Before we started down the Financial Independence path, my only Financial Motivation was to earn more to buy more. We had the dream of being a millionaire just because we thought that made us “rich.” Saving and paying off debt was not even on our radar. Our lifestyle was working against our goals.
Picking an arbitrary number without any backing is not a great motivator. I still want to be a millionaire, but the number itself is not our financial motivation anymore. We are focussing on the things money can unlock, vs what it can buy.
An exercise from Smart Couples Finish Rich
The first Personal Finance book I read was The Automatic Millionaire by David Bach. His book combined with Financial Samurai get credit for motivating us and our current financial situation.
After starting our financial overhaul, I started to look into David Bach’s other books and settled on Smart Couples Finish Rich. Mrs A.E. does not nerd out on personal finance like I do. This was my way of getting her involved in planning our future. We both read the book and wrote out our thoughts to each of the exercises.
I want to focus on one exercise specifically, Creating Your Own Value Circle. The main question you need to answer in this section is:
“What’s the purpose of money in your life?” – David Bach
We first went through this exercise around two and a half years ago, our results were almost the exact same. (so glad that I wrote these down and put them in the book). We did differ slightly on the order in which we listed them, but re-ordered them together after we shared our results and talked through the reasoning.
Our Financial Motivation
Security – Mrs. A.E. wrote down “Peace of Mind” and we decided security covered all of our thoughts for this value. Not long after this we started our Emergency Fund (almost fully funded!). We also put own our own home under this category, not because we think renting is unsafe, but because we both feel more comfortable in a house that is ours.
We spend a lot of time with our Family and Friends and don’t want money to be the reason we miss out on time with them. Going out to eat, vacations, ball games, and celebrating life events will always be a priority for us and our goals reflect that.
Mrs. A.E. specifically wrote out “prepare for children” under this bullet point. At the time of writing our goals down we were not ready financially or mentally for kids but we started laying financial groundwork.
Growth – We covered personal development and career growth under this bullet point. Now I can add the blog. While we are still focused on growing our careers, it is 100% financially related now. I specifically thought it would be cool to climb the corporate ladder back then but have pivoted.
Experiences – Our entire money spending philosophy has been formed around this value. Spend money on things that truly bring you happiness and systematically cut out the rest. We do need to carve out some more international travel, but we try new things whenever we can.
Freedom – This one is not a surprise for anyone who has read this site before. Financial Independence is now our main long term financial goal. This will be on our Financial Motivation list forever – once we are free, it will transition into maintaining freedom.
One thing that I found very interesting is how each one of our values ties into the other ones. Without security we can’t expand our family. Without Growth we aren’t able to pursue Freedom. All of our values are intertwined and I am glad Mrs. A.E. and I were able to combine and slightly alter our personal lists into a master list moving forward.
Why you need to find your Financial Motivation today
Money can cause a lot of problems in a relationship if you don’t agree on how it should be deployed. Develop a plan together now.
This quote is at the end of the chapter:
“because you can’t plan where you want to go until you know where you are starting from”
If you haven’t defined money’s purpose in your life, take some time to find your values. If you are in a committed relationship, do these exercises together. Since I primarily manage our money, getting Mrs A.E. involved made sure our goals were aligned.
I highly recommend getting David Bach’s book and going through the exercises. The book is aimed at couples, but the majority of the exercises would benefit anyone.
Thanks to Matt @ Distilled Dollar for motivating me to finish this post after his review of Bach’s book, Smart Women Finish Rich. It was in my drafts folder way to long!
Some products that can help you:
Personal Capital: Personal Capital has a ton of great Free features, you can track your spending, net worth and even analyze your portfolio. It has top notch security and I am able to connect all of my accounts. Saves a ton of time! (I may be compensated if you use this link)