Hi there,
I think we all agree that the Saving versus Spending dilemma is rooted in the human instinct for financial security.
Why do we save money? To avoid pain, mostly.
People naturally want to save for their future and have a safety net in case of unexpected events, such as health emergencies or job loss.
This desire to save for emergencies and invest the rest for your future is responsible and prudent.
Why do we spend money? To seek pleasure, mostly. When people are physically and mentally exhausted, they often seek ways to re-energize and recover faster.
Spending money on comfort, self-care activities, vacations, or hobbies can provide immediate relief and contribute to our overall well-being.
When it comes to burnoutonomics (yes, I made up this term), focusing on the right question is very important.
Instead of asking “Should I save more or spend more to feel happy?” you can ask yourself: “How can I save better and spend better to feel happier?”
Top 6 Tips to Save Your Money Like Healthy High Performers
1. Track Your Money and Budget:
Create a detailed monthly budget that tracks all your sources of income and categorizes your expenses.
The act of budgeting not only promotes awareness of spending patterns but also empowers you to make more informed and better financial decisions.
2. Set Financial Goals:
Set specific, measurable, achievable, relevant, and time-bound (SMART) financial goals.
These goals act as a roadmap, providing direction and purpose to your financial endeavors.
3. Save First:
Set up automatic transfers from your checking account to your savings or investment accounts as soon as you receive your income.
This way, you save at least a little bit before spending.
Don’t eat the seeds, which if planted, could become your trees of wealth.
4. Put Aside an Emergency Fund:
Build an emergency fund for ’6 to 9 months’ worth of living expenses.
This fund acts as a financial safety net, protecting you from unexpected expenses or emergencies.
5. Manage Your Debt:
Prioritize paying off high-interest debts, such as credit card balances and personal loans.
6. Save Windfalls and Bonuses:
Whenever you receive unexpected money like tax refunds, work bonuses, or gifts, consider saving most of it instead of spoiling yourself.
Important: Always consider consulting with a certified financial advisor for personalized advice. It really doesn’t matter how much money you make. Financial advisors are not only for rich people. Most of the time, their first assessment meeting is FREE, so you can schedule a session and get free education. There is no harm in talking to them. I am NOT a financial advisor. The information here is NOT professional advice. This is just my opinion.
Top 5 Tips to Invest Your Money Like Healthy High Performers
1. Stay Informed:
Read regularly about financial markets and try to familiarize yourself with it.
Keep yourself informed about economic trends, market conditions, and changes in financial regulations.
2. Consider Long Term Goals:
Align your investment strategy with your long-term financial objectives.
Whether you’re saving for retirement, a home, or your children’s education, your investment strategy should reflect the time horizon and objectives of each goal.
3. Understand Your Risk Tolerance:
Assess your risk tolerance before making investment decisions.
Different investments come with varying levels of risk, and understanding how much risk you can comfortably handle is critical.
Align your portfolio with your risk tolerance to avoid unnecessary stress and potential panic during market fluctuations.
4. Diversify Your Investment Portfolio:
If you know you are not an expert in something and you do not have the superpower to see into the future, the smartest thing you can do is to spread your investments across different asset classes to mitigate risk.
Never invest in something you do not understand.
5. Monitor & Adjust:
Regularly review and adjust your investment portfolio based on personal financial goals and market conditions.
Periodically review and rebalance your portfolio to maintain the target asset allocation (i.e. ratio of assets in each market).
Market fluctuations may cause your portfolio to deviate from its initial allocation, and rebalancing helps realign your investments with your predetermined risk-return profile.
Important: Always consider consulting with a certified financial advisor for personalized advice. It really doesn’t matter how much money you make. Financial advisors are not only for rich people. Most of the time, their first assessment meeting is FREE, so you can schedule a session and get free education. There is no harm in talking to them. I am NOT a financial advisor. The information here is NOT professional advice. This is just my opinion.
Top 4 Tips to Spend Your Money Like Healthy High Performers
1. Spend more on Experiences Instead of Materials:
Professionals derive more happiness and satisfaction from experiential purchases than from material possessions.
Materials can be comforting and helpful.
But e-commerce websites rely on impulse purchases, and they’re good at making us buy things we don’t need.
So now, we are all left with a ton of things that we bought online, used only once or twice, and now collect dust in the corner of our home.
Why does it work?
(1) Our brains are wired to compare our possessions with what people around us have.
But we are less likely to socially compare our experiences with others.
So, when you spend money on an experience, there is less opportunity for your brain to make you feel less good about yourself.
