The Financially Responsible Decision

Making financial decisions is difficult. Treat yourself or save for the future? The financially perfect decision between spending or not spending is always not spending. Zero extra spending on even a simple chocolate bar or drink to help you get through the day. No spending on extra clothes or the latest tech gadget. If it is unnecessary in the slightest the financial responsible decision is No. This sort of decision making would get you to your financial goals real fast but deprive yourself of many of life's simple joys. Never eating out, never traveling, never buying luxury items, never having any fun. The FIRE (Financial Independence Retire Early) movement is a take on this with spending drastically reduced. When should you make the financially responsible decision and when to spurge is a constant battle, but we should always seek to be as educated as possible on our financial decisions.

What Are You Missing Out On

Every financially responsible decision made is an opportunity for fun that is missed. Weddings not attended, trips not taken, social events missed. It comes at the price. Friendships can be missed or ruined. Traveling missed while still young or time spent away while you had young children at home. Time can never be taken back and wealth can not give you back your youth so it's important to know the true cost of working late or not living in the moment and utilizing your wealth while you have time. Health is promised to no one and many people wait for retirement to travel then realize their bodies will not let them. 

Benefits of Missing Out

Missing out on expenses can lead to huge payoffs down the line. For my personal situation it's around $8,000 to pay off a year of my Mortgage. $8000 can buy a pretty nice vacation or a good downpayment on a new vehicle or you could chop off a year of your mortgage making that extra year stress free with minimal housing expenses. Every dollar not spent could be invested instead doubling your dollars every 10 years. One dinner today = 2 dinners in 10 years. One Vacation today = 2 Vacations in 10 years. 1 luxury vehicle = 2 luxury vehicles in 10 years. It's The Marshmallow game but for adults and instead of waiting 15 minutes to get 2 marshmallows you need to wait ten years to get two. Discipline and Patience are definitely needed.       

   

The Good Place Reference

Making the best financial decision is sort of like trying to be the best person possible. No matter how hard you try to be kind and never offend anyone you will never be perfect and can always do better. If you have seen the show The Good Place there is a reference to this. Season 3, episode 9 called “Don't Let the Good Life Pass You By” there is a character introduced named Doug Forcett who figured out almost exactly how the afterlife works and is now striving for personal perfection. He eats only radishes and lentils, drinking his own filtered waste, and is a complete pushover sacrificing everything for others. Even Doug, who dedicates everything to being the most kind, charitable, earth conscious person, makes mistakes. In the episode he accidentally steps on a snail and nearly loses his mind. 

Being Financially Responsible can be like being like Doug. There is too much of a good thing and unlike being a good person with an eternal ceiling of what we can do, there is an absolute bottom to spending: $0. Which is completely unreasonable and unsustainable. 

Unforeseen Consequences

During Covid when we had minimal human interaction and thought it was fine and that we could handle the isolation. We didn’t realize just how crucial human contact was and what we were missing out on. We didn’t realize how much our mental health relied on social connections. Same with spending and saving. It's hard to fathom the social loss or good times missed by not spending, just like it's hard to visualize your life in 10, 20 or 30 years from now. It's impossible to know the full consequences of one's decisions. But, thanks to “Doug” we know that we can over do it. Hopefully we can each find a happy medium and not under do it with our Financial decisions as well.

If you found this helpful and would like help budgeting or investing please email me at taylormckeecoaching@gmail.com