June 23rd, 2017 | David Simpson

Great return on investment

Investing the time and energy to track expenses and planning ahead will provide a great return for amount saved.  Any potential return on your investments can be overwhelmed by unexpected and/or higher spending.  If you can save money by smartly planning your spending, this will help your portfolio just as much as if the portfolio generated this amount of income.  If your spending is too high for your portfolio, you may have to take unnecessary risks to maintain your lifestyle.  Here are some various areas to consider:

Paying for Subscriptions You Don’t Use and Services You Don’t Need – If you have magazines you pay for but rarely read or can access online, then consider canceling these to save money.  Are you signed up for any club memberships that you don’t use, cancel these.  If you pay for a high-end cable and internet package but rarely watching the premium content then consider getting the same movies online to save the cost of the cable movie package (plus taxes).

Mindless Spending – It is easy to order something online, pick up a few extra things at the store, or going out to eat instead of dining in.  These things inflate the budget without much effort but by raising awareness, you can reduce this spending.  Instead of dining in at most restaurants, you can plan ahead by placing an order for pickup and avoid the additional spending on drinks and desserts that come from eating in the restaurant.

Spending to Maintain Status – When you see a friend or neighbor with a new car or hear about their nice vacation, this may cause you to want the same thing.  A new car or big vacation is nice but be sure to plan for this so you are not spending to keep up with perceptions of what you are supposed to have.

Create Specific Goals for Major Purchases – Plan now for the major expenses such as a new car, a vacation, or major home repairs.  By planning ahead for these expenses, they won’t require a sudden decision and you can research your options instead of making a quick and costly decision.

If you need help with these expenses, we can use the (MAP) Miller Advisors Portal to help you track your expenses.  Most people have a rough idea of what they spend each month but then forget about the one-time expenses such as insurance payments, property taxes, etc.  Consider some of these ideas to generate an additional return on your money.  What do you think carries less risk, reducing your expenses by $500 or $1,000 per month ($6,000 or $12,000 per year) or trying to get an additional 1% to 2% return on your portfolio?  If you aren’t sure, call us and we can help.