I’m all for tracking net worth. It is one of my monthly routines I look forward to. Much like budgeting, keeping tabs on your net worth will give you a good indication of the direction your finances are heading.
Unfortunately, sometimes people become too consumed with watching their net worth figure grow. They would rather keep stacking the total instead of taking a nice family vacation or upgrading something in their life to provide improvement. Are you guilty of this?
Money Is A Tool, Not a Concept
Yes, I have been guilty of this too. Especially early on in our marriage as we were hell bent on putting away as much money as we could by living in a tiny, affordable apartment. Most of everything after taxes and bills went towards establishing an emergency fund and to our fledgling retirement accounts at the time.
I started to fall in love with the concept of having money but not using it as a tool to improve happiness.
When you are young, a person can get away with this. These are good years to work a lot of hours and be disciplined to the grind. Energy is high and while wisdom may be low, you have to pay your dues.
As time flies by and I am zooming through my 30’s, I can appreciate the moments to live a little and open the wallet up once in awhile. I believe there are times to enjoy the fruits of our labor.
Utilize Your Money
Every dollar from each paycheck earned is important. You need to utilize your money the best way you can in order to live the kind of lifestyle you want.
The goal shouldn’t be to be the richest person in the graveyard. Although leaving money to your heirs is important (and we definitely will do some of that) you have to draw the line somewhere and say enough is enough. And let’s be real, we all love our kids but they could blow money foolishly at casinos or develop other bad habits. Just because we mind our fiscal manners doesn’t mean the offspring will.
Those that have reached financial independence and retired early in life made this decision. They had their number in mind and when they reached it, it was time to call it quits. Although some do go on to pursue other interests that they can monetize. Just because a person retires from the W-2 doesn’t mean you have to stop making money if you so choose.
Ways To Utilize Your Money
When I mention utilizing money, I don’t mean spending foolishly just for the fun of it. After all, money is just a tool. A tool that we can use to hopefully better our family’s lives and make them more enjoyable. We can do this in a number of ways.
1. Monetarily- Buying real estate, stocks, bonds etc to make more money.
2. Family Fun- Vacations, sporting events, theme parks.
3. Consumer Goods- Upgraded family vehicle, Central Air Conditioning, New Computer (for blogging or educational purposes of course).
Since we have such a limited time on Earth, we all must determine when our stopping point will be. When we end the accumulation and stop total emphasis on the net worth score card.
As for me, I’m determined to try to utilize my money as best as I can while still saving and investing. Spending money on things that will provide lasting memories. Not spending money on foolish things that provide no utility or improve our lives in any way.
And when the moment comes, we will get out of the rat race without worrying about building our net worth to a crazy high number to brag about. Our time is more valuable than anything.