In my daily work as a financial advisor, I often reflect with clients on what they consider to be the “good old days.” Depending on the age of the clients, this could mean the ’50s, the ’60s, the ’70s or even the 1980s.
Regardless, one thing is certain from a financial standpoint — the “good old days” were generally simpler and less expensive times. With that in mind, it’s important as ever to live within your means.
In today’s world, there appears to be no shortage of celebration days, which invariably cost money for cards, presents, meals, etc. Also, everything under the sun has been monetized, from getting a shopping bag to watching television.
Another example of hidden spending in today’s world is the retail extravaganza of school shopping. In the old days, it was not met with all the celebration and fanfare that now regularly occur. More importantly, it did not entail the seemingly huge expense of outfitting our students with new shoes, backpacks, lunch boxes, calculators and ACT prep materials.
It’s not uncommon for the average family to spend several hundred dollars per child to get them ready to return to school, even though they just left a few short months earlier.
While school shopping may be behind us, another cautionary spending tale involves the many activities for kids – everything from after-school functions to specialized sports programs. These can add up quickly and can cost the average family several hundred to several thousand dollars per year.
To put it in perspective, there was a time when youth sports equipment was reused, for example, baseball bats were recycled from an Army or Navy surplus. The mentality in today’s world has greatly shifted, and although some parents have the means to afford these opportunities, many families could potentially have more money to put towards college savings.
To see where your family may fall on this spectrum, you may want to review your bank account from the previous few months and total up all the gifts, meals, school supplies, Netflix charges, sporting equipment and other 21st century charges you have incurred. You may find enough dollars to fund an IRA or two for this year!
With all the different expenses in today’s complex world, consider working with a financial advisor to develop comprehensive solutions that will help you live within your means and achieve your financial goals.
Drew Watson is a Certified Financial Planner and Private Wealth Advisor with Align Wealth Management, a private wealth advisory practice of Ameriprise Financial Services, Inc. He specializes in fee-based financial planning and asset management strategies and has been in practice for 23 years. You can contact him at firstname.lastname@example.org, or 270.684.8424.