Financial Independence Starts With One Important Question
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It’s funny; when I think about financial independence, I recall an ordinary conversation I once had with a group of moms. We were talking casually about child-rearing when one of the moms made a statement I’ll never forget. We were discussing an area of child-rearing in which there is some semi-serious debate – sleepovers. As the group of us talked about parenting, the subject of sleepovers came up, to which I quietly admitted that we don’t allow our children to take part in sleepovers, either at other’ houses or here at our house. I was quite excited to hear this other mom say that they didn’t “do sleepovers” either, as we seem to be the exception in the parenting world rather than the rule regarding this subject.
When I asked this mom why she didn’t do sleepovers (in an effort to see if her reasoning was similar to ours), she said:
“Because we just don’t see the value in them. Whenever we make a decision regarding our children, we always first ask ourselves whether or not there is any value in what we’re considering doing.”
Wow. How many people, no matter what the decision, ask themselves that question? I know I don’t. Or at least I didn’t – until then.
That profound statement in the midst of a casual conversation has stuck with me, especially as we complete our first year on our journey to become financially independent. More than ever, it has become a question that I find myself coming back to.
How the Value Question Helps Us Achieve Financial Independence
It’s often been said that what determines whether or not a person will become financially independent is not how much money they make, but how much money they keep. Since this truth is now ingrained in our brains, we can’t help but ask ourselves, when faced with spending money, what the value is in what we’re considering buying.
For instance, on the way home from the grocery store early this morning, I was beyond hungry. The Golden Arches, conveniently situated right next to the grocery store, were calling my name. On the surface, this decision didn’t appear to have anything to do with financial independence, but as I thought about what value that meal deal purchase would’ve added to my life, I could think of only three things:
1. Wasted money
2. Lots o’ calories
3. Higher cholesterol
After I determined that the trip to that fast food joint would bring absolutely no positive value to me, with the exception of filling my stomach immediately as opposed to 30 minutes later, I just couldn’t make the trip. I had determined that, at least for me, that purchase would only have a negative value effect on our journey to become financially independent, and therefore I chose not to spend the money.
Now on another day, my answer to that same question might have been the total opposite. If those golden arches had appeared in the midst of a busy day of running errands with our four kids, it might have been well worth the money spent in order to save my sanity and fill their tummies quickly so that we could complete our errands.
The question is not “What is an acceptable purchase and what is not?” Rather, the question is “Is this purchase of value to me and/or my family in regards to our short and long-term goals?”
Ask yourself, like I do, if the purchase you are about to make one that will push you toward your goal or away from it, and if it does, is that okay with you?
Again, I must reiterate that there is no right or wrong answer here, only a right or wrong answer for you.
Whether your goal is to gain financial independence, buy your dream house, live on a remote island, or whatever else your dream might be, work to reach it faster by making decisions that hold value – not detract value – toward your dreams and goals.
Do you have a litmus test or value statement that you run all your decisions through before you make them? What’s one of the best pieces of advice about financial independence that you’ve received?
Photo courtesy of: Josef Grunig