It can be difficult in an age of complicated money matters to determine where you should be spending your money. Every penny that you spend is an investment, just some you reap the benefits of straight away, some repay themselves many times over, and some bring a net loss. An example of the last one would be, say, a night out: it’s dead money. Think of yourself as a government, which is tasked with investing for the country. Sometimes they cut public spending in areas where they really should be spending – like education, for example. That’s smart debt, while military spending is dead or neutral debt, in most cases anyway. You want to have smart debt and investments.
The temptation to sink big portions of your money into a holiday is strong, but is unwise. Only if you can really afford it should you spend money on a holiday that lasts one or two weeks and consists of little beyond lying in the sun. You might think it’s a worthwhile refresher and will help keep you sane in your current job, but there are much more cost effective ways to feel refreshed. However, that doesn’t mean all money spent on going overseas is worthless, oh no. A loan from a direct lender, to be used to go on a life broadening trip, would be a worthy investment because you’ll be investing in yourself. The returns of a trip like that are unknown, whereas the returns of two weeks in the sun extend little beyond a sun tan.
Back to School: Hobby v Job
There’s always scope to go back to university or college to learn, and is always heartily recommended – but if it’s not going to progress your career, then it’s only wise if you can afford it comfortably and have the time to do so. If it’s for your job or a change of career, then it might be worthwhile at any stage. This is a good debt to assume, because it’ll pay itself back many times over. Before you buy your pens and notebooks and enrol, however, you should do a cost analysis of the decision. If you get a masters in your field, will it push into a higher wage band? Or is the chance of promotion too slim to make it worthwhile?
The Infrastructure of Your Life
Being set up in our personal lives is the best preparation for a successful life in our professional spheres. Having a car and a house and the other essentials of modern life will always be worth it – but it’s important to distinguish between the essentials and vanity. Having a modern car that shows you’re professional and take yourself seriously will be a good first impression that could bring success. Having a flashy car, well that’s all on you. Similarly, having a home near to your work and which is comfortable is logical – pushing beyond your budget to get a home in a location beyond your standing is illogical to your long term financial prosperity.