Life First, Money Second

What do I really want out of life? What kind of life do I really want to have, starting today and moving forward?

Over the course of my adult life, I’ve basically been on a constant journey to refine my answer to those questions. I went gradually from having no impression of what I wanted out of life at all, to some broad brushstrokes, to gradually filling in more and more detail until I really understand what it is I want from life.

What I’ve come to realize is that the less clear I was about what I wanted out of life, the harder it was to live in accordance with any sort of financial principles in mind. If you don’t have anything you’re working for, it’s easy to just spend that money as it comes in on whatever will bring you the most momentary happiness.

But I’m getting ahead of myself here. First, let’s take a walk down memory lane to look at how my life perspective has changed and how that influenced my finances.

The Early Years: No Life Vision, Rampant Spending

During my early adult years, I had no real concept of the future whatsoever. I understood at least that I would eventually get old, so I was smart enough to start contributing to my retirement plan at work as soon as I got my first “real” job, but aside from that? The future was a blank slate.

I might get married, and I did eventually. I might have kids. I might own a house. But in terms of the kind of day to day life I really wanted? I didn’t really have any idea. I mostly mimicked what I thought other people my age did.

I did have a sense that I wanted to build a career of some kind on the career path I was initially on, but I didn’t really have any sense as to what that really meant beyond “work hard at my current job and look for the next step up.”

In short, I had no real vision whatsoever of what the future would look like beyond the broadest of brushstrokes and no sense of the kind of day to day life I wanted to lead.

Without any sort of sense of what I actually wanted out of life, spending on whatever interested me at the moment became the default setting. I wasn’t really working toward anything, so the call of momentary desires was quite loud. If you don’t have any kind of long term goal or life ambition or sense of the kind of day to day life you’d really like to have, spending on today seems mighty compelling.

Unfortunately, that kind of attitude leads right into debt. If you don’t have any sense of the future or of the life you want, it’s incredibly easy to fall into the notion that your “future self” will take care of it because that “future self” is a complete blank slate. As far as I could tell at that point, that “future self” would be making very good money but, at the same time, that “future self” really didn’t have a life because I had no vision or ambition for the future.

What happened? I spent and I spent and I spent some more, and I dug myself into a giant financial hole. In terms of my day to day life, I had no vision of the life I wanted for myself, so there was really not much else to do other than to spend that money.

The Financial Turnaround: Broad Brushstrokes for Life, Tight Control on Spending

What happened? Two big things. I got married. Then, I had a child.

Both of those things were part of my big but not well considered plan for the future. I did want to get married at some point, and I did want to have children. I just didn’t think about those things too much until they happened.

Even having a child wasn’t an immediate trigger for change. Sure, like almost every parent, I was almost overwhelmed by the responsibility of it, but I didn’t really think about the long-term future of it at first. Instead, I was focused on the routine of changing diapers and rocking the baby and holding the baby and so on.

As time went on, though, I began to realize that if I kept on my current path, my child wasn’t going to have the best childhood. We lived in a tiny apartment with a bunch of credit card debt and student loan debt and car loans hanging over our heads. The idea of actually having a home where our child could go play in the yard was far off in the vague future. The idea of paying for all of their upcoming expenses? No idea how I was going to do it.

This all came to a head one night when I was realizing how precarious our financial situation was. We had received some bills in the mail that we couldn’t afford to pay – not even the minimum payment. That night, my infant son couldn’t sleep and so I spent a few hours rocking him and thinking about his future and my own.

The next day, I woke up groggy after getting very little sleep, but I had the first real detail of the life I wanted for my future in my head. I wanted my child to have a childhood without worry, or at least as close to that as I could approach within what I could control.

That became my focus and, after some really fruitful conversations with Sarah, it became her focus, too. We wanted to build a great childhood for our son and get him off on the right foot in life.

What did that entail? What was our game plan? First and foremost, it involved getting rid of all of this consumer debt. Then, it involved finding a family home in an area with families at least somewhat nearby. It involved saving for his college education so that we could pay for at least some of it right out of pocket.

Those were tangible things that we could do that were directly tied to what we wanted out of life. For the first time, we had part of the big picture for our shared life in place, and for the first time, we could tie that big picture to what we were doing in our day to day lives.

That was transformative and fairly intoxicating. I dove deep into personal finance books and started trying every tactic I could find. We basically eliminated our non-essential spending in very short order.

Very quickly, those debts started to melt away, and we learned quite quickly that debt had been putting a lot of “background stress” into our life. We didn’t actively realize it, but being in debt had made both of us anxious and stressed out about almost everything. As the debt receded, so did a lot of that stress.

Reflection and Growth: Filling in Life’s Picture, Careful Spending Choice

Eventually, we paid off all of that consumer debt. This took about 15 months or so. I started writing about this change on The Simple Dollar when we were part of the way through paying off that consumer debt. We then bought a house and took on that mortgage, which we paid off in about four and a half years. Along the way, we had two more children.

As all of this went on, I started spending a lot of time reflecting on what I really wanted out of life. If I drew a picture of my ideal life in a few years, what would it look like?

What I came to realize is that most of the elements of that picture that excited me and really mattered to me weren’t really financial in nature. They didn’t involve buying things. They didn’t involve shelling out cash for big experiences.

I wanted low stress. I wanted my basic needs taken care of – basic clothing, a roof over my head, and so on. I wanted my children to feel secure and happy and to be on a path to becoming strong and independent people. I wanted free time to explore my interests and hobbies. I wanted a strong marriage with my wife. I wanted strong relationships with each of my children – warm parent-child relationships, not friendships. I wanted a handful of close friends with whom I had great relationships. I wanted to feel good and healthy when I got out of bed each morning. I want work that’s fulfilling. I want those things to be secure and stable as possible, protected from the vagaries of employment.

