People feel better about their finances. That’s what a recent Gallup poll says. Their bank accounts look fuller. Their retirement accounts look bigger. Their debt feels under control. Their monthly budget has money left over.
A funny thing happens when people feel better about their finances. They’re willing to spend more money then they were in the past. And they buy stuff they want, not need. The feel good nature around money makes it easier to scratch the constant itch to upgrade your lifestyle. Impulse purchases are now on the table.
Right around this time is when people get comfortable. Guess what happens when you get comfortable? Things slip. You feel better. You’re confident about the direction things are going.
You can cheat this one time because your bank account is fuller, your retirement account is back on track, you have extra money at the end of the month, and you really want that new – pair of shoes, gadget, clothes, or car – you’ve been eyeing for the past two months.
Now you have an excuse to cheat a second time. And a bad habit starts forming.
Before you rush off to keep up with the Joneses, now is the perfect time to double down on whatever got you here in the first place. There had to be some combination of saving more, paying down debt, price shopping, and spending controls (a budget) over the past few years. Imagine if you stepped up your game?
Last Call
- From Stream to Shining Stream – Aleph Blog
- Setting Expectations for Stock Returns – Morningstar
- The Small Cap Premium: Where is the Beef? – A. Damodaran
- On Value Investing: A Conversation with Joel Greenblatt (Video) – Wharten
- It’s A Chaotic World. Profit From It – Beyond Proxy
- Retiring? Why You Will Need Less Money Than You Think – Marketwatch
- Time warp: Warren Buffett on the Stock Market, Circa 1999 – C. Sizemore
- Wall Street Banks’ Mutual Funds Can Lag on Returns – Dealbook
- Mutual Funds’ Dark Side – Slate
