When it comes to spending your money, there is much more to it than just seeing something and buying it. It is up to you where and how you spend your money. Hence, it is important to make conscious decisions that are in line with your financial goals and personal values. In this episode of In The Know: Money with Marsai Martin, host Marsai Martin talks to Margaret Anadu, Global Head of Sustainability & Impact at Goldman Sachs, about how to spend money wisely.
At Goldman Sachs, Anadu manages approximately $ 1 billion to $ 2 billion each year and spends all of her time “thinking about how we can capitalize on our investments in the world,” whether in homes, schools, small businesses, or underserved communities.
But you don’t have to be a global investment banking company for your money to make a difference.
“As well as [Goldman Sachs] invested… I try to spend my personal money in line with my values, ”explains Anadu. “So I try to support small businesses in my community. I spend money on companies that I think share my values and that are making the right decisions about diversity and the environment. Even very tangible things like being in a restaurant and seeing how they treat their staff. So I think that with every single dollar you can almost in some way stand up for what you believe in. “
Spending money to make money
Next, Martin asks Anadu to break down the often heard money mantra “You have to spend money to make money” and how it applies to daily expenses.
“You can spend money so that it is 100% available,” Anadu begins. “For example, when you buy a dress that is way too expensive that you will never wear. That won’t pay back the dividends. But when you invest in your education or when you realize in your community that you need a car to get to school or to a job, it’s an investment that will make you money over time. “
Cash vs. Credit Card
A common question people have on their personal financial journey – especially young people and teenagers – is when to buy something with cash and when to buy something with a credit card. Which Anadu has some wise advice on.
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“You never want to borrow money that doesn’t increase in value,” says Anadu. “So when you use a credit card to make a purchase [a shirt], and this shirt is $ 20, and you use a credit card to buy it, it won’t cost you $ 20. It will cost you $ 20 plus any interest on that credit card. And this shirt loses value the second you buy it, so why bother with the interest on that credit card? “
Anadu then explains that buying something that increases in value over time is much better bought with a credit card, like her earlier example of buying a car to get to work.
“Coming to work will increase my income, it will bring me expertise and experience, so I might have to take out a loan to buy this car because if I get this car I will get this job, and when? If I get this job, I’ll make more money, ”Anadu said.
When cash isn’t an option
As more businesses only accept electronic money, Martin asks what options people should choose when they cannot use cash.
“I think there is a difference between credit cards that you really borrow money from and just cards that are your debit card or a card that is really only linked to cash in your bank account,” says Anadu. “So you can definitely use electronic payment, which is still just one way to use cash or whatever money you have. Or, for example, a lot of people use credit cards because they love the points. But they pay off that credit card in full every month so they don’t pay all the interest over time. “
Expense advice
Martin and Anadu round off their conversation with some general buy recommendations. And Anadu says that spending is all about making decisions.
“You want to make sure that you are spending your money in ways that are investing in your future that will somehow make you more money or, quite frankly, make you happy,” she explains. “So with every single decision, every single dollar, I just think, ‘Is this what I want to spend my money on? Is this what I want to spend my money on? Is that how I want to spend my money? ‘ Because it’s an important choice. I just think it’s very important for teenagers to start with this healthy relationship with money from the start, and I think that’s just a way to be more thoughtful. “
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Marsai Martin Exploring What It Means to Spend Your Money Wisely appeared first on In The Know.
