Paycheck Chronicles

Put Your Money Where Your Heart Is


“Duh. Why didn’t I think of that?”

That was my reaction to a conversation I had with a colleague here at USAA. He was talking about the everyday trade-offs we make without a second thought. You know, money spent on one thing that now can’t be used for something else.

In the same vein, a buddy told me his choice to drive a modest car (with a modest payment) freed up a few hundred dollars a month that help fund his family’s vacation. Pretty slick.

Those exchanges got me thinking about the importance of deploying money in accordance with what’s important. Not what’s important to me, your parents or your neighbors but to you. With that value as a guide, would your decisions look different?

Let’s look at a few examples.

Car For Vacation

Here’s the basic math on how this could work. Instead of a luxury SUV with a $50,000 price tag, you could choose a no-bells-and-whistles version for $25,000. By my calculations,* that chops your payment down by $460 a month. Over the course of a year, that’s more than $5,500 available for a family vacation. That’s a pretty nice trip.

Less Car For More House

Not to pick on cars, but think about the type of house you could squeeze into your budget with an extra $460 per month. That would buy you about $115,000** more house. Now, granted, you may have additional maintenance expenses and other factors, but the basic idea holds: Put your money where it really matters. And if you have two cars, the amount goes up even more.

Eating in for in-dependence

OK, I couldn’t leave this discussion without busting out the importance of investing for the future. So, what if you (or your kids) trimmed money spent on dining out by $25 weekly and invested the $100 per month you saved. With a hypothetical 7% annual return, you’d have more than $250,000 in 40 years. Visions of the freedom and flexibility that money could provide might make home cooking (or even frozen pizza) taste a lot better.

So what trade-offs are you making? Are they conscious decisions designed to improve your financial well-being or quality of life? Or are they just byproducts of life’s momentum, robbing you of the things you really value? Make thoughtful choices and put your money where it can produce the results you desire.

*$25/50K at 4% 60 months

**30 year mortgage at 4%

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