financial freedom, financial peace, financial priorities, household finances, living frugal, living within means, managing money, money management, saving for vacations, vacation planning, vacations, values, values and money
We’ve been talking about succeeding with money in a household setting over the last several weeks. Two necessary ingredients for financial success that we have already talked about are regular, consistent savings and some form of budgeting (I am far from a stickler as to what form this takes – as long as it is working – be honest). Today I’d like use my family’s planned vacation as a taking-off point for talking about balance and values in spending decisions and overall household health.
As a reminder, the perspective that I am approaching finances and financial success from is that of managing money well enough to not have to always be thinking about money.
The overall goal is not accumulation, although some level of accumulation is definitely needed. Call it modest, but maintaining sanity is probably one of my more basic life goals. The fact of the matter is that you can go insane spending or saving, depending on how you approach it. Maintaining balance is paramount in avoiding insanity. Okay, everyone say with me – sanity: good, insanity: bad. We’re on the same page.
The way that we handle our money should be a reflection of what we value. Gretchen and I definitely value vacations and we try to go on one every couple of years or so. We’d love to go more, but if we did, it would be at the sacrifice of other important values. Later this year we have plans to go down to Gatlinburg, Tennessee. We’ll stay in a cabin, read, relax, do some hiking, eat, read some more…we’re looking forward to it (side note: we’ll actually spend our whole time taking care of Isa, much like we do here J).
Taking a vacation is a calculated decision; it is not an impulse. We really value getting away and refreshing ourselves from time to time. We believe that it is good for our overall health and well-being; along with our relationship. Vacations are, however, definitely luxuries and come with a price tag. Because of this, there are other things that we cannot spend money on, if we want to be able to vacation from time to time. We really appreciate eating out less than 10 times annually, not having a data plan, no cable or satellite, furniture as old as the Tennessee hills, one car, washing and re-using generic zip lock bags, etc. every two years when we are down in a cabin in Tennessee relaxing, reading, hot-tubbing (I forgot to mention the hot tub before, didn’t I?), hiking, … For some people these sacrifices wouldn’t be worth it, but for us they are.
Holding up our spending patterns against what we say we value is an important test of our financial success. The more of our lives that reflect what we define as important, the more peace of mind we will experience. Savings reflects a value for future preparedness. Eliminating debt reflects a value for flexibility and lower stress levels. Giving reflects a value for things beyond ourselves and our situations. Video games and systems reflect a value for entertainment. Eating out reflects a value for convenience and winding down. The list goes on.
At the end of the day, each of us is responsible for how we prioritize and weight our values. Your spending will look different than mine. The key here, again, is that the system works and has a good mix of long-term focus and current sanity. It is okay to have present indulgences. The key is that they fall within our plans and overall goals and that they are balanced with the overall needs of our households. Impulsive, unplanned expenses are the real enemy here. We want to always stay in control, rather than being controlled.
The other key to how we go about supporting our values is truly understanding our financial standing and, dare I say, class. Gretchen and I are, by any income standard, a lower middle class family. We can succeed financially if we recognize this, accept it, and spend accordingly. For some, a value for vacations would mean quarterly trips to Europe, Cancun, Tahiti, you name it. As long as they are not a lower middle class family, this may be fine and well. Unfortunately, a lot of us are in denial about the type of lifestyle our income can realistically support. With the availability of consumer debt, it makes it all the more tempting to get in the habit of spending above our capacity.
Gretchen and I are genuinely content without all of the amenities of life. We are okay with being lower middle class and enjoying a scaled back lifestyle. I challenge everyone to take a step back, re-assess your income and decide what types of things you can really afford over the long term. Then, (and this may be the hard part) learn to like those types of things.
If you value a nice ride, are you in the Escalade income category or the Focus income category? If you value convenience, are you in the Ruth’s Chris Steak House income category or the occasional Panera income category? If you value fitness, are you in the gym membership income category or the workout at home income category?
You may find it frustrating or unfair that you fall in the income category that you are in, but I guarantee that the sooner you make peace with this from a spending standpoint, the happier you will be. Really, all of us are very blessed to enjoy the lifestyles that we do have. There will always be something more that someone else will get to enjoy and there will be many things that we enjoy that most people in the world would never fathom having access to (like our vacation).
Does your spending match your values and income class? Obviously, you can always cheat a bit in one area, if you are willing to live significantly below your means in another. Finances, in many ways, don’t lie. If we are out of touch with our means, things will get bad quickly. I encourage all of us to continue looking at how our values and priorities inform our spending. Is what we are doing sustainable?
Money is and will always be just money. Make sure that it is supporting the things that are truly important to you and your family.
Where do you cut corners? What are saving up for?