Wise budgeting, spending and saving will help you build a retirement fund and meet your other financial goals, but what happens then? Finance blog Get Rich Slowly takes a look at what to do once you've feathered your financial nest.
Photo by pfala.
At 26 years old, entrepreneur Erica Douglass found herself in the enviable position of having a surplus of cash after selling her online business. Once she established a retirement fund and paid off debt, Douglass had to figure out what to do with the income that continued to roll in from her new business venture.
Rather than blow tons of cash on impulsive purchases just because she can, Douglass limits most spending to things that allow her to live a more fulfilled life. For instance, instead of buying a new car every year, Douglass employs a personal chef to make dishes that make living with an autoimmune illness easier.
It has been more than two years since I sold my business, and I am happier than I have ever been. I made different choices than most: We rent a house instead of owning (a savings of nearly $US4,000/month in our neighbourhood - more than our monthly rent payment!); we only have basic cable; we don't have a landline, credit card debt, car payments, or student loans.
I chose, instead of buying more Stuff, to live a more fulfilled life. For me, even more important than holding onto my money tightly was to learn to let it go - to give it to others in exchange for work well done, and to trust that they could do tasks well. It's one of the best decisions I've ever made.
Though most of us aren't able to afford the luxuries of a personal chef or full-time housekeeper, Douglass makes an interesting point. If you have a surplus of cash leftover after paying your bills and adding to your savings each month, maybe blowing it on a fancy dinner or a new electronic gadget isn't worth it in the long run. Instead, consider spending it on something that adds to your overall quality of life — like an accountant to do your taxes, or commercial productivity software that will help you more easily manage all your work tasks.
What would you do if you had a batch of extra cash to spend as you wanted? Would you hire a personal assistant to deal with all the chores you don't like, or blow it on something frivolous like good cognac or a box of truffles? Talk about it in the comments.