When it comes to money and finances, many people shy away from the conversation. Though financial talk can be an intimidating topic, I wanted to share with you an awareness-based approach to costs that I have been practicing for a few years now.
Understanding something’s physical cost, the value it holds, and what the repercussions of not investing in something might be can flip the script on how you view financial decision-making in your life.
Investments vs. Expenses
Before we can assess whether a purchase or investment makes sense, we first need to understand the difference between investments and expenses.
Generally speaking, an expense costs you money; an investment is supposed to make you money. When viewed as an expense, spending money is perceived as a necessity and something you want to be as little as possible. When viewed as an investment, you exchange this time, money, or resources with a long-term future benefit in mind. An increase in value of some sort.
Making an expensive purchase can feel like a lot. But making an investment may change the way you look at costs, value, and financial decisions overall.
Lost Opportunities
The cost of not investing in something can create a lost opportunity much larger than that initial cost. Lost opportunity cost, simply put, is the cost of a missed opportunity. It is the opposite of the benefit that would have been gained had an action, not taken, been taken.
What is the real cost of something?
Conversely, what is the cost of not doing something?
Lost opportunity cost is common in banking and business, but it crosses over into many aspects of life. A $5 coffee and investing $5 into a bank account that earns interest offers different benefits while the initial “purchase” is the same. Lost opportunity is more than just a loss of “interest” being earned, but it’s the overall bigger picture. What are you losing by choosing not to invest in something?
When you flip your perspective from what something costs to what you gain from that something, your eyes may be opened to completely different views. I find that this approach helps me feel more comfortable and excited about certain opportunities and investments that might feel otherwise overwhelming.
Ways to Invest in Yourself
The Power of investing in yourself means you are putting time, energy, and/or money into your current life which will directly impact your future life. Instead of just focusing on material things, you look for opportunities and experiences that will raise your knowledge and increase your awareness and perspective on things.
Money isn’t the only factor in what we’re talking about either. There are many ways to invest in yourself, some of which don’t cost anything monetarily at all.
Ways to invest:
- Move your body and exercise regularly
- Set SMART goals - specific, measurable, attainable, relevant, time bound (good place to get started and map things out)
- Strengthen a skill (time + energy) or learn a new skill (could be time + energy + money) - specific to career, hobby, etc.
- Keep a journal
- Get organized and declutter (a cluttered environment is typically related to stress and anxiety)
- Read a book
- Attend a seminar/workshop
- Join a group or club
- Find a creative outlet
- Open a bank account
- Pay down debt
- Set up auto savings
Benefits of Investing in Yourself
It’s no surprise that investing in yourself offers many benefits. Whatever your goals and big picture needs, investing in yourself can make a positive impact.
Benefits of investing:
- Increases opportunities for living a life you love (if you don’t love your life, you’re missing a key piece)
- Earn more money in your career
- Gain more freedom in your choices
- Improve your health, both physically and mentally
- Feel better about yourself and increase your confidence
- Reduce stress and reduce medications
- Improve your sleep
- Improve your relationships
- Discover hobbies that are fulfilling
In order to “save” money, I often skipped over certain investments because I was too focused on the “cost” - coaching opportunities, fun times with friends, new experiences to travel, home upgrades. However, the real cost was the lost opportunity of NOT taking advantage of the experiences and the growth that would’ve occurred had I done so.
A New View on Costs
We never know what direction life will take us, even after one small decision.
Who will you meet, what new interest will you connect with, what job or life event will pop up since you changed the trajectory of your path? Reflect on the following cost/value assessments.
- Typical cost: $1200/month on high quality groceries vs. $800/month on processed, less healthy options. You saved $400, but what is the real cost of that savings when it comes to your health?
- Typical cost: $200/month at the gym = $2400/year. This may seem expensive to many people, but what’s the cost of NOT caring for your physical body?
- Typical cost: $5,000 to work with a coach or sign up for a course. The real cost is keeping yourself stuck in unhealthy, self-limiting habits and routines and will ultimately keep you from maximizing your precious time on this earth.
Place Value on What’s Important to You
Your values drive your behavior… So, what do you value?
If you’re unsure of how this is carried out in your life, a simple way to assess your values is to follow your dollars in your life. Review your bank statements and see where your money is actually going. Do your spending behaviors support your values?
Where do you spend your money? What pops up most? Are you happy with what you see? Do you wish your spending looked different?
Investing In Your Future
Did you ever make an investment that was originally scary and overwhelming and afterwards think, THANK GOODNESS I created that experience for myself?
When this is the case, you know that investment paid off and made sense in your life. For me, this was investing in a home renovation to create a new office space. While the cost up-front seemed scary and like an irresponsible way to spend our money at the time, I am so thankful I have this space now to serve my clients well and run my business. In fact, this new space has supported us as my husband has created 2 additional businesses which has been truly life changing for our family!
I encourage you to take the time to assess these areas of your life and ask yourself how you view expenses and investments. What new habits and perspectives do you want to prioritize in 2022 when it comes to your money and how you exchange it? It’s never too late to change your relationship with money. This one simple shift in how you view cost vs. value has the potential to be the perfect next step towards creating a life you truly love.
Holly Mann
Holly Mann
Personal Success Coach
Founder of Fresh Habits: freshhabits.net
I am on a mission to facilitate meaningful conversations that encourage individuals to upgrade and expand their habits and routines which will ultimately allow them to live life at their fullest potential!
