Pay Yourself: Why taking that trip is important to your financial freedom
By As young investors, everybody wants to advise us on what to do with our money. Bloggers, social media personalities, and TV talking heads claim their method will get us on the path to wealth and early retirement. We see it so much that some of us start feeling guilty, like every dime that doesn’t go toward our retirement, investment portfolio, or mortgage is a dime that’s setting us back from our goal of financial freedom.
Let me be clear: The most important thing we can do early in life is to build a solid foundation. We always talk about how our most powerful investment tool is time. Contributing to those retirement accounts, creating an emergency fund, and investing early will pay dividends down the road.
But when I talk to other folks our age, most of us want more than just a foundation. We want a good work-life balance that allows time for recreation, fun, and personal development. And I think it’s essential to consider that financial freedom doesn’t just mean hitting your retirement number, whatever that is. It’s also about the freedom to do things that bring us enjoyment today.
I recently took my annual golf trip with 21 college friends in Charleston, South Carolina. Every year, we pick a new destination and spend the weekend catching up and playing golf at different courses. Golf is a hobby that keeps me active and gives me a personal challenge, and this trip allows me time to maintain friendships with guys scattered all around the country.
Because those things are important to me, I make an effort to save for those trips every year. In essence, I “pay myself.” I set aside money in my budget each month based on how much I think I’ll need so that I don’t go down the rabbit hole of spending months paying off a credit card. The easiest way is to open a savings account and have it automatically deposit those funds each month.
Now this isn’t something I want to make my top priority, like keeping my emergency fund full and maxing out my retirement contributions. But as long as my foundation is set, I can use what’s left over to do what I want to do.
For you, it might look different. Some people love relaxing on a beach, hiking in the mountains, visiting new cities overseas, or spending time with family. Everybody has different hobbies that come with very different expenses. There’s no one-size-fits-all answer.
All our financial advisors at FFP believe you should be able to do what you want with your money. We’re here to help you build that foundation, make wise decisions, and set yourself up for financial freedom. And we want you to be able to take that summer vacation. Contact us today so that we can go through your goals together.
Article by Dillon Harper, Wealth Advisor at Family Financial Partners — a financial services firm in Lexington, Kentucky.