Stop making me cry on a Monday
I grew up in Suffern, NY, right over the NY border from where my office is and I live in Ramsey, NJ. The zip code is 10901, which, if written a different way 10/9/01 also happens to be a date that changed who I am as a person.
In 2001 a little short of a month after the tragic 9/11 terrorist attacks, my small town was rocked when a young high school junior named Emily was killed in a drunk driving accident. I knew her well, all of Suffern knew her well, because Emily was the type of person you gravitated towards. She was a wonderful soul who had an impact on all of the people who were lucky enough to know her. Her father’s speech at her funeral, that was attended by hundreds of students, will be a memory I won’t ever forget.
Two weeks ago, a few months short of 20 years since Emily’s passing, a drunk driving accident took the life of a Suffern High School Student, who was described by many as a wonderful soul, just like Emily. I don’t know the student this time but it brought back the memories of Emily and her father’s speech.
So, what on earth does any of this have to do with financial planning and the stock market? Well, nothing to do with the stock market, but a lot to do with financial planning. Often times I am speaking to people about long term goals, and aggressively saving money. What I try to do though is always give people perspective that saving money is super important, but buying your son a new baseball bat is just as important. Hiring a sitter and taking a date night out is just as important, so is taking the grandkids on vacation for a week every year.
We all know WHY we’re saving money, but no one can answer a simple question that I always ask. “What are you going to spend your money on?” Sometimes I will get a joking answer of a yacht, or health insurance and I always chuckle but I get these answers because most of us have been taught to save, and feel some level of guilt when we spend.
What is the money for?
Just like food, having a healthy relationship with money makes financial success just a biproduct of that relationship. Feeling a desire to save, and a sense of joy as you see yourself get closer to your goals is extremely important and is what most financial planners will focus on. If the feeling of accomplishment can be harnessed, they feel like success is more likely. Tough to argue with that.
What if we continued to harness that feeling of accomplishment, but also take away the guilt of spending money?
The worst advice a financial advisor can give someone is to stop buying coffee and make it at home. Denying ourselves pleasure from things like Starbucks in the name of frugality and saving money is going to make you resent money all together. It will become a barrier between you and what you want because you will feel guilty spending it.
Building your financial plan is just as much about your behavior and relationship with money as it is about discussing your long-term goals.
I like making coffee at home, so I don’t buy Starbucks, but I do go to a ton of Yankee games with my children. When my wife and I sat down a few years ago to do our yearly budget I told her I wanted to buy a quarter or half season ticket package to the Yankees. We do all the other things correctly, and have worked very hard on not feeling guilty spending money on what brings us joy.
I brought both my children to Yankee games this weekend and after the tragic news of two weeks ago I watched them get enveloped in the magic of the field and game. I came home fuller than I have ever felt and not for a single second did I think about the cost of those tickets.
Financial success is not just saving the money but spending it on what brings us joy. A lot of financial plans are missing that simple piece that is the glue of the entire plan. Spending the money on what brings us joy!
So how does this impact all of you?
- When creating a plan, focus on your goals, and on what brings you joy.
- Financial Planning isn’t just about saving money, it’s about spending money without feeling guilty.
Stock market calendar this week:
Wednesday May 5th:
ADP Employment Report @ 8:15AM
Thursday May 6th:
Initial and continuing Jobless Claims @ 8:30AM
Friday May 7th:
Nonfarm Payrolls and Unemployement Rate @ 8:30AM
Most anticipated earnings for this week