Start Asking the $1,000 Questions

Start Asking the $1,000 Questions

April 24, 2023

In today’s world, books and the blogosphere alike are rife with recommendations that many financial perils could all be avoided by simply not making small purchases in our day to day lives. For example, if only we could skip the lattes at the coffee shop, stop eating out and not buy that new pair of shoes, we could solve many of our financial worries.

While overall stewardship is important and too much excess spending on anything is not good, I believe it is the bigger dollar decision that will contribute most to your wealth building journey, not the $4 latte. Plus, don’t many of those smaller, daily purchases add joy to our lives? Who wants to stop doing that?

I advocate you keep spending on some of those favorites you love, but also live in the space of something bigger. Thus, my desire is that you stop asking the $10 questions and start asking the $1,000 questions.

What are some of those $1,000 questions? Many of these are missed or given little attention until much later in our lives when many of the benefits may already have been taken off the table. While the scope of this small column will not cover many details, please see below some of these bigger money decisions that are often not given priority in our younger years.

Unconsciously Build Assets

Have you started an automatic savings plan for a cash emergency fund? Do that first, then move to investments. Start small, but by automatically having those amounts deducted from your paycheck, you will be on your way to unconsciously building assets.

Pay Off High Interest Debt

If you have high interest debt, have you set an aggressive auto payment schedule to pay those balances off? Start with the smallest balance first. Do this before adding any investment accounts or making any larger purchases.

Think, Budget & Stick To It

Can I afford this? Don’t buy that new, expensive car or a house you shouldn’t afford. These are two HUGE decisions that many of us can fall victim to today. Give meaningful thought to it, then set your budget and stick to it. Those extra funds saved add up to many thousands in the future.

Start Your 401k or 403b Immediately

Do I have a 401k/403b set up? Not only does this equal immediate tax savings, but many plans offer matching funds from your employer. That is free monthly and can quickly add up to thousands for your benefit.

As mentioned above, this is not an exhaustive list and is not meant to be. They key is to get started making some of these $1,000 decisions now. Maybe you can only start with building a small cash emergency fund for right now—that’s okay. Each step taken, while seemingly small at first, builds upon the other small decisions and in time that creates momentum. That momentum will continue to carry you forward as you move into and implement each step. Before long, you will be able to truly see and feel the difference. In the end, wealth creation is not just about money, it’s about creating the freedom to live a better life.

401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and if taken prior to age 59.5, may be subject to a 10% federal tax penalty. Matching contributions from your employer ma be subject to a vesting schedule. Please consult with your financial advisor for more information.

Any opinions are those of the author and not necessarily those of Raymond James. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or a loss regardless of strategy selected. Past performance is no guarantee of future results.