How To Avoid Money Misery

Freeing Yourself To Live Better

Ten years ago, I was living with 2 babies and a preschooler.

I found myself obsessed with our family budget and noticed a feeling of obligation building.

Obligation can be a seed for resentment. We use the mantras from last week to reduce resentment between families.

What about when the call is from inside the building?

What if the problem is me?

I found the antidote is complicated.

• We can’t opt-out of parenthood

• We make money the scapegoat

• We are tempted to blame our partner

What helped?

1. Ditch situations that trigger envy

2. Understand a young family is stressful, and temporary

3. Recognize your partner as an essential part of the solution

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Looking Deeper

Lower the temperature and take time to assess my true needs.

• With little kids in the house - sleep, exercise and time alone

• Another list - serenity, connection and health

Not sure? Try this exercise.

Blank Sheet Living…

Based on where I am today, where would I like to be in five years and what’s it going to take to get there?

Do you have an idea of your true needs? They’re probably not financial.

Next Level: once you’ve identified your needs, take a time and spending inventory.

Needs - Time - Spending

• Are you aligned?

• Is your family aligned?

• Does your family know your needs?

• Do you know your family’s needs?

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Is More The Answer?

It’s tempting to think that more money will result in less conflict, and more pleasure.

I haven’t found this to be the case.

The habits that lead to conflict follow us up, and down, the socioeconomic ladder. However, if I can learn to deescalate in one area then it will follow me everywhere.

De-escalation, and redirection, are two of my favorite parenting skills.

You’ll see I used them above.

1. My Parenting Partner is essential to get through my current challenges

2. What actions do I need to meet my core needs?

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Two Tactics To Lower The Temperature

I’ve been running my financials since I was 16 and managed to save 50 cents of every dollar I earned from 16 to 40 years old.

I highly recommend being tough on yourself when you’re young. You can handle it and your future self will thank you.

My first job out of college was in finance. My mentors made two observations that stuck with me:

• From the Managing Partner, “We could keep a better eye on the small stuff but it would make this place less fun and it wouldn’t make any difference to my financial life.”

• From a Young Up-and-comer, “If you ever want to get someone then start by auditing their expenses.”

Apply these to myself:

• Make sure my choices can survive an audit

• Being a stickler for detail makes everyone miserable

As a leader, what does that actually mean?

In 2009, unexpected unemployment left my family facing a financial crisis. I started by cutting my personal budget by 80%. I laid that out to my wife and said we needed to cut our family budget by 50%.

We made a budget, implemented the changes and went on with our lives.

Good enough was good enough.

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Getting The Big Decisions Right

Often fear drives our attention to fine-detail.

It it is difficult to transcend fear-based habits.

Two things to help:

1. Implement A Give-A-Hoot Threshold

2. Learn To Pause

Each year, I set a dollar-amount that is my “give a hoot” threshold. If something is below that threshold then I promise myself that I_will_not_give_a_hoot.

My total spend in the “give a hoot” category is ~2% of my total budget. The 2% spend cuts 90% of my external annoyances and gives me credibility when I say “we don’t have the money for that.”

Not getting wrapped up in the little stuff makes my internal life better and gives me the authority to direct the big stuff.

This policy is a bargain.

When something big pops up, I pause and distance myself from the decision.

I’ve set my financial life up to create friction in my ability to spend money. The friction gives me time to ask…

• What’s the goal?

• How does this choice benefit my family, my marriage, myself…

If it won’t make a difference then wait.

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A Final Test

Am I willing to spend this money on someone other than myself?

I do a lot of waiting and that’s OK.

Your spouse, your kids, your unborn descendants… will expand the spending habits you create, and sustain.

Financial values scale across generations.

By meeting your core needs, you’ll find it easier to let others “win” the game of external consumption.

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