Financial planning is just as much about understanding your buying and spending habits as it is about understanding how to manage cashflow and debt.

This year, I have discovered that I learn by doing, often the hard way. We recently bought my husband a new car. In the past we have traded our old car in to buy the new one but we always felt that we were losing too much. If we were to trade my husband’s current car in we would have been lucky to get $2,500, but we felt the car was worth $5,500, so we decided to sell it privately.

In order to get the best price, we needed to get the car detailed inside and out, pay the 12 months registration (as it was due) and get a roadworthy certificate which required a new windscreen and a couple of other small things. At this point, we have spent approx. $1,800, so in order to make this process worthwhile, we need to sell the car for at least $4,300, however this does not factor in the time and inconvenience of selling the car. How do you put a price on your time?

Now, it looks likely that we will sell the car for $5,000, but in hindsight, this process has not been worth it and we would have been far better off trading it in. What I can tell you for certain though, is that it is unlikely that I would have done that if someone else had explained it to me that way. Unfortunately I had to learn it for myself.

This process says a lot about my personal financial buying/spending/saving habits and is valuable knowledge when reviewing our own personal financial plan, which we do on a regular basis. What this process has reminded me is that I need to see value for the $$$’s that I spend, but often the amount I am willing to spend will give me back something that is far more precious to me than money and that is time, life, living. I would rather pay a painter to paint my house so I can spend that time doing something I love with someone I love.

During the financial planning process with my clients, I try to establish what their desired outcomes are and what is most important to them, so that we can use their money to achieve that. You can’t buy more time, but you can “spend” your time more wisely.

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