Why A YOLO Mindset = Financial $tress

A YOLO (You Only Live Once) spending mentality uses our mortality as an excuse to make reckless money decisions. It keeps you in a cycle of financial stress because you’re making short term financial decisions that have long term consequences.

It’s way too easy to talk ourselves into bad money decisions when we’re caught up in the moment.

If these thoughts sound familiar, you might need to check your YOLO spending –

  • Why not buy these shoes (I can’t actually afford) if they make me feel good, and hey I could die tomorrow!
  • I can’t take money with me, why not burn through it now?
  • Everyone else is doing it.
  • What good is money sitting in my bank account? Let’s have FUN.
  • Ugh, saving is so boring.
  • I want what they’re having.
  • What’s another $100 on the credit card, I’m almost maxed out anyway.

Whether they’re small decisions (another round of drinks on the credit card) or big ones (taking on a massive mortgage for a dream home because #yolo) they all add up.

The carefree, exciting YOLO feeling is eventually replaced with money stress and financial panic once the bills come rolling in.

A YOLO mindset is a financial ticking time bomb

Using YOLO as an excuse to rack up debt because you want something right now totally overlooks the important, long term stuff – budgeting, saving and unexpected changes to financial circumstances.

Financial freedom doesn’t happen by accident; sustained effort and long-range planning are key. Too many YOLO moments – or even ONE, if it’s big enough – can send your finances into a disastrous spin.

YOLO is a little like burning the candle at both ends; you actually need to work longer and harder to keep up.

It’s an avoidance strategy

Underneath the YOLO decisions is a fear to face your money demons and get serious about sorting out your financial life.

It’s an excuse to bury your head in the sand for a little longer and continue to avoid talking about money or opening the next credit card statement.

Financial avoidance is a BIG PROBLEM and it will keep you trapped for years in the same cycle of never getting ahead. Financial problems don’t go away just because you don’t open the bills, they just compound…

Especially if you are doing everything you can to help them get worse, because #yolo!

Complacency is killing your financial dreams. Take action now.

The YOLO hangover – more debt and less choice

Ever wake up with a throbbing headache after a big night out and think …..arrrghhh WHY did I do that?

Unlike that kind of hangover, you can’t sort a YOLO hangover out with a few Nurofen and three bacon and egg McMuffins. The financial repercussions of a YOLO hangover have far-reaching effects into your future.

money hangover

One minute you’re living the good life, with the big house (you really couldn’t afford) and sweet car (with sky-high repayments), the glam stuff and big toys. The next minute, you’re financially squeezed from all sides, your choices are suddenly very limited and money anxiety is off the scale.

You might even come to resent that big house, car and shiny new things because all you can see now are the dollars draining from your account quicker than you can get them in. Arrrgghh WHY did I do that?

And It’s contagious

Most of us have heard the saying that we’re the average of the 5 people we spend the most time with. Other people’s behaviours and mindsets rub off on us; for good or for bad and keeping up with your YOLO’ing friends when you can’t afford to is money madness.

Everyone else is doing it isn’t a reason upon which to base money decisions – big or small – that can impact your financial future.

When we decide to make a serious change in our lives, the way we handle our money, our health, careers, whatever it may be we usually need to make a few changes in our environment.

This might mean spending less time with the people who are costing you financial security with their spendy habits you try and keep up with. Identify those who encourage you to spend – either directly or subconsciously – and how to neutralise their effect.

A new way to think about YOLO

Of course, it’s true we only live once but who wants their once to be a long time? I know my hand is up!

Instead of thinking about YOLO as a momentary decision making philosophy, why not think of it as a lifelong idea. I only live once so I want to make the most of my WHOLE life; now and in the future, and that means being financially free.

The truth is, the sooner you can achieve financial independence the sooner you have more freedom in your life and more real choice.

financial freedom

Swapping spontaneous or reckless financial decisions for careful planning and yes, some sacrifice, means you can achieve the kind of financial independence that allows you to really enjoy the one life you have.

I’m not saying you need to squeeze all the fun, spontaneity out of life. Instead, PLAN for that spontaneity. Yep, sounds a little counterintuitive but set up a little spontaneity slush fund you put some money towards each pay. You’ll have some cash to spend on the occasional YOLO moment without blowing the spending plan or waking up with the YOLO hangover.

Are you still living with the financial repercussions of a YOLO moment?

The next class of Investing Bootcamp opens very shortly. Keep an eye out this week for details. If you missed out last time, you don’t want to let that happen again, right?