It’s confession time again. I am a classic “Type A” and overachiever in recovery. For the most part, I like rules, I like order, and I like structure and systems. There, I said it out loud.
But can I confess something else? In the last few years, I’ve broken a lot of the financial “rules” that the financial experts say I should adhere to. When you start a business like I’ve done, sometime you have to break the rules to get yourself on the fast path toward a longer-term goal. So yes, I’m currently carrying debt related to the business. And yes, I’ve taken money out of my retirement account to fund the business (I can hear the experts screaming now “noooooooooo!!!!).
When it comes to financial “rules,” there are lots of financial experts out there telling you what you should do with your money. Pay yourself first, save 3-6 months of living expenses, don’t carry credit card debt, etc. etc. etc. And in general, I think they have solid ideas that should be considered when you’re building your financial plan. I incorporate many of these ideas in the plans that I design for my clients.
But the one big thing I find that these experts are missing is that people want CHOICE in their lives when it comes to how they live it. People want to live and be happy now, and not wait until they “get to retirement.”
Can I tell you a secret about these financial experts? Sometimes they drive me nuts. They have a lot of good intentions and are doing their best to teach you what has worked in the past to be financially “safe” and end up with a boatload of money when you retire. It’s what I like to call the “accumulation method” where you save up a ton of money and for the most part, wait until “someday” to have fun.
Well you know what? Life’s way too damn short. And from my perspective, life is to be lived NOW and experiences are to be had NOW (not when you retire). It’s time for us to create our own rules!
Now, before everyone starts to go off the reservation spending all their money and racking up credit card debt to live a life that they can’t afford and saying that I said it was ok to do that, that is NOT what I’m saying. What I am saying is that it’s in your best interest to invest some time in developing your own financial rules that work for you and your life and that will help you to achieve your goals and choose what is important for you.
Be intentional with your money. Be intentional with your life. Sit down and take time to decide which of the traditional financial rules will serve you well and which ones you want to redefine a bit more for yourself so that you can enjoy your life here and now. It’s important to have a financial framework that allows you to build financial freedom for yourself while also experiencing life joyfully.
Establishing your own financial rules can be a bit tricky if you’ve never tried before, so here are the 3 steps I would recommend if you’re wanting to reconsider your own rules:
1) Ensure your financial stability – I’ve had clients that get really excited when they hear that I’m not afraid to break some of the more traditional financial rules that most people would suggest. However, let me be clear – while I am not afraid to bend and mold the rules to meet each client’s need, it is critically important to be working toward a basic level of financial stability before changing the rules in any substantial way. The reality is that life takes money to live, and money is a tool to support goals. So first and foremost, develop a financial plan to suit your life that allows you to handle your commitments (i.e. bills, etc.), save some money, and pay down your debt, if applicable. Having a financial foundation will allow you to absorb future unanticipated bumps in the road.
2) Consider the rules of the past – Many of us learn things about money from the people around us while we’re growing up (parents, grandparents, neighbors, etc.), and we never stop to really think about whether these rules or beliefs actually work for the lives we are building for ourselves now. In my household, both of my parents worked as employees and while they taught me many great things about money, I absorbed the belief (or rule, if you will) that financial security came from a paycheck and benefits. It wasn’t until I realized that this little gem of a belief was rattling around in my head (unconsciously rattling, I might add!) that I could examine it and decide consciously whether it was still true for me as I considered entrepreneurship that would require me to be responsible for my own paycheck and benefits. So, ask yourself this question as you think about changing your own financial rules – what beliefs or rules were you taught that may no longer serve you where you are in your life now? Once you gain awareness of what these beliefs and rules are, you can spend time understanding them and begin to choose differently and consciously.
3) Balance short-term goals with long-term goals – If you listen to many of the financial experts, a significant portion of them are highly focused on saving for retirement as the “mecca” of all times in our lives. While I agree that long-term saving for retirement is indeed important and that there are smart ways to do that, for me life is also to be enjoyed now and money is to be used to experience the present as well. As you’re considering new financial rules for your life, think about some of the experiences that you say you’d like to do “someday” and think about whether you should fast track those things to do sooner rather than later. Should you save for that vacation to Italy 3 years from now instead of when you retire in 20 years? Perhaps you’d enjoy date night with your husband or wife once a week to keep your marriage strong? Maybe you love a certain place to vacation and you’d like to buy a small second home for regular time off to rest and relax with friends and family? Each of these choices might make you happier now and result in a better balance between fun and financial responsibility.
As my mentor would say, live life like you mean it and go for your dreams. I know I live a much happier life now that my paycheck no longer defines my worth and I balance my retirement goals with living in the present, and I’d love for you to have the same for your own life!
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