By Douglas Goldstein, CFP®

Get it now. And by that I don’t mean buying more stuff. I’m referring to accumulating wealth. The reason why you should do this now, and not procrastinate, is because assets accumulated when you’re young will help when you’re older. Compound interest may be the magic formula for letting your investments work for themselves. And if your savings are working for you, you may not need to work as hard or for as long.

Even more important than accumulating assets
While accumulating assets is important, perhaps it is even more important to accumulate sound financial habits – don’t spend beyond your means. You may figure the small luxury of new bath towels is something you deserve (and relatively inexpensive compared to pampering at the spa), but beyond the initial purchase price, there’s the cost of upkeep. Fluffier towels take up more space in the washing machine, which means more loads to wash, more water, more detergent, etc. It’s not only the trivial cost of daily chores that you should pay attention to, but your overall approach to spending and saving: do you make purchases because you feel you deserve something or because you need it?

Money is meant to be spent. However, there is a difference between careful spending and thoughtless spending. Before you make a purchase consider your budget and make sure it fits in with your overall financial plan. If your budget has a line for discretionary spending, you could buy the newest gadget without worrying about breaking the bank. Conversely, some people have “save, save, save” engrained on them from a young age. While this is prudent advice, depending on your situation, it may be appropriate to spend. A retiree with a sizeable savings and adequate health care insurance may be able to spend more than they’re used to. Creating a financial plan can help you determine if you should be in the saving stage or the spending stage of your life.

Douglas Goldstein, CFP®, is the director of Profile Investment Services. He is a licensed financial professional both in the U.S. and Israel. He offers securities through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company. His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.