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Friday, December 9, 2011

Did someone say red??

Yes Peter I love my red shoes!
As you can see from the photo, I have quite the collection.

Which brings me to the topic du jour. The finer things in life….

A considerable amount of the financial planning we do in our lives involves sacrifice. We often go without in the short-term for the longer-term reward.

But sometimes we can get so caught up in the long-term sacrifice that we forget to “treat” ourselves every now and then. The problem is that this can be a little like crash dieting. If we completely deprive ourselves then we run the risk of becoming discouraged and never actually achieving our ultimate goal.

It’s ok to factor a few indulgences into your financial plan, in fact I absolutely recommend it. Sure, the bigger picture stuff is essential for our long-term financial security, but if we don’t treat ourselves from time to time along the way, it can all become rather oppressive.

You’ll recall from my budget tips, that I have a set weekly grocery budget. From this budget I allocate 10% to “discretionary” spending. You know - the fun stuff. For me, that includes little luxuries like cosmetics, getting my nails done, books, and of course shoes!

Those of you who know my partner Mick can just imagine his utter inability to fathom why I “need so many shoes.”

And I guess my message is that it’s not always about “need”. Sometimes it’s a simple case of indulging ourselves just a little, to keep us on track towards our major financial targets.

Now before you get too excited, bear in mind that I’m not advocating binge spending here. You’re not to go out on a shopping spree and tell all your friends that your Financial Planner told you to do it. Like everything else, it should form part of your formal budget. You’re welcome to use my 10% strategy, or you may have a different idea for incorporating it into your overall financial planning. However you do it, just make sure that you take the same care, and exercise the same control, as you would for all aspects of your finances.

At the end of the day money is about choice. And not all your choices have to be about the long-term or sacrifice. Make sure you allocate some of your savings for the “just coz” stuff.

Talk soon,