How to Balance Life and Money

In the personal finance world, we talk a lot about strategies and tactics for paying off debt, making more money, saving, investing, taxes, etc. What about how to balance your life with your financial goals?

It’s arguably the most important thing to master in our personal finance journeys.

It doesn’t make sense to put life completely on hold until you reach your financial goals. The whole point of your financial journey is to make life better, right?

The marathon of debt reduction

We all know that keeping up with the Joneses is bad. It’s like personal finance 101.

“Don’t buy things you can’t afford with money you don’t have to impress people you don’t like.” We hear it all the time.

The thing is, in this personal finance world, it’s easy to get caught up keeping up with the “good” Joneses, too, i.e., the people who are killin it financially.

I consume a lot of personal finance content, from listening to podcasts to reading books and blog posts. Lots of people have already completed their debt free journey or have achieved financial independence.

I look at what they’ve done and sometimes compare it with what we’re doing and feel like we’re not doing enough. We’ve paid off a huge boatload of debt so far, but I keep having this feeling that we could be doing more.

It goes back to something I said before about not comparing your middle to someone else’s end.

The thing is I only see the snippets of life that those people choose to share. I don’t know what else they have going on.

I mentioned in this interview that one thing I’ve struggled with during our personal finance journey is maintaining balance.

That can be really bad, especially when you have as much debt as us. This has to be a marathon not a sprint.

Regardless of what anyone else did or is doing, it’s important for us to have balance and live life in the process to make sure that we maintain our focus and actually stick with our goal.

Frugal living and stealth wealth

I read an article last week about a legal secretary who secretly amassed millions while living an unassuming life in Brooklyn. She worked until age 96 and died shortly after retiring, at which point her fortune was discovered.

This isn’t a new phenomenon. There have been quite a few stories over the years of people who were secretly wealthy in their lifetimes. A number of them are popular finance bloggers. 🙂

One thing that really struck me about this secretary’s story is it doesn’t sound like she lived at all.

I recognize that the focus of the story is her stealth wealth, but working until age 96 and trudging through snowstorms to get to work at that age don’t sound attractive to me.

The beauty of having money is that it buys back time.

What is all of the saving and investing for if we don’t do anything with it?

I know everyone will manage their money differently (and honestly I can’t say too much because she clearly was doing something right!), but I’d love to know that she took a nice trip or two, took a sabbatical, or took advantage of some other opportunity that the money afforded her.

Also, I love that upon her death she gave money to organizations to help the needy, but what about all the people she could have helped while she was alive?

The idea of building wealth just to have wealth doesn’t sit right with me.

Live a little

I’ve talked before about the importance of your “why” when you’re setting financial goals. Your “why” is the thing that keeps you motivated when you’re ready to give up.

In reaching our financial goals, yes, we should be responsible. We should save money. We should pay off debt and invest, but we have to remember why we’re doing those things.

For most of us, it’s to make a better life for ourselves and our family.

We can’t forget to live in the process.

Granted, there has to be some level of “sacrifice” because every choice we make is a tradeoff. I’m choosing not to buy X so that I can save that money to pay off debt/invest/save/insert your financial goal.

That sacrifice doesn’t mean that our quality of life has to suffer until we reach our ultimate goal.

How to balance life and money

Life is all about our relationships and spending time with one another, creating experiences, and making memories.

Money allows us to buy back our time so that we can spend that time doing what really matters.

At the end of the day, everyone has to do what works best for them. Everyone will manage their money in the way that they think best, but I think that in addition to paying off debt, saving, and investing, we also have to live.

Here are a few questions to keep in mind to figure out how to balance life with your financial goals:

1. Will this make me happy? Think about whether the decision will make you happy in the long-run, not just the short-term.
2. How does this fit with my “why”? It all goes back to the reasons behind your financial goals. If this decision doesn’t align with that reason, maybe it’s not the right one for you.
3. How will this impact my long-term goals? This one goes beyond financial goals. Maybe the decision concerns your career path or your family. While tied to your finances, these are distinct areas of your life that are not purely financial.
4. How much will this delay my financial goals? If the decision requires you to clean out your savings and cash out retirement, for example, maybe it’s not the wisest choice.

All in all, I just don’t want you to get so caught up in the finance part that you forget about the living part. Balance and living life are important.

Be sure you’re enjoying your life in the present and not only living for the future.

How do you balance your life and money? Are you living life in the present or only living for the future?