Your coffee habit isn’t sabotaging your retirement, your mindset is

When I first got married to my wife Samantha, one of the first things we argued about was money.

For 5 years I’d lived on my own and managed money my own way.

Now I had to invite someone else into the process.

Naturally, I was pretty frugal (cheap, lazy, or whatever else you want to call it), so when she started spending money on things like decoration for the house, eating utensils, condiments and spices, I was rightly fully appalled!

(the sarcasm comes across right? I was ridiculous…)

In response to this, I implemented a strict budget.

Every time she went over, I was asking questions. Every time I went over… we’ll we’d (I’d) just move some money around.

Through this, I developed a mentality that every extra dollar we had should go to investing in or future.

As I’ve done the podcast, I’ve seen how common this mindset is.

There is all sorts of money trauma in people’s lives and it often results in negative a stigma around spending money.

But then, somewhere along the line, I was introduced to Ramit Sethi’s concept of money dials.

Instead of asking the question “where can we cut,”

we should instead be asking “what do we enjoy spending on?”

The problem with spending restriction

When we restrict our spending we risk 2 things.

First, we risk giving up something we value for the promise of future happiness. Anytime we make this exchange it is dangerous, especially when we go to the extremes. This is especially prevalent in the FIRE movement, as so many push hard today (because they hate their job) to the unknown future without work.

Second, we risk “falling off the wagon.” Has anyone else started a strict diet and then after a week or two just HAD to have that treat? When we push so hard and remove all joy, we risk burning ourselves out.

Examining the dials

Instead, we should evaluate what we enjoy spending money on and find ways to enjoy that thing.

The 10 dials Ramit identifies are:

  1. Convenience
  2. Travel
  3. Health / fitness
  4. Experiences
  5. Freedom
  6. Relationships
  7. Generosity
  8. Luxury
  9. Social status
  10. Self-improvement

I won’t break them down here, but you can learn more by reading Ramit’s article (linked above) or my Twitter thread.

We should ask ourselves, which of these dials gets you excited?

What to do next

Once we’ve identified that, we should ask:

  • Do I need to loosen my goals to allow room for my dial?
  • How can I get creative in “scratching that itch?”

See, this isn’t about abandoning your goals. Instead, it’s about finding ways to create a balance.

For me, I really align with convenience, freedom, and self-improvement. So when I asked myself these questions, it resulted in us paying for someone to finish our landscaping and mow our lawn.

As you examine these, it doesn’t always have to result in spending. Get creative and think of ways that you can enjoy your dial without spending, as well.

The reality is, if we don’t examine our lives regularly, it’s easy for things to get misaligned.

Hopefully, this exercise will help you come back towards alignment.

I talk more about this in my latest podcast episode, which you can listen to here.

If you want to better understand financial statements, here are 3 ways I can help:

  1. Purchase the Financial Statements Decoded eBook.
  2. Join the Financial Statements Decoded cohort waitlist (next one in January).
  3. Get one-on-one consulting on your financials and make more money (Booked through December 2022).

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