Tag Archives: investing

How My Money Perspective Has Changed From My 20s to My 30s – What Would I Do Differently? (If Anything)

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As I reflect about my life and my relationship with money, I would definitely say that my approach to spending, saving, and investing has radically changed over the years. Am I just becoming older and wiser or does the current state of the economy have any impact on my views on money? It can be a combination of things but I do believe that with life experience comes more knowledge. I have always had a passion for building wealth and that is something that has not changed since my 20s but my perspective is definitely different now and there are many ways in which I view money differently than I did a decade ago.

Having Money In My Bank Account Means More Than Spending It – I have always been a rather good money saver but over the years, I have become an even more aggressive saver. Why? As I have aged, it is just more satisfying to have a bigger bank account than to spend money on material goods or going out. I am much more willing to sacrifice my desires and wants now than I was able to in my youth. It comes more natural for me to say no to unnecessary purchases and to just save my money instead. For me personally, it just feels good to have a lot of money stored away in a bank account than to spend it.

Spending Money on Clothes Doesn’t Excite Me Anymore – I have always had a love for fashion and wearing stylish and flattering clothing. That would also mean having the nicest shoes and handbags to go with my outfits. Fast forward to the present moment and I now do not care about clothing like I used to. Over the years, I have accumulated a wonderful wardrobe of classics and staple pieces that still fit and look great year after year. This is why there really is no need to go out and constantly buy new clothes unless it is an item that is worn out and in need of a replacement. I also want to point out a valuable life lesson: No one really cares what you wear more than yourself. So there really is no need to overspend on clothing or feel the need to impress anyone because no one really cares about the clothing you wear. That is not to say that you should totally neglect your self image but to consciously make an effort to be less vain because at the end of the day–no one cares what you wear!

I am Obsessed With My Retirement Savings – When you are in your 20s, you do not really think about retirement enough unless you are taught the importance of compound interest and investing as early as you can. Fortunately, my mother had me open an IRA account at the age of 18 years old. While I was making contributions to my IRA as much as I could at the time (which wasn’t too much), my biggest regret is not making a conscious effort to max out my IRA contribution every single year. When I turned 30 years old, I made the conscious effort to start doing that and have really seen the increase over the years which is very encouraging. This motivates me to keep investing into my retirement and watching it grow over time.

My Time Is More Valuable Than Money – Despite how much I prioritize working and making money, as I have gotten older–I have tried to have more of a balance between my work life and personal life. In other words, I cherish and value having quality time as opposed to working nonstop. Sometimes you have to take the time to say no to work and actually enjoy living your life. I would rather just work less and make more as opposed to feeling like I need to work constantly. In the past, I would push myself to work as much as I can, even if that meant less free time to do the things that I loved. Although I still would consider myself a hard worker, I have toned down the intensity and have made having free time more of a priority over work.

Booking a Vacation Is Worth Every Penny – I have been an avid traveler since my mid to late 20s when I started to make a high enough income to allocate money towards one of my biggest passions in life–international travel. To this day, I still believe that travel is money well spent and something that I would never regret spending because the memories that are created are so worth it. While not everyone might have a love for travel, it is important to find something that you love and allow yourself to spend the money on your desired category of choice with zero regrets. I spent the money on travel then and will continue to spend my hard earned money on travel throughout the course of my lifetime. It can be an expensive hobby but it is one that I will always justify as an essential expense.

Lifestyle Inflation – What It Is and Can It Be Avoided?

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It is hard to understand how someone with a high income could be living paycheck to paycheck but it is more common in today’s society than ever before. While there is no denying that high levels of inflation can be a culprit, there is also a phenomenon known as lifestyle inflation which is making it even harder for people to save money. An example of lifestyle inflation could be when a person gets a work bonus or a new job with an increased salary, then this person feels more justified to buy luxury goods or spend more money than ever before. While it is good to treat yourself and spend your hard earned money, it is still really important to prioritize investing and saving as much money as you can because you not only need it for your future but you also might need it for an unexpected emergency.

In your youth, it is very easy to fall into this lifestyle inflation trap because maybe you want to own a fancy car or dress in designer clothing. If you can afford it right now, you might be thinking: Why not? Again, there is nothing wrong with treating yourself but this cannot be an ongoing habit or this is going to lead to a lack of savings and potential debt. The right mindset to have is asking yourself, how do I build my net worth? If you place your focus on building wealth over time, then it will become easier for you to resist overspending on things that you truly do not need. As you get older, it will probably become a more conscious decision to save for retirement or to find investment opportunities rather than overspending. 

The best way to avoid lifestyle inflation is to first shift your mindset as I mentioned previously. For me personally, my mind is more focused on seeing more money in my savings and investment accounts than in my closet because I am a practical person with an understanding that excessive material goods really is not a necessity nor is it really making my life that much better in the long run. Whereas in my youth, I cared very much about having new and stylish clothing including designer labels. Once you have made a mindset change, then the next step is to develop the right habits to support your beliefs. In this case, that would mean to allocate your money towards necessities only and to commit to your financial goals. It can take time to develop the right habits but as long as you start implementing them, then your habits eventually become much more automatic.