Part 2 (1/2)

What to Spend Discretionary Money On

Discretionary spending is spending you have choices about You don't have e or the electric bill But you do have choices about a significant portion of your annual spending It's the coffee and doughnut you buy each reens fees for golf, or the extra purse in that color you didn't have

What to Spend Discretionary Money On, 1-2-3

1 Things you care about

2 Experiences

3 Things that rise in value

1 Things You Care About

Funda on things you don't care about so you can spend that ht seeht ask

Not really

When is the last time you shopped for new home phone service or insurance? Do you really care which co as they provide high-quality service? Those two examples alone could be worth hundreds of dollars a year That'syou need or want

Think about work lunches Many people would prefer to eat the delicious leftover o out to eat They truly don't care about eating out for lunch Paying for that restaurant or cafeteria lunch would be et around to packing that meatloaf sandwich for work, lunch money trickled out of their lives

That waste is replicated over and over again, dollar by dollar, day after day Soon we're a walking, talking sieve ofhas an opportunity cost Opportunity cost is what you can't buy because you bought soo on the Caribbean vacation because you refuse to bring lunch to work It's a trade-off It doesn't matter how much money you earn, there are always trade-offs and opportunity costs I would rather trade money spent on stuff I don't care about and, instead, spend it on stuff I need and want I bet you would, too A sister concept is to ical value froht seem like an overly touchy-feely idea But it's real, nonetheless

So a luxury wristwatch, for exaht make them feel a sense of accoet that extra feelinga brand closer to Rolex than Tiical boost from the brand of their wristwatch An expensive watch for them is money poorly spent

2 Experiences

Did you know you could buy happiness? It's true, if you believe a slew of recent acadeain, that people are happier when spending s

The thrill of buying evity of a greatfor happiness is including people Solo experiences, it seeenerate near as much joy

So spend discretionary etaways, concerts, board games for the family, and special dinners out (not routine ones)

Experiences appreciate, assets depreciate Save on the latter to get s That Rise in Value

This is a tough one, but many wealthy people swear by it It's wiser to spend your o up in value, rather than things that are sure to plu than consuest purchases for any household: a house and a car

Ho ter crisis, which saw ho on education or sharpening job skills that will lead to a higher salary Invest in your own business and buyworth more in the future than you spent on them That makes them worthy of consideration

Of course, you'll have to weed out spending et-rich-quick schemes, from the state lottery to pyramid schemes to no-money-down real estate

QUICK TIP

If so , pause a moment Think about it Why would they puta tape set or live presentation instead of doing that thing that ical, unless they're truly being charitable More likely, theybiga new car or truck is a lousy investment It is certain to lose a ton of value the moment you drive away from the car lot A new car loses about 30 percent of its value in the first year Most consuets toto a new leather jacket-all lose value quickly

QUICK TIP

When buying soine what you could sell it for at a garage sale the next day A 15 music CD becomes 75 cents An 80 cordless phone becomes 6 A 50 toaster oven becomes 5 That puts the purchase in perspective in a hurry

Of course, we all s that deteriorate in value But if you can shi+ft so, you'll be wealthier for it

Now that we're on the saet down to the practical advice

PART I