When we talk about money, most of the conversation revolves around how to make or keep more of it. We want to know how we can reduce our expenses so we can save more. Or we want to talk about how to negotiate for higher pay to earn more. Once we have that cash, we look at how to invest wisely so it can help grow a nest egg for the future.
What we don’t often talk about is how to spend that money to create the life you want. But knowing how to spend your money — or more accurately, use money as a tool — is a critical part of financial planning that’s often overlooked.
How Do You Want to Use Your Money?
You may not hear this often, but the fact is, it is okay to spend your money. Of course, there’s a right way and a wrong way to do this. The idea that you can actually use your money as a tool isn’t carte blanche to go crazy with your spending.
You still need to save each month, invest for the future, and make smart financial decisions to avoid mistakes like accumulating debt. But you don’t necessarily need to stash away every last dollar for a point way off in the distant future.
Using your money as a tool starts by understand what you want — and why. You need to get clear on your priorities and your goals. This may be a process for you. The answer isn’t clear for everyone right away, and that’s okay.
Take some time to think about what you want. What’s important to you? What do you want your life to look like? What are your values? Why are these things so important, or why do you want certain things in your life? What makes you happy?
Your goals don’t necessarily have to begin and end with “save for retirement.” Maybe you want to invest in real estate while also enjoying your investments by buying a rental property in an area you like to vacation. Or maybe you want to start a business that you can run virtually, so you can travel the world while you work.
These are awesome goals, and they’ll require that you use your money as a tool to achieve them.
Map Out an Actionable Plan
Once you have answers to these questions, you can start creating a plan that will get you from where you are now to where you want to be.
You need to understand how much money you’ll need to use and identify steps you need to take to do so in a way that’s both sustainable and reasonable. There’s a difference between using your money as a tool to create the life you want, and spending your money without a plan or understanding of where it’s going.
This is where talking with a financial planner can help you. You’ll get an objective, outside-looking-in perspective, and that can help you see options and solutions that you didn’t even know about before. A financial advisor will have the knowledge and experience of how to make all this work; they can help show you how to use money as a tool today and still take care of your future financial needs like building your nest egg.
Build What You Want with the Right Tools
There’s a lot of emphasis on saving enough for your future, and for good reason. There will likely come a day when you want to sit back and not worry about working for an income anymore.
But there are also many, many days between now and then and a lot of life to live. You can save for your future and grow a nest egg to support you one day — and use your money as a tool right now. It’s all about finding a balance and creating a smart strategy to make it happen.