Posted by Valley Financial Group & Billy Wolfe Jr.
It's still fresh in our mind. That feeling of holiday shopping and finding the gift we know for sure that our son or daughter, niece or nephew, brother or sister will adore. But then several weeks or months go by, and the next time you see them your present that was so beloved at its unveiling has been pushed to the side in favor of the new. It seems like every time we buy anything, no matter how up to date, a new and improved version is out within weeks. According to Bloomberg’sBusinessweek, over 20%, or upwards of $2.3 trillion, of the American people's expenditures in 2015 were spent on items that are completely luxurious, meaning that everyone could live without them regardless of any specific special circumstances.
Most New Year Resolutions List consist of striving to avoid wasting our hard earned dollars on unnecessary items (be better savers). However, from 2009, after the initial shock of the 2008 recession, to the present day, the purchase of unneeded luxuries has surpassed necessities like gas and groceries in terms of economic growth for the first time in American history.
What do you splurge on each year?
· Is it eating out?
My splurging tends to be on Guinness & Starbucks. When you put the numbers to paper, the truth hurts.
Take a look at the USA TODAY article, “20 Ways Americans are Blowing the money” (https://www.google.com/amp/amp.usatoday.com/story/6826633/?client=safari ).
We understand you need to live your life, but just remember wasteful spending may be keeping you from paying for the retirement you want, your child’s education, or your daughter’s future wedding.
Here’s a strategy to help you increase your savings and decrease your spending:
Consider a “matching gift” to your savings/investment account.
For example, if you spend $100 month on Starbucks, match that with $100 a month into a savings/investment account.
On the other hand, you may not be thrilled that the $50 toy you bought has been replaced within weeks, but just remember that your unnecessary expenditure is the driving force for the growth of our nation's economy, and for that the market thanks you and you’re spending habits.
Here’s to a Happy and Healthy 2017 and to all of us being better savers!