If you are like me, you may enjoy reading financial blogs occasionally in your downtime.
Why?
Partly because I’m on my own financial independence journey, and partly because I was curious still even after I became aware of my own financial literacy needs 7 years ago after my 2nd child was born, and frankly I find this lifestyle and mindset fascinating.
Anyway, there’s no harm in building up one’s knowledge in finances, and here are a few things I learned in the past week from reading blog posts from financial writers, all in a condensed manner.
- Building Wealth Is Important, But So Is Your Present
The commonly brought up issue with the financial independence movement with the plan for optional early retirement is the loss of time in your early adulthood from your twenties, thirties, and some even into their forties from hustling work and saving aggresively, instead of spending those time doing things like travel, eating good food or buying certain things that bring you and your family joy when you are at your prime.
We often think of the big gain we will harvest in the future, more than the gain in our present.
It may be the issue where we only think of money and early retirement as the main goal and investment, but we forgot that time itself is an asset and needs our investment too.
It’s better to have some balance, figure out what brings you and your loved ones the most joy, and choose to spend on those occasionally.
Trim off everything else that doesn’t matter; those can be removed from our lives, and avoid spending hard-earned money on them.
For example, I do not care too much about shopping, specifically for clothes, shoes, or bags, or gadgets. But we made sure we bought a safe car with 6 airbags because safety is important to me especially with three young kids, and we kept only one car for the past 10 years. My husband and I are also foodies and we enjoy food, and occasionally we would dine out at upper-end restaurants on date nights, especially after we had become more comfortable in our income level.
For my kids, we selectively spend on books, as they enjoy reading, and it’s a good habit to foster. We try to get them cheaper from online purchases and the rest from the local bookstores. We also do not skimp on nutrition, and we eat fruits and vegetables daily, with protein in every meal.
Because health and knowledge are an investment for their/our future.
With this, I do not feel like I’m missing out too much and still get to enjoy some pleasures with my family. - Sustaining A Good Financial Lifestyle Is More Important Than The Mathematics Of Gaining Wealth Fast
I used to think Dave Ramsey was extreme in his advice. He is a well-known financial advisor in the US and has his own radio show and YouTube channel on the topic of personal finance. He encourages those in debt to stop everything and aggressively start paying off all debt from smallest to largest. To the point of cutting credit cards in half or eating beans and rice daily, and taking on a second job as soon as possible to increase their income streams.
the In his baby step number one, he advised to save at least USD1000 in their emergency fund, which in my mind was too little.
But then I realised his message was addressed to the general public who were in poverty, having bad financial habits, and didnt have much knowledge in personal finance.
Basically, these were people who found it hard to stick to a budget and were weak to overspending. So even if it made more sense to pay off higher interest loans first, the problem was that they couldn’t sustain this saving lifestyle for long term. Paying smaller debts were easier and motivated them to continue their debt payoff after hitting the smaller milestones.
In the end financial habits are personal to each person, and it is better to have a sustainable lifestyle with good money habits when paying debt and accumulating wealth, instead of having grand plans on how to build wealth but have your determination fizzle out 6 months down the road. - Selective Spending Makes More Sense Than Cutting Everything Out
This one is similar to what was written in point 1, reminding you not to forget to enjoy your present. If you really enjoy a cup of coffee from Starbucks once or twice a week, go for it. If you are really into fitness and going to the gym gives you some relief from stress, and you have a community of friends there, why cut it out completely?
Especially if there is room in your budget for it.
Kids wanting an ice cream night out? Sure. You enjoy going to the cinema with your significant other when there is a long awaited movie released? Yes.
While in other areas of your life you are continue making wise financial choices, you are still making most meals at home, avoiding large impulse purchases, and making 90% of your coffee consumed at home at lower cost.
At the end of the day, choose to have some pleasures that make you happy while still having the wisdom and self-control to continue saving, earning better by leveling up at work, and building your savings for the future security of your family.
It will still math out in the end, albeit slightly slower, but you enjoyed your journey and were not in constant hard saving mode, which may make some people feel left out in their experiences and may even become demotivating, having a somewhat ‘miserable’ lifestyle to keep up month after month to years.
Figure out what works for you, and you don’t necessary need to cut out everything in your lifestyle to reach your financial goals.
Those are the three topics I read up about the last week, during my lunchbreaks at work when I wanted to have some quiet time on my own.
Hope above helps give some perspective on how you want to go about your own personal finance journey.
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