Financial Philosophies

What is your financial mantra? Do you believe that you should spend all your money now and enjoy life or should you sack away a portion of your income for a better future? Are you happy-go-lucky with your finances or are you more careful and reasonable with your spending?

Your financial path is directly influenced by your financial philosophies. How you see money and what it can do for you will influence how you spend, save, invest and borrow. For instance, if your financial philosophy would be to save every single dollar you earn, then you tend to stretch it as far as possible. In other words, you are penny pinching. You strip down your budget to the bare essentials and make no room for frivolous and luxurious expenses. With this philosophy, you try to maximize what each dollar can do for your and strive to minimize your expenses. However, too much penny pinching could expose you to low quality products and services that could end up costing you more in the long run.

Some people view money opposite to penny pinching. These people think that money can bring them happiness, so they tend to spend it liberally. As what Benjamin Franklin said, “money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.” People who belong to this group have no trouble spending their money for whatever that fancies them. The cost of those $5 daily lattes doesn’t bother them simply because they think they’ll just have to work hard to keep up with this lifestyle. Some people feel generous spending at present but they also tend to neglect their future financial security.

Then there are people who view money as a way to enjoy the moment while securing their future. It’s a good combination of the penny pincher and the liberal spender. If you have this kind of financial philosophy, you know what your financial priorities are and you spend on the things that truly matter to you. You also know where to cut back where it matters and strive to raise your income when required. You also don’t base your contentment to what other people have. Instead, you feel contented with what you have while striving to better your financial life through hard work.

Your financial life largely depends on your financial philosophies. It can be destructive to be at the extreme ends of the spectrum, so achieving a good balance is recommended. You will be confronted by situations where your financial philosophies are put into test. For instance, if you’re saving for an upcoming vacation, you will think it unwise to splurge a couple of dollars over expensive cinema tickets or restaurant tab. If you are saving for something huge, you might want to think twice about swiping your card for an expensive pair of shoes. If you’re tackling debt, you might want to try to increase your income on top of your regular job.

Being guided by a healthy set of financial philosophies will help set the stage towards achieving your financial goals. You will become more conscious with every decision you make and your actions will be inclined towards your goals. Oftentimes, making decisions is a bit easier because you know what you want to happen in your financial life.

Sometimes, a shift in financial perspective is all it takes to be on the right financial path. When you have the right and healthy philosophies in mind, your thoughts, actions and decisions all conspire towards reaching your goals.