I was listening to the Afford Anything Podcast recently and in the episode Paula Pant said something to the effect of: This is a self-improvement/mental health/life coaching podcast disguised as a financial podcast. This is truthfully one of my favorite parts about learning more about financial matters and looking to optimize my finances. In learning how to optimize my finances I am encouraged to learn more about myself.
I have been thinking a lot about this correlation of optimizing my finances and getting to know myself as I have been continuing to clean during quarantine. Yes, I am still cleaning, and I still don’t want to buy another thing that is not consumable. The first thing I found that got me thinking along these lines is a model car kit still in its shrink wrap. I have owned this item for over 20 years and have never opened it. I spent my hard earned money, or potentially had my family spend their hard earned money (it has been so long I do not remember how I acquired this item) for something that I have never even opened.
To my now thirty three year old self it is easy for me to know why I never opened the model. I am not a huge fan of putting together intricate/highly detailed physical items. I will spend hours on a computer making detailed/highly formulated spreadsheets, but am not a huge fan of doing similar things in the physical world. There is a reason I stick to carpentry in the theatrical world, as a whole we work with large objects that afford some forgiveness.
The second item, or in reality items, that got me thinking of this correlation is that I have found at least six journals while cleaning and organizing. Now, these are not five journals that have been filled with a sixth journal that is currently being used. No, these are six journals that all have at most ten entries each. In other words, each journal is only an 1/8 of the way full. Moral of the story: I am not a person who journals, but for some reason in my younger years I kept buying journals. I even have an app on my phone, The Five Minute Journal, that I paid for after listening to a podcast of a person whom I respect who said they used it. As with my paper journals, I have made an entry maybe thirty times total.
Knowing yourself not only applies to helping you decide what to spend money on, but also influences how you earn money. One of the goals of my cleaning is to clear out a room that had become a storage room in our house. It was easy to quickly clear out two larger boxes in that room when I got honest with myself and admitted that we were not going to have a yard sale at our house. In my entire life I believe we have had one yard sale and I think we took stuff to a friends yard sale one other time. That is not to say I do not enjoy selling things. I have so far sold about ten items on eBay that I have found while cleaning. I enjoy being able to spend five to ten minutes to list something and then go about my day. I am not a huge fan of the effort of setting up an in person yard sale, especially when many of the items in those large boxes would have only sold for $2-3.
Knowing myself also influences what items I keep as I clean and as I acquire new items. I recently purchased protein powder and it came with a free water bottle which was very beneficial as I had planned on purchasing a new bottle when REI opened (I lost my old bottle). When the free water bottle arrived, I realized that it was designed to be a fruit infuser bottle and had an insert. I was tempted to take out this insert and place it in a drawer, but then I thought about what I know about myself. When I have a dedicated water bottle I only put plain water in it, I do not use the bottle for anything other than water. Likewise, while I enjoy fruit infused water when it is set out at hotels, I know I will not take the time to make it. Combining my knowledge that I only put plain water in my water bottle, as well as that I would not take the time to cut up fruit to place in water, I got rid of the insert. This also served my goal of having less items in the house.
I feel this process of knowing yourself is the next step in financial independence. When you are just starting out and eliminating debt, trying to get your head above water, or just figure out where your money is going, the financial journey is truly all about the numbers and the cash. The focus is all on the spreadsheets and only spending money on necessities. As anyone can tell you though, this is not a sustainable way to live for numerous years. It serves a very important purpose, but what happens once you are out of debt, have an emergency fund, and are maxing out your retirement accounts?
This is where knowing yourself truly shines. I feel I beat a dead horse at times, but frugality is not about not spending money, but about spending money on what makes you happy. I will gladly spend $300+ on a meal at a three star Michelin restaurant because I adore good food and good wine. I will not however spend a ton of money on cars because I know nothing about them and to me they just serve a function of getting me from A to B.
Society will try to tell you you need the biggest house, the newest car, the fanciest clothes, but I encourage you to spend some time getting to know yourself and ask yourself will those things make you happy? While I am still not great at the Marie Kondo method of holding items and asking if they make you happy and then discarding the ones that don’t, though have gotten a lot of practice recently, I feel this is a great thing to not only apply to what you already have, but what you are looking at purchasing.
If I had to make a TL;DR of the above, which I feel I do as I feel I rambled a bit: Once you reach a certain point in financial independence the focus should shift from being all about the numbers, to being about you. While the numbers are still important, the purchasing decisions can move from “How much is this item?” to “Why do I want this item and how will it make me feel?”
Disclaimer: I do want to make the caveat that I am not saying to not try new things. I would just encourage you to try them through a frugal mindset which I will talk about in my next post.
