Of the tens of thousands of decisions that you make each day, how many of these decisions are directly related to money?
Throughout the past year, we incurred 2,129 outgoing financial transactions (thanks YNAB for making that count easy!). That’s 178 per month and nearly 6 per day. Many of these were single-digit small payments for a smoothie or lunch. Others were 5-figure payments made to our contractor during our major home renovation.
All of these financial decisions that we made during the entire year, both large and small, determined whether we were in a better financial situation at the end of the year than we were at the beginning of the year (it was questionable after the home renovation).
Ultimately, it is a lifetime of daily financial decisions determines your ultimate financial destiny.
WHAT DECISIONS ARE YOU MAKING?
There’s no debate about whether small decisions matter. Money is a finite resource and every little bit counts. Some of the most common day-to-day money mistakes (some of which I’ve made myself) include:
- Choosing convenience over cost by eating out too often
- Choosing to spend your time watching Netflix instead of creating a budget (hey wait, I do both of these at once…they’re not mutually exclusive!)
- Choosing to put off saving each paycheck for retirement in order to buy the things you want today
- Choosing to watch YouTube videos instead of reading a few financial articles that explain the basics of personal finance (may I suggest starting with my completely free financial plan classes?)
- Choosing to buy more on credit rather than paying off the debt you already have
Big choices, of course, have just as much of an impact on your finances as the small ones. These include lifestyle choices such as
- who you marry
- whether you decide to have kids
- your career selection
- where you choose to live
In addition, directly financially related decisions such as the following also have an effect on your finances for decades. These include things like:
- buying a home and getting a mortgage
- buying a new or used car
- contributing to a Roth or Traditional IRA and HSA
- waiting to invest until you have more knowledge/time/money
Take a minute and think about the financial decisions that you’ve made recently and your current financial situation. What has led you to the point where you’re at today? If you’re financially stable, what decisions have helped you to get there? If you’re a financial wreck, what decisions have you made that have prevented you from being successful?
WHAT IS YOUR DESTINY?
I sincerely hope that you’ve made clear financial goals that match the dreams you have for your life. Your goals should be so much more than saving specific amounts of money, buying bigger and better things, and becoming rich. The key to financial goal-setting isn’t to start with money, but to start with what your purpose is in life. Is it going to require money along the way? Absolutely.
Google offers the following definition of destiny:
Who really has the “hidden” power for your future? I truly believe it is us individually. Our daily choices lead us to opportunities or lack of them.
Take a moment to think about your destiny. What is it that you want to happen in your future? What are the events that would lead you there? If you feel stuck in your current financial situation, you may need to change your daily actions that are preventing you from building the future that you want.
For me, I want to give back to others, ideally in a big way that would require a significant amount of time and money. To reach my destiny, I would need to be financially independent so that I could spend my time in charitable pursuits instead of working full-time until I’m old. This requires sacrifices in my spending today, so I can have that money for the future instead.
LINKING DECISIONS & DESTINY
It can be incredibly difficult sometimes to keep your perspective when you’re saving for long-term goals. Some of your dreams can seem so far away (either far in the future or in the amount of money you need to get you there!).
The older I get the more I see how daily decisions have an effect on one’s destination and the path they take to get there. I see this in my own life and in the lives of others around me. A person that lives a lifetime of decisions that lead them to living paycheck-to-paycheck will transition into living Social Security check-to-check later in life. The truly wealthy know the value of saving even small amounts daily to be able to achieve financial freedom and build their own destinies.
A person that lives a lifetime of decisions that lead them to living paycheck-to-paycheck will transition into living Social Security check-to-check later in life. The truly wealthy know the value of saving even small amounts daily to be able to achieve financial freedom and build their own destinies.
What are some daily decisions that you make that will determine your destiny?