The truth is: there are three obstacles to overcome if you want to grow your net worth and avoid the trap of debt. The issue? Most people are unaware that these obstacles even exist.
Before we get into the obstacles, a little reminder about net worth:
Net worth = what you own – what you owe
It’s like your financial report card, showing how your financial situation is evolving. Remember, net worth is based on finance, not personhood. We can’t assign a number to your personhood. You are priceless.
Increasing your net worth isn’t a walk in the park. But there are a few golden nuggets that, once learned, will totally change the way you think about spending your money. Here’s the first one.
OBSTACLE #1: The Golden Arrow of Consumption
You’ve had a long day at work, you come home, and what’s the first thing you do?
Reach for your phone? Same. But guess what’s waiting for you on that screen?
Yup, ads. Everywhere. They’re strategically designed to make you feel like you need to buy something to feel better. And guess what?
We fall for it. We swipe, tap, and before we know it, shell out hard-earned cash for stuff we didn’t know we wanted five minutes ago.
Truthfully, this cycle keeps us trapped. We end up needing to work more to pay for the things that we just bought.
We get stuck in a cycle because there’s this golden arrow.
We often think that making purchases will make us happier and feel better, but they rarely do. We work more, get overtired, and the cycle continues. This leaves us spending almost as much, if not more, than we earn.
When we live this way, we can NEVER get ahead or increase net worth.
If this happens to you, it’s not your fault. The system is stacked against you. But now that you are conscious of your place in the cycle, you can start breaking out of it.
HOW TO AVOID OBSTACLE #1: Golden Arrow of Consumption
- When you get home, do something that brings you joy without feeding into the consumption frenzy. Cook a meal, take a walk, call a friend – anything that doesn’t involve ads.
- Before you hit that “Buy Now” button, ask yourself why you really want that thing. Is it filling a void or solving a problem? More often than not, you’ll find there are better ways to address those needs.
- Always check the return policy before splurging. If you don’t use it within two weeks, RETURN IT! Your future self will thank you for it. Replacing $20 per week of impulse purchases with saving and investing can make a huge dent in your net worth. $6,227 over five years!
- Automate your savings – put money into a SEPARATE ACCOUNT when you get paid, so you can’t spend it! Trick yourself. For extra points, try budgeting with the 50/30/20 or Zero-Based Budget strategy.
Obstacle #2 runs RAMPANT in Westchester County. Look out for my next article, where I will teach you how to avoid it.
You got this, mama. Say it with me:
I am in control of my financial future.
