Smart spending is good

January 24, 2018 | Colleen O’ Connell-Campbell


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The SPEND, SAVE, SHARE Series -- Smart spending is good

Empowering clients to SPEND, SAVE and SHARE their money with confidence is the foundation of my daily work. It informs my decisions and interactions at every turn. There’s no ignoring the fact that money plays a key role in our lives, so why not make it a positive one.  The following blog is the first in a series of three that will spotlight these three equally important actions we can take with our money – SPEND, SAVE and SHARE.

Today we talk about SPENDING.

We all spend money. There’s no way around it. As we all know, spending money can be quite fun. But it can also be stressful and nerve-wracking. However, if you align where and how you spend with your personal goals and values, spending your money can be satisfying and relatively stress-free.

Buh-bye BUDGET

The positive approach to spending begins with throwing the word budget out the window. It’s still possible to be sensible without feeling restricted. I believe we should never feel limited when we’re faced with our spending choices. For this reason, I prefer the term spending plan vs. budget. Try and shift your mindset from that of scarcity and austerity to one represented by powerful choices.

A smart spending plan should take into account three key areas – essential needs, lifestyle needs and personal legacy.

Essential needs are just that --- things we can’t live without, such as shelter, food, utilities and health care. Our lifestyle needs are represented by our leisurely and consumer-oriented indulgences, and our legacy gives us the opportunity to ensure our loved ones aren’t left empty-handed when we depart this earth.

There’s a lot to be said for insurance

By putting a priority on our essential needs, we put our minds at ease about spending on less necessary items or experiences. In our younger years, disability insurance protects our greatest asset (the ability to earn an income).  Likewise, critical illness insurance can protect the savings and investments you have built up, and possibly provide income in the form of a lump sum, should you acquire a debilitating illness. And life insurance provides a much-needed safety net in the event that a loved one becomes an angel much earlier than expected. It can also be a useful tax-smart tool that allows you to leave a legacy for family, and charitable causes close to your heart.

Confidence comes from security

When you’ve taken the financial steps to ensure your family is protected, sheltered, fed and cared for, it becomes much easier to spend on your lifestyle needs. Notice, I say needs, not wants? That’s how strongly I feel about the importance of fun, and yes, even indulgence in our lives. Take that trip. Buy that pair of shoes. Go to a fancy restaurant. These are things that delight and enrich, and there’s no reason to deny yourself – as long as you’ve spent sensibly on your essential needs first, and your leisurely spending doesn’t jeopardize your everyday life, or your long-term savings plan.