Have Your Cake

Share This

When money is limited, we need to make choices. By spending money on something we want, we forego being able to spend the same money on something else. Wouldn’t it be great, though, to have your cake and eat it too! Believe it or not, there is a way.

From an early age, we are taught to think of goals as being mutually exclusive. If you spend your pocket money on lollies and ice creams, you won’t have enough to go to the movies. If you want a trip to Hawaii, you can’t have a new car. One technique for getting around mutual exclusivity is to be very clear on how much money your goals require. Saving for retirement is a commendable goal, but needs to be balanced with saving for shorter term goals so you can enjoy life. Use a retirement calculator  to estimate how much money you will need to save for your retirement. Any additional savings can be spent on other goals without feeling guilty.

Another way of getting around mutual exclusivity is to look at how you frame your goals. Instead of having a goal of going to Hawaii, reframe the goal in terms of what is really important to you about that goal. For example, you could reframe it as “a memorable holiday in a tropical paradise by the sea”. Your new car goal could be reframed as “upgrade my car to something more modern and reliable”. Where else could you have a memorable holiday in a tropical paradise by the sea, at a lesser cost than Hawaii? Can youupgrade your car without getting a new one? By being able to make small sacrifices on the quality or quantity of your goals, you open up possibilities of achieving more of them.

Related Articles

Investment
Liz Koh

Responsible Investing

There is a worldwide trend for investors to want to make a positive contribution to the world by investing in companies that are socially and environmentally responsible. If you are passionate about the effects of climate change, the scarcity of food and water, and social or environmental policies in general, then you will no doubt wish to ensure that the companies in which you invest are going about their business in a manner that is consistent with your views.

Read More »

Stay in the loop

Keep up to date with the latest developments from Enrich Retirement