Working Wealthy – How Much is Enough

October 30, 2018

I was chatting with a friend over the weekend, and a common theme kept surfacing in our conversation. We covered a lot of ground—history, politics, finances and jobs to name a few.

The one idea that kept coming up in our wide-ranging conversation was knowing when enough is enough. I couldn’t help but notice that this concept really applies to all of us when it comes to considering our financial lives and the things we plan for with our clients.

Consider these three ideas and how you might view them.

How much you earn

Have you ever said to yourself, “I can’t wait for my next raise because that extra 10% is really going to change how we live our lives”? Maybe you haven’t, but many people do.

Does the pursuit of that extra 10% matter or would you be better off thinking about how to utilize the 100% you have today? Of course, you’d answer the latter. We would too.

We constantly talk with clients about the idea that earning more doesn’t necessarily equate to spending more or living differently. If anything, earning more simply allows you and/or your family to be more financially secure.

Rather than planning for what you could have, focus on what you have.

How much you save

We have clients at BDF that always pay themselves first. Sounds nice, right? It is  because it offers more and more autonomy, the more you tuck aside and prepare for the future.

There’s certainly a time at which you’ve saved enough though, and you may not need to be so diligent any more. We want to work with you to help figure out when you’ve saved enough so you can have total autonomy over your financial life.

The discipline and rigor of hitting your savings goals will pay off.

How much you need

This is my favorite because it’s the one that baffles us all—including me. The difference between what you need and what you want is nebulous.

It’s not a natural instinct to constantly evaluate whether you need or want something. But truly having a handle on your financial life means you’ll need to regularly ask yourself this question.

As you go through your week or month or year, consider how you spend your money. For example, does purchasing a specific automobile equate to a need or a want? If I’m a rancher, and I must move 12 hay bales every day, owning a heavy duty pick-up truck is probably pretty necessary.

Conversely, if I’m driving 12 miles to work each day and I simply need to get to work, is an F-150 the ideal vehicle? I’m not here to tell you the answer, but I think the example helps one imagine the thought process.

Evaluate where you spend your money and what your end goal is. You’ll start to get a feel for those things that are absolutely necessary and then there’s everything else.

This whole “how much is enough” conversation really comes back to your relationship with money.

Talk to your spouse, talk to your children or talk to your friends. Determine what is right for you and stick to that plan. You might find that enough is really a personal thing, but the first step in determining it is the right mindset.

Nick Cosky, CFP® is a Wealth Manager and Owner at BDF and is responsible for educating and introducing prospective clients that are considering hiring BDF for their wealth management needs. In previous roles, Nick has served as the head of BDF’s Financial Planning Committee and has participated on the Business Owner Team and Women’s Service Team. Nick is passionate about the planning that BDF does for its clients and enjoys every aspect of the client-advisor relationship. Nick graduated from Lawrence University in Appleton, Wisconsin, with a Bachelor of Arts degree in History and English. He is a CFP® professional and is a member of the Auxiliary Board at the Art Institute of Chicago.