When I first wanted to start talking about the idea of financial independence with my wife I was hesitant because I thought she would think the idea was a little bit crazy or unattainable. I worried that if I took the wrong approach she would be turned off to the idea especially if she perceived it as simply involving not spending money on anything and living as cheaply as possible. So I decided to give her a book, Your Money or Your Life, and asked her to read it and then see what she thought of the idea from that perspective. It turns out that the approach the book takes resonated with her especially when it comes to thinking about the value of what you choose to spend money on versus how much of your life you spend to acquire or do something that costs money. In fact I think the book was one of the reasons she started to think about all the costs associated with working at her former job and this helped her to pull the plug on that and start working for herself. One of the key points presented in the book is not to deprive yourself of everything by spending as little as possible, but only spending money on what you truly value. We like that approach because everyone has different things they value and that means that everyone’s plan is a little bit different; you simply cut out spending that does not really give you value. When we started to consider what we value we found it was not items, but rather experiences.
One example of this which others might think is wasteful from their perspective, is that we love going to Disney World, especially since we live so close. At our peak we averaged going to one of the parks at least twice a month, sometimes more, although since moving to North Carolina we have cut back on the amount of time spent there significantly. There is no doubt that we spent a fair amount of money on this, but we valued and enjoyed the experience, especially seeing our children light up when she meets a favorite character or watches the firework shows. The challenge of course is that Disney is built as a marketing machine so while we value the ability to go to the parks, it takes a lot of effort to resist the constant marketing to buy and consume as much as possible while you are there. Most of the time it is fairly easy for us since we go so often and know what to expect and exactly what we want to get out of the visit. When we lived in Florida and were only about an hour drive away it makes it easy to go for just a few things and then leave once you are done. I could write several posts about how to maximize a visit to Disney World, but really unless you live as close as we did, and benefit from the Florida discounts, it is hard to imagine keeping the costs too low for an activity and place that is designed to get you to spend. I guess the key for us was to be aware of the costs and know that we are getting value from what we decided to spend. Now that we live a few states away, we spend far less time visiting Disney, but we still go several times a year. Most of the time it involves staying with family and going at times when costs can be controlled.
Disney is just one example of experiences we value and are willing to spend a certain amount of money on each year. I decided to write about it because many have expressed strong opinions on whether doing something like this is wasteful, or slows down the path to FI. For us this just points out that our values, whether others agree or not, is shaped by what we want to experience and the tradeoffs we want to make. In addition to Disney we typically do a lot of traveling, although we do take advantage of travel hacking with points and miles to keep costs low, and I will be honest I have a lot of travel paid for by my career (conferences). Usually I bring along the family, but aside from that when I have travel paid for by others, I can accumulate points and miles for travel on my own later! When it comes to prioritizing our spending we are willing to spend money on activities for our children that we are unable to provide or teach them ourselves especially if they enjoy the activity and we feel is important to their development and enjoyment.
Too often when talking to others about FI or when reading other sites and blogs about financial independence, personal finance, or being frugal they can come across as condemning or shaming others if you spend money on anything other that was is absolutely essential to live. While I agree that the vast majority of people overspend it is typically because they don’t think about the value that get both now and in the future from their spending choices. We are acutely aware when we spend money that it impacts the amount of time until we can reach financial independence, but the important thing is that we make conscientious choices on what we spend money on based on the value that it gives us rather than simply spending without thinking about it. Every choice and decision you make is going to have tradeoffs, but the important thing is that you understand and are aware of what those tradeoffs are right now and how they impact your happiness in the present and in the future. If everyone took the time to understand how spending and saving impacts their future it would lead to a lot more emphasis being placed on spending on things you truly value and need as opposed to wasteful unconscious spending.
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