The Three 800lb. Financial Gorillas
It’s once again time to dive into the dark and murky depths of personal finance philosophy. Into the can money buy happiness(?) realm.
Personal finance gurus, bloggers, writers, professionals, whomever tend to focus on big long-term future financial goals. Without a doubt, the three biggest goals that they (we) speak of are:
A. Becoming debt free
B. Gaining financial independence
C. Retiring on your terms, when you want
Sure, there will be other short-term financial landmarks along the way that everyone discusses: paying off student loans, getting out of credit card debt, buying a house… but the three biggies remain the same. They are common goals that almost everyone universally strives for.
The Problem with Long-Term Financial Goals
The problem with these three goals is that, for most of us, they are so incredibly far off in the future, that it makes it almost impossible to see the benefit of all of the hard work that it takes to achieve each of them in the present. It’s easy to get caught up in the end versus living in the moment and enjoying the means.
If you’re not careful, you can lose confidence and your life could lose meaning because in your mind, you haven’t yet achieved the goals that you want to achieve.
This post is somewhat a sharing of conclusions and experiences that I have come to, but also an effort to kick myself in the pants for being guilty of focusing too much on end goals (I have a feeling that is pretty common amongst personal finance bloggers).
End goals are integral, if not necessary, to achieve these financial landmarks. However, unless you take pride, enjoyment, and satisfaction in all of the tiny steps that it takes to get there, you will be miserable.
Living in the Now: The Mental Framework
When it comes to financial goals, I believe, getting back to the present moment requires setting the proper mental framework. I’m going to pose some questions, that only you can answer.
- Do I own my stuff, or does my stuff own me?
- At what point do I have ENOUGH?
- What’s more important to me – money or career satisfaction? Is it possible for me to have my cake and eat it too?
- At what point does being cheap cross the line and prevent me from missing out on life’s pleasures?
- What is my threshold for financial risk?
- How can I reward myself in a responsible way for financial discipline?
- How much money do I really need?
- How much money do I want to die with?
Answering these questions will take you a long way towards gaining peace with yourself in your day-to-day. I want to touch on a few things that I have found day-to-day pleasure in.
De-Cluttering My Life
De-cluttering my life is a huge challenge. But it is one that I get excited about taking head on. Periodically, I go through my possessions to get rid of stuff. I find that every time I do this, I start to add more stuff that had escaped the previous round of cuts. My values around stuff is changing.
It’s a game for me, a challenge that I enjoy. And in the process, it has led to me not wanting to spend a lot of money on the latest ‘in thing’.
It helps to keep me in the moment, working towards an end goal, but with a lot of reward along the way.
Moving from Cheap to Frugal
I went from being crazy cheap to now being frugal. The difference for me is that being extremely cheap meant that it was painful to spend any money, regardless of the reason. Frugality, on the other hand, is much more forgiving and enjoyable. It is a game to me. It works.
I find it fun and get a lot of pleasure if I am able to negotiate a lower price for a product or service, lower my overall monthly expenses through budgeting, or simply finding a great coupon to get half off of dinner for my wife and I.
Frugality is a way for me to enjoy the means and forget the end goal. Again, it works for me. What works for you?
Setting Achievable Short-Term Goals
Prioritizing goal setting by placing more value on short-term goals versus long-term goals can help you focus more on the process and reward in the present moment. Maybe your highest priority goal should be avoiding impulse purchases, cutting up your credit cards, balancing a monthly budget through a spreadsheet, or paying off a small debt.
These goals are much more relevant and attainable. They ultimately go a long ways towards you achieving your end goal, but they keep you focused to the near-term.
I don’t pretend to have all the answers, and this is something that I still struggle with daily. Some of my suggestions may work for you, others will not. But I am curious to find out how all of you handle this challenge. What keeps you living in the now despite being far away from your long-term goals?