Happy holidays and I hope you have a wonderful New Year. I will be off for the next 2 weeks enjoying some holiday cheer as well.
These are uncertain times and 2016 was a turbulent year. I do not expect life to get smoother or more predictable in 2017, but you can still be less stressed about your finances, no matter what. Remember, you have more control than you think. You are in charge of the biggest things that affect your financial life like how much you spend, how much you save, and how much you borrow.
Let me leave you with my 5 financial wishes for you in the New Year:
- I hope you do not mistake not owning a Maserati or shopping at Gucci for not overspending. One hundred trips to Target is the same for your finances as one trip to Tiffany's. Do not fool yourself.
- I hope you prioritize saving appropriately for retirement, especially over saving for college for your kids. If you are over 30 years old, you should be saving 15% of your pretax toward retirement to avoid eating cat food down the road. Now, more than ever, finances in retirement are unpredictable, save now.
- I hope you feel how empowering it is to know how much you can spend each month on fun and feel at peace when you spend it because you know you are spending within your means. Instead of feeling scarcity if you limit your fun money, i predict you will feel freer and less stressed. Try it and see!
- I hope you do not panic about market ups and downs because you are invested in index funds and know you do not have to touch that money for decades. You will be in retirement (hopefully) for 15-25 years nowadays. Do not try to beat the market and end up lining the pockets of some broker. Set it to index funds and forget it.
- I hope you understand that financial security is about making adult trade-offs when you cannot afford everything you want. Postpone one thing today in favor of another, instead of buying both (on credit perhaps). Take the long view of life and finances and you will be better off and less stressed out.
I wish you all the best in the new year and will be back with more blog posts in January. For now, I hope you enjoyed my financial wishes for you, especially #5, as I believe it is the key to financial security.