(2) We are less likely to get used to experiences.
We all know someone who bought an expensive pool table or a massage chair that they stopped using after the first week.
When it comes to experiences like joining a workshop, each session provides an opportunity to meet someone new or learn something interesting.
(3) It’s more fun to talk about experiences in front of others.
When your close friend starts talking about the new shoes they just bought, it becomes boring after the first few minutes (unless you’re a shoe nerd and that’s your thing).
When you start talking about what you learned in a new workshop or the new friends you made online, that’s fun to hear, and your friends become curious about it.
Here is the Takeaway:
(1) Allocate a portion of your budget to experiences that align with your interests.
(2) Prioritize experiences and activities that involve social interactions.
(3) Identify experiences and activities that creates memories that will provide you with a more long-lasting source of positive memories.
2. Spend a little bit on Others Instead of All on Yourself:
You work hard for your money, and you have all the right in the world to spend it on yourself and your family.
When we talk about RHS and how we can get more “units of happiness per dollar,” I argue that spending 1% of your leftover money on strangers can bring you roughly 10 times more joy and happiness compared to when you spend that same amount of money on yourself.
When high performers allocate a portion of their budget to help others, they experience a sense of purpose and fulfillment.
The act of giving, whether big or small, triggers positive emotions and strengthens social connections.
Why does it work?
(1) The act of giving can lead to a “helper’s high” and the release of feel-good chemicals in the brain such as serotonin and oxytocin.
his can increase our health and life satisfaction.
(2) Generosity can boost our self-esteem and self-worth.
hen we see the positive impact of our actions on others, it can lead to a sense of pride and fulfillment.
(3) Helping others strengthens our social bonds and fosters a sense of belonging inside our brains.
sense of belonging and being a part of a community triggers feelings of empathy and satisfaction, which consequently makes us feel happier.
Here is the Takeaway:
(1) Allocate a portion of your budget to acts of kindness or charitable donations.
(2) Look for opportunities to give back to your community or support causes aligned with your values.
3. Treat Yourself in Small Increments Instead of Buying Something Extravagant:
High performers understand the importance of self-care, but they approach it with a nuanced perspective.
Instead of indulging in occasional extravagant purchases, they prioritize treating themselves in small, consistent increments.
Why does it work?
(1) Hedonic adaptation refers to our tendency to quickly adjust to positive or negative changes in life circumstances.
When we make large, one-time purchases, the initial surge of happiness tends to diminish over time as we start getting used to it.
After we recognize this phenomenon, we can see the value of opting for consistent, diverse smaller treats that provide sustained moments of joy.
(2) By choosing smaller treats, we can stay attuned to our spending habits and avoid impulsive or excessive expenditures.
By treating ourselves in smaller increments, we can foster a healthier relationship with money.
Self-care should not be seen as an occasional splurge but more as an ongoing practice integrated into our lifestyle.
Here is the Takeaway:
(1) Identify affordable and enjoyable self-care activities that can be integrated into your routine.
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4. Spend Your Money to Buy Back Time:
Time is a precious commodity. Spending money to buy time is a strategic investment.
Spending money on time-saving chores or activities can lead to a happier life.
Healthy high performers recognize that certain tasks, while necessary, can be time-consuming and may detract from more valuable activities.
This strategic use of financial resources not only enhances productivity but also contributes to reduced stress levels.
Why does it work?
(1) By outsourcing time-consuming tasks or investing in services that free up our schedule, we can gain the flexibility to focus on activities that align with our priorities.
A lot of times, we do not have the time to see our friends or family because we have to spend a couple of hours every week to home chores.
By outsourcing those chores, we can spend our time connecting with our circle of friends and family.
(2) Spending money to buy time promotes a healthier work-life balance.
High performers understand the importance of downtime and recognize that time saved on mundane tasks can be redirected toward activities that bring joy, relaxation, and personal fulfillment.
More balanced approach to work and life can prevent burnout and enable us to sustain our healthy high performance.
Here is the Takeaway:
(1) Identify tasks that can be outsourced or automated to save time.
(2) Allocate a portion of your budget for time-saving services that align with your priorities.
Want to get Your Personalized Wellness Score for FREE? Click here to complete this quiz and get your burnout and wellness score from 1 to 10 – for FREE.
Saving, spending, investing, and managing your money like healthy high performers involves a thoughtful and intentional approach.
By practicing the 6 + 5 + 4 tips mentioned above, you can have a healthier relationship with money, improve your health and wellness, feel happier, prevent burnout, and sustain healthy high performance.
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