When it comes to measuring life's pleasures, people often think in terms of their return on investment, the RoI. But what about the equally important return on enjoyment, the RoE?
Busy schedules and competing financial demands can leave taking time off work quite low on the priority list. According to a recent TD survey, however, nine in 10 (92%) of the Canadian respondents said that it is important for them to take time for life's enjoyments – and yet over a third (36%) of the respondents said they are not taking their full allotment of vacation days.
Experts offer the following tips:
• Prioritize: Decide what you want to invest in and determine the associated costs. Are you interested in something that you can enjoy time and again, such as a yearly pass to a museum, or a new hobby? Or indulging in an exotic week-long vacation? Determining the cost and value each option brings to you will help maximize your RoE.
• Think short-term vs. long-term: Once you have determined your priorities, consider meeting with a financial planner and determine which savings method best corresponds with your goals. Saving for short-term goals, such as a vacation, could be attained by contributing to a high-interest tax-free savings account whereas long-term goals, such as retirement, might be better suited for RRSPs.
• Review and reevaluate: Regularly review your financial plan and adapt as needed to help you stay on track. It's also beneficial to consider which activities can be paid for over a longer period of time, such as taking multiple professional development courses versus those that are often paid for in a lump sum, like a vacation.
Regardless of how you choose to spend your spare time, it's important that you are maximizing your investments and return on enjoyment.
