This week, I had a conversation with a dear friend of mine about spending money. She made the observation that if she spends money today, then there’s that much money less to pay for her retirement. I couldn’t argue with her. In fact, I was happy that someone else in my circle of loved ones was thinking about their senior years. Sometimes, I feel like an outcast when I talk about money. It’s one of the reasons I like to chat about it online. It does me good to know that people in my real world are considering how to accumulate the gold for their golden years.
We live in a capitalist culture where we’re exhorted to spend every penny that we earn. Should our earnings not be enough, we’re strongly encourage to borrow money to spend beyond our means. Look around! Outside of the personal finance corner of the internet, there’s almost no discussion about saving money for emergencies, building up a retirement fund, and creating cashflow to replace your income. Instead the overwhelming message is to work hard, spend money, wake up, repeat.
I think this is a terrible way for people to live.
We were not given life just to work and spend money. Our lives should be about time spent with those we love best. We should be striving to spend as much time as possible engaged in the activities that bring us joy. I’m not convinced that we need to live on a never-ending work-spend-sleep treadmill to be happy. The beauty of financial freedom is that it’s a situation where work becomes optional. Being FI means spending your time as you see fit.
One of the universal truths is that choices have consequences.
I want you to think about what you want from your life. Now, ask yourself if your spending choices are getting you closer to or further from that life. If your choices aren’t getting you closer to the life you want to live, then explain to yourself why that is.
Vicki Robin and Joe Dominguez of Your Money Or Your Life have taught us that money is the manifestation of your life’s energy. In short, you trade your life energy for money. It seems only logical that you spend your energy in ways that create the life that you want to live.
From what I’ve observed, people base their spending decisions on short-term thinking. They’re concerned with today, and possibly next week. They don’t really start to consider the long-term until they hit their late 40s, 50s, and sometimes 60s.
I get it. When I was a teenager, I brought home roughly $108 every two weeks from my part-time cashier job. My money went to dinners at Red Robins with my friends, followed by a movie. It was a simple life, and I never thought beyond my next paycheque. Long-time readers know that I had an automatic transfer in place so that $50 was squirrelled away to my savings account. If I could go back in time, I’d tell Young Blue Lobster to just put that money into a broad-based equity index fund (or exchange-traded fund), and then never look at it. The past 30 years have flown by! Had I started investing at 16 instead of 21, I’d probably be retired by now. I would certainly be financially independent.
However, that didn’t happen and I have to live with the consequences of my teen-aged choices. I’ve spend the last few decades teaching myself about investing. When necessary, I’ve tweaked my investment strategy. I’m forcing myself to ask harder questions, to analyze information more critically. I’ve finessed my money-management strategy to the point where it’s on auto-pilot and needs very little attention from me on payday. My choices from yesterday have resulted in both good and bad consequences for me. Had I made different choices, I would be living with different consequences.
Take some time to assess your money choices. Are the consequences of yesterday’s choices bringing you joy or misery? Maybe neither? Are you committed to making more informed choices in the future? What will you do today to get the consequences you want tomorrow?
The choice is yours.