News from Sherer Financial Coaching

Recently, I came across an interesting statistic. MSN Money had done a survey to see what items people card trick considered a necessity vs. a luxury. Surprisingly, 49% of the people surveyed said that having a cell phone was a necessity. Wow! Almost half! Conversely, only 28% of the people surveyed said that they were meeting their retirement goals. More people thought it necessary to have a cell phone than save for retirement. Their money priorities were.. shall we say .. different?

Not that many years ago we managed to do just fine without some of these fantastic devices we now say we can't do without. Just a few years ago, only the wealthy (or those who appeared wealthy) carried mobile phones, or car phones as they were called then. They were as big as bricks and sure didn't sing and dance like they do today. Life seemed to go on normally for those of us without the ability to instantly reach out and touch someone. These days, it is tough to convince some folks that they may be better off without the $100 or so each month for the convenience. Umm.. yes, unless your job demands it (and hopefully pays for it) it is a convenience.

Then of course there's the internet. OK.. Now that one I'm almost convinced I can't live without. Having the entire world available to me with a few clicks and keystrokes, all while I'm in my bathrobe and fuzzy slippers. How did the human race survive before the internet? And yet, it did.

Years ago, when my wife and I were first married, we were assigned base housing on Travis Air Force Base in Northern Caifornia. Base housing was prety bare-bones. The Air Force supplied government-grade linoleum tile. (ugh) If you wanted carpeting, you had to put it in yourself. Forunately for us, we just happened to have enough money to buy some carpeting for our pad. (no pun intended) Then it happened, while strolling through the mall, we wandered into a pet store. They had one of the cutest poodles you ever did see, and best of all, he was on sale! His reduced price put his cost just about even with carpeting for our government-issued house. Now we had a choice to make, cute puppy, or carpeting. Being rational folks, we chose the puppy. I was reminded of our choice every time I had to walk across that cold, hard floor in the morning. My wife and I agreed the choice was worthwhile.

We all have choices to make and priorities to assign to those items on our budget. How we make those choices and assign those priorites determines how successful we'll be with our financial well being. We may rationalize a need for something for something that's really more of a want, or we may just have our priorities out of order. Picking poodles over carpeting may not have been such a bad thing by itself, after all, we could tolerate the tile. However, my wife and I made other financial decisions in a similar manner and overall, we weren't doing very well financially. It wasn't until we had matured and learned to prioritize a bit better, (OK.. a lot better) that we found we were able to get ourselves out of debt, build a better financial situation and give ourselves most of what we wanted.

Cell phones and other nonessential expenses aren't wrong or evil, but if you have a few of these expenses in your budget and you're not making the progress you'd like towards your goals, perhaps it's time to take a look at your priorities. What are you money priorities?

Make a list of the three goals that are most important to you, then look at the priorities you assign to items on your budget. Are your money priorities taking you toward or away from you goals?