And I still want all of those things.

For me, those are really the elements of the life that I want to live. If I have those, then life is honestly pretty good.

Having an amazing house would be fine, sure, but it’s extremely secondary to those other things. The same with having an amazing car or going on amazing trips. Everything else I could think of that a person might want out of life was secondary to those things above.

So I made them secondary. Very secondary.

When my mind wanders onto an expensive purchase, or even onto too many inexpensive purchases, I ask myself whether or not those things trump the main things I want out of life. If I can’t make a strong case, then I put off that purchase.

Money exists to secure the life you want to live. So, what kind of life do you want to live?

I don’t have the answer to that question, but I do have a few elements I’ve picked up over the years that might help guide you to your answers.

The Rule of Everyday Life

First and foremost, I found that if I aim for the best possible day to day life several months down the road, things tend to click into place pretty well. What would be the best average day I could have in six months to a year?

Well, for me, it would be a low stress day. I’d wake up feeling great. I’d spend some quality time with my family. I’d spend some time on my hobbies and some time on work that was meaningful and interesting to me. I’d go do something active, like getting some exercise or at least going on a long walk. I’d get a few things done that had been on my mind lately. I’m closer to other big goals than I am right now – things like my children’s full independence. To me, that’s a pretty good day.

Then, I tweak it a bit. In order to have that kind of day on a regular basis in six months, what do I need to be doing right now?

I need to have financial security so that the stress level stays low and that I maintain the daily freedom to do most of those things. I need to be healthy, so I should eat well and get some real exercise today. I need to work on my relationship with my wife and my kids and make sure that’s healthy.

In other words, the best way you can spend a day right now is to fill it with things so that your ordinary days are as good as possible six months to a year from now.

For most people I’ve talked to, securing those good days in the future involves good personal finance practices on at least some level. That ideal “ordinary day” often takes financial health for granted, but the only way you get that financial health is by practicing good financial habits today and moving forward.

The exact elements of this are going to vary from person to person. What you want out of an ordinary day in the future might be different than what I want. However, I’m willing to bet that there’s a good chance that whatever it is you want, it’s going to be more likely and more secure and lower in stress if you have your financial house in order.

The Rule of Big Splurges

Many of us have visions for the future that involve at least some big splurges. Maybe you envision buying a house or going on a big trip. My vision for the future for my family involves going on at least one international trip when my children are older – and, ideally, two or three.

If you have that big splurge in your future, answer this simple question: What am I doing today to secure that big splurge so that when I do dive in, it doesn’t disrupt my life and put me in stressful financial handcuffs?

Let’s say that in the years 2021 to 2024, our family was going to go on three different international vacations together. (This is purely hypothetical – my guess is that this actually doesn’t happen.)

What am I doing today to secure those vacations so that when we do them, it doesn’t disrupt my normal day to day life (described earlier) and put us in financial handcuffs and, even worse, add some stress to those trips when I want them to be low in stress and purely enjoyable?

The answer’s easy: I save for it. We’re already putting money away in a savings account solely for that purpose. We’re ideally shooting for one trip to Asia and another to my wife’s ancestral family home, and we’re considering one more. However, we want to be able to just pay for those trips out of pocket without disrupting anything else in our life and without putting us in any sort of financial handcuffs, and the only way to do that is by saving a little now, each month, until it arrives.

Figure out what big things you have coming up and start saving for them now. That way, when they do come around, they don’t disrupt the other elements of your life. They don’t put you in financial handcuffs. They don’t add stress to the equation.

The Rule of Freedom

Underneath all of this is the core idea that maximizing personal freedom and choice is the best goal for a joyful life for most people, and the most powerful way to support that freedom is to have a firm financial foundation under you.

I’ll give you a concrete example: careers. It was only through having a good financial foundation under our feet that I could consider changing to a full time writing career from my previous full time career in a research environment. Financial security enabled a career option that would have never existed before.

Furthermore, our financial security makes it possible for us to survive a sudden unplanned career shift. Let’s say, for example, that The Simple Dollar suddenly went offline and my other writing opportunities disappeared and I had to find a new career path to follow. I could do this on my own terms, without real worry, because of our financial foundation. I would have the time to shore up my experience in my earlier career path and go back to that work, or try out a new endeavor or two. It’s not a complete panic situation if I were to lose my job.

This doesn’t mean that I am “free” to spend money hand over fist every day. I certainly could do that. However, I recognize that all it would provide for me is a short burst of immediate pleasure that would rapidly fade, but it would bring financial challenges and stress with it and those would last and last and last. Sure, I can go splurge like crazy. I can go buy whatever my heart desires. Yet, if I did that, that initial burst of pleasure would fade fast and I’d be left with a strictly worse version of my everyday life with less personal freedom and fewer options. That splurge better be quite worth it, which is why I’m slow and careful with my splurges.

Splurges simply aren’t worth undermining the day to day life I want, at least not for me. They fade too fast and leave too little behind.

Final Thoughts

One of the biggest lessons I’ve learned over the last 10 or 15 years of my life is that establishing a daily life that I’m really happy with, one that fulfills me while also building toward the big things I really want in life, is paramount. The thing is, that daily life really isn’t very expensive at all.

Money’s role in that everyday life is in washing away stress, opening opportunities, keeping those opportunities open, and protecting against disruption. If you’re using money just to add more and more unimportant little pleasures to that daily routine, you’re still left with the stress and the lack of opportunity. I’ve been there – it’s not a tradeoff I’m happy with.

Financial security and consistent good financial choices provides a foundation for the life you want to live, but it is that life that comes first. However, the things that make life great can’t be bought. Money can only help extend your options.

Life first. Money second.

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