Financial Resiliency Series: Knowing your Why

Becoming financially resilient is really a common goal of most people and it sounds amazing, am I right?! Earning more and investing sounds great but spending less to save more might not sound like much fun. That’s why knowing your why is so very important.

One thing that has really helped me to better steward my money is to shift my mindset from that of a frugal person to one who spends on what I truly value. You can do this too.

Cheapskate vs. frugal vs. values spending

You may feel that you would be perceived as being cheap or overly frugal if you made different decisions with your spending than you previously have. Instead, let’s take a look at some definitions from our friends at Merriam-Webster to see what the actual definitions are and you’ll see that those perceptions couldn’t be farther from the truth.

Cheapskate: a miserly or stingy person; especially: one who tries to avoid paying a fair share of costs or expenses.

Frugal: characterized by or reflecting economy in the use of resources

Values spending: The value that one assigns something is related to its relative worth, utility and purpose. The tricky thing is that each person has different values. It’s one of many things that make us uniquely human. So, if you value travel but don’t place a lot of value on your personal appearance, then you would spend lavishly on great travel experiences but may look for the lowest priced eyeliner.

If you’re shopping with someone who values personal appearance, they may find it odd that you wouldn’t invest more in that area but that’s ok. We all get to be stewards of our own money and can choose our own ways of using that money.

The journey to financial resiliency is not about living a life of deprivation and just knowing that you’re spending to your values might not be enough when you’re being pressured (or even pressuring yourself) into spending money somewhere that you don’t want to.

It is much more difficult to achieve your financial goals when you don’t understand why you are working towards a goal. Or when you don’t have a clear understanding of what kind of life you want to live.

Whether your financial goals are centered around having financial security, more time to travel the world, freedom to leave your job and try something new, or retire from paid employment altogether, knowing your personal “why” is the first step.

More about knowing your why:

Finding your why is a life skill
It is something that everyone should do
It provides stability and direction in the chaos that is life
It helps you to grow by giving you the courage and stamina to endure tough challenges
It’s the driving force behind why you want to redesign your finances (or other areas of life)

It’s totally ok if you’ve been on a standard path, one where maybe you’re living paycheck-to-paycheck or only getting ahead a little each year. You can’t change where you’ve been, only where you are going. You are not trapped, there’s an offramp that will lead you down a path that is ideal for you. And it will be very different from what it is for me or for anyone else.

Over the next series of articles, I’m going to show you some tangible steps that you can take to help to achieve those goals that you outlined in your 2024 Plan. If you haven’t yet drafted that plan, take a quick read of this article and start planning.

You may be asking… “yeah, but how do I find my why?”

Well, here’s your next assignment:

What Brings You Joy

Take some time to consider some of the things that truly bring you joy in life and write them down. You can type them into the notes on your phone, or into your financial files on your computer (maybe in the same location as your plan) or just on a piece of paper, but it’s important that you write them down so that you can refer to them later. I post them up on a board in my bedroom so that I can review them regularly. If you have a spouse, this is a great exercise to do together.

Celebrate with Deb C.’s “What Brings Me Joy”

Family, particularly my teenage boy
Nature, any time spent in nature
Friends, fun times with friends make it all worthwhile
Spirituality and fellowship
Cooking/baking/eating healthy food
Being an active part of my community
Creating and crafting

You may have noticed from my list that it is mostly things that require my time and energy rather than money. I’m naturally frugal so that makes sense for me. Your list will look different and that’s a good thing.

Now that you’ve written your list, think about some of your recent purchases, were they aligned with what you enjoy most in life? If not, then you have clear justification to not spend money on those things. That money can be diverted elsewhere.

In my case, it was diverted into investments so that I could have enough to work less when I wanted my time to be spent differently. The spending decisions that I made over the last 5 years has allowed me to live my life on my own terms. Maybe not forever, but at least for right now when I need to. That was made possible by knowing my why.

That’s freedom. Ooh, I also value freedom.

know your why the next time you make a spending decision

Check in with your why and make sure that the item is within your values and is something that brings you joy. If it’s not then skip it altogether or find a less expensive version and redirect the dollars that you’ve saved towards your new goals. Easy peasy.

Then you celebrate that you’ve taken a great step towards financial resilience and curating the life that you are dreaming of.