Accept That Your Relationship with Money Has Changed

Now that you’re on the journey of saving for that dream lifestyle, it’s time to accept that your relationship with money is different than it was when you were hustling to grow the business.

We’ve gone down the road of separating business spending from personal spending, but now it’s time to realize that the way you spend and save has changed quite a bit. When you’re OK with signing off on six-figure expense reports and investing in top-of-the-line technology for your company, it’s way too easy to forget the value of a dollar in your personal life.

In your younger years, you might think of a long, exotic vacation and a first-class flight as a wise investment in yourself. Now that you’re more mature, you realize that you can’t do that too often. If you want to enjoy your future, you need to show restraint when it comes to personal spending.

REALIZE THAT LUXURY DOESN’T HAVE ROI

There’s no ROI in fine dining, luxury cars and the finest champagne. If you truly want this, build the kind of personal balance sheet that will allow you to enjoy these luxuries in the future. Now is the time for saving and investing. You’re sacrificing short-term pleasures for the long-term luxury you want to enjoy.

It’s fun to imagine spending money like it’ll come forever, but unless you’re working and saving now, the faucet will run dry. That’s what the celebrities, athletes and entrepreneurs who live a gilded lifestyle on social media won’t ever tell you.

They don’t see the end coming, but you do.

You’re not spending your way back to square one, and even though it’s not the most glamorous position to take, it’s one that will lead to your long-term well being. By now, you’ve realized that the money you’re spending on your business and the money you’re saving for your future are both green, but used completely differently.

Some of the smartest entrepreneurs I know are frugal and efficient in their personal lives, yet have no problem making major investments in their business. They’re fine with driving a used Honda and living in a modest house, knowing that these choices will yield the lifestyle they want in the future.

I’m guessing you didn’t have this relationship with money when you first decided to go off on your own and launch a business. Money was money, and it all seemed the same. Now you know that a dollar for your business is vastly different than a dollar in your checking account.

DON’T FALL INTO THE TRAP

Even among entrepreneurs and business leaders with a sound financial plan in place can fall into bad habits.

Spending in large amounts on your business can easily lead you to believe that it’s OK to spend a little extra for that Mercedes or take the kids to Disney World a few more times this year. It’s a very seductive trap for even the most seasoned entrepreneur.

However, you need to accept that you’re saving for the future, not spending for the present. Every single financial decision you make with your business ties back to the overall goal of long-term success, even if it seems like a short-term benefit. Likewise, every single personal financial decision must tie back to your goal of a sufficiency, surplus or superfluent lifestyle.

I’m not saying you need to live a monk’s lifestyle, but know that every big-ticket purchase you make could bump you off your path. Before you whip out that credit card for a hefty purchase, you need to ask yourself if this is truly worth it. Will this help you obtain long-term wealth? Odds are, the answer to that question will always be, “no.”

Just because you’ve spent differently in the past (or worse, you’ve seen friends and colleagues go on expensive vacations) does not mean that you need to do the same. They are not on the same path to success that you are.

What can you do?  Set a savings rate, like 20% of gross income, that you know will allow you to build your future financial independence, then you can simple set your spending to be any lifestyle you want on the remainder.

Spending to keep up with the “Joneses” could set you back years, possibly even preventing you from that surplus or superfluent lifestyle you’re planning for. Keep this in mind before your next purchase.

Related Posts

  • PODCAST EPISODE 248: Is Your Mutual Fund Manager Doing This?

    WHAT WAS COVERED [Tweet “23% of actively managed mutual funds over a 20 year period beat the benchmark they set in comparison to an index. However most all of them had 2 to 3 incredible years and did not provide consistent returns. #YourBusinessYourWealth”] [Tweet “37% of US Stock funds switch which index they compare they’re benchmark too. #YourBusinessYourWealth”] [Tweet “Prospectus has always…

  • PODCAST EPISODE 227: Could a Car Accident Cost You Everything?

    WHAT WAS COVERED [Tweet “Insurance is a moat or a wall between events and your wealth. #YourBusinessYourWealth”] [Tweet “Our main idea with insurance is grounded in protecting from catastrophic loss and also pursuing full replacement of that asset. #YourBusinessYourWealth“] [Tweet “A personal umbrella insurance policy is just an insurance policy that picks up where your car and homeowner insurances leave off. #YourBusinessYourWealth“] LINKS…

  • PODCAST EPISODE 170: DOES THE PRESIDENTIAL ELECTION CYCLE HOLD THE SECRET TO BEATING THE MARKET?

    EPISODE SUMMARY In this episode of Your Business, Your Wealth, Paul and Cory discuss an article they recently discovered on the influence that the presidential election cycle has on the marketplace. Specifically, they break down the fallacy that the market can be timed or beaten by analyzing data based on market performance in election years. They take a look at…

  • PODCAST EPISODE 322 – 72-Hour Preparedness: Simple Steps for Real Emergencies

    In this episode, Paul steps out to the shop to talk emergency preparedness, not for the zombie apocalypse, but for real-life power outages and unexpected events. He covers the essential items every household should have on hand to stay safe, warm, and fed for at least 72 hours. From practical water storage solutions to backpacking gear that doubles as emergency…

  • PODCAST EPISODE 169: ARE YOU GROUNDING YOUR ASSESSMENTS WITH KARI GRANGER

    EPISODE SUMMARY In this episode of Your Business, Your Wealth, Paul and Cory welcome CEO and executive leadership coach, Kari Granger, to share her experience working with organizations to reinvent their leadership structures. Specifically, Kari expounds on the importance of grounding your assessments. Paul, Cory and Kari define what assessments are and provide personal and professional examples of assessments they’ve…

  • PODCAST EPISODE 210: Beyond Meat Stock Prices, Retirement Questions & Tax Traps

    EPISODE SUMMARY Topics Covered: WHAT WAS COVERED TWEETABLES [Tweet “Financial planning is kind of like gun safety, you should always know where your bullets are hitting, likewise you should always know where your money is hitting (for your future). #YourBusinessYourWealth”] [Tweet “Our purpose is to help all of you to achieve all of your aims in life so that we achieve…