Scarcity
As a financial advisor this is how I understand my role: Working with individuals and families to help manage their resources in a way that enables them to live the life they’ve always wanted. It sounds simple enough but each of us have different hopes and dreams, unique situations and perspectives, pick up different habits (good & bad) and want to go to different places! It makes each relationship unique and is a large part of what I love about this vocation.
In spite of us each having unique goals and dreams there are some common pitfalls that can trip us up on the way to wherever it is we are going.
Comparison
In contemporary life the pressure to compare and keep up with others is real. It can get us into bad habits and get us thinking about our lives in ways that ultimately steal our joy. For example impulse purchases can give off the feeling of great satisfaction but if they form into a habit they can really dent your ability to align your resources with your values. The first time I came to Minnesota I was a seminary student. My wife was writing her first book for US release and we had two young children. Things were beyond tight financially. When we compared our lives to those of our peers we were falling behind. The pressure to keep up felt very real. But instead of trying to keep up we chose to focus on our own goals - graduating debt free. It wasn’t easy and involved sacrifice. We slept on a sofa-bed for 9 months. Went from two cars to one. Sought free events to take the kids too. We didn’t eat out. It was a thrifty time and yet we created some of our favorite family memories.
We may have graduated from seminary feeling behind our peers in some ways but we emerged with no debt, something that in the long run was far more valuable than keeping up appearances. Today when we notice our expenses creeping up or we’ve had a large unplanned expense we talk about going back to “Minnesota living”, a reference to our first months in Minnesota when we chose to get through the moment in the least expensive way. Today we might do it for a few months to re-establish our budget. It takes discipline but has been a helpful process to reset and live within our means.
Delaying the important
Dwight Eisenhower in a 1954 speech spelled out what many of us live everyday: In American life the urgent often takes priority over the important. Important activities have an outcome that leads to us achieving our goals (e.g.committing to an annual amount to contribute to the college fund). Urgent activities demand immediate attention and are usually associated with achieving someone else’s goals (e.g. constantly rushing around taking your child to the next practice or sporting event).
When we delay the important initially we may not notice a difference, but overtime the things that have been missed compound and can produce large gaps. Gaps into which your dreams fall as the distance between your goals and reality become too great.
Delaying important financial decisions can be a cause of deep regret especially if you had the means to achieve your long-term goals but didn’t take the time to prioritize them. Perhaps you’ve enjoyed living life month to month but have not really considering what is going to be needed when the kids go to college. Or perhaps out of generosity you assume you’ll be paying for each of your kids college but haven’t fully understood the consequences it may have for your own life in retirement.
Planning
The remedy for delaying the important and the risk that is associated with it is to plan. Planning isn’t a once in a lifetime exercise - its iterative and ideally should happen about once a year. Life happens, goals change over time and so should our plans.
The way out of getting caught up in comparison is through having confidence in your values and exercising the discipline to stick with them even when it's easier not to. Over the long-term when our values align with how we spend money we find a greater sense of joy and purpose in life.
If you’ve been delaying for too long or perhaps you’ve got caught up comparing your life with others you would likely benefit from scheduling time with a financial advisor. Schedule a free consultation to see how we can help you build a plan to get you where you want to go and give you the confidence to live life along your values.