Financial Friday - Lottery
It's not daydreaming... well it is, but it can be constructive?
The Lottery
Recently, you may have noticed that the jackpot for Powerball (played in most US states) reached nearly $2 billion a few months ago and Mega Millions (another lottery game) is around $1 billion! Seriously, we know the odds of winning are low (1 in 300 million or so…), but that apparently hasn’t stopped a lot of people from buying tickets!
Some of you may have daydreamed/fantasized about winning and what you’d do with the money (you’d never ever find, nor hear from me again). Sure there probably would be the usual car(s?) or house buying (for you and relatives?) and other extravagances but for all of those that might blow it all in Vegas or Macau, there are bound to be many that really respect the value of money (perhaps because they grew up without or worked so hard to earn it) and plan to put a lot of it in savings, investments, etc.
Why am I talking about this? Sure, it can be considered daydreaming and you certainly don’t want to get consumed by it (and subsequently get your hopes crushed when you don’t win), but at least you’re putting some thought into where your money is going.
Odds are, you’re not going to win, but as you think about what cars you’re going to populate your remote island home in the Greek isles with, you may realize that some planning in the real world would be beneficial.
$ Goals
It never hurts to take stock of your financial situation occasionally to make sure you’re on track. We talked about starting to budget in another article, but what about goal-setting?
Are you planning for retirement in 15 years? 10?
Do you have some kids that you plan to send off to college in a few years?
Are you saving up for a new home?
Are you just nibbling at some long-term debt?
Setting goals and documenting them will help you “work backwards” and see how much you may need to allocate monthly, weekly, etc., to get to your target on-schedule.
To add accountability, make sure your goals are visible or let someone in on them, like a friend or partner. Make it a point to log your progress to keep yourself honest.
After that, you’ll need to regularly (end of month, perhaps) re-visit your goals and see if you’re on track or not. Distractions happen in the real world and if you don’t keep track, it can be easy to forget about goals that have importance.
As always, there are apps that can help you set and manage your goals like Mint and others.
Parasites
Another thing to look for are “financial parasites”. What I mean are services and subscriptions you signed up for (either knowingly or not) that you no longer need or are underutilizing. Depending on the source, the average American spends more than $200/month on subscriptions and most people underestimate how much they’re spending on them!
A popular list might include: Netflix, Disney+/Hulu/ESPN+, Spotify/Apple Music, Dropbox/Google Drive, Apple Arcade/Google Play Pass, Xbox Live/Playstation Plus, Adobe Creative Suite, Amazon Prime, Walmart+, and more!
Of course, if you can find them (or if you’re looking at your budget/expenses) on your phone/tablet/PC, you can sign in and manage them, but never underestimate the power of human laziness! Do you realize that in this age of “subscription everything”, there are now entire companies built to help you manage all the disparate things you’ve signed up for? Now, companies like TrueBill and others can help you wrangle and cancel subscriptions you don’t need. The catch? You’ll have to pay those apps a subscription, too! What a time to be alive!
Look, I know it’s not easy since you “need” so many of these services to relax after work, but taking a good look at them (and perhaps keeping track of the last time you actually used them) may lead you to discover a few you can live without.
Awareness is Key
Is with many things in life, survival, sports, etc., simply having some situational awareness (knowing what’s happening in and around your area) will keep you better prepared for unexpected events. Be sure to apply the same thought process to your finances!
Sources/links:
Subscription Management
https://www.pcmag.com/how-to/track-and-manage-your-paid-subscriptions
https://www.forbes.com/advisor/personal-finance/manage-subscriptions/