Kuebler Want more money-saving tips? Get a FREE subscription to our monthly Ezine!
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