I recently had a booth at a business fair. At my booth there was a bowl of pennies. Each passerby could drop a penny into a cup that represented what they felt money meant to them (freedom, complexity, security, power, greed etc…). One passerby took two pennies and put one in the “freedom” cup and one in the “security” cup and then stated that they were the same thing; they are two sides of the same coin.
(The majority of pennies were in the “freedom” cup at this event, but I had the same set-up the day before at an all-woman event and the majority of pennies went into the “security” cup. Just sayin’.)
We financial planners are often tasked with helping people have “enough” money; to retire, send their kids to college, provide for their families etc…to have “enough” to have the freedom to make choices. Those who are constantly concerned about having enough never feel secure; they are always in fear. Yet there is another group of consumers who do not seek out financial advice because they may be on a spiritual path and feel they have “enough” (or, at least, try to feel as if they have enough). They may feel secure and free – whether they actually are or not.
It’s one of life’s dichotomies: We want to feel as if we have enough…but worry that we may not. We want money but we don’t want to want it. How can we live for today while at the same time plan as if we’re going to live another 50 years? How do we reconcile these two sides of our life’s coin?
Well, read my (soon-to-be published) book! Aside from that, I challenge you to think of money the same way you would any another commodity, let’s say sugar. Depending on how much sugar you actually consume, you may or may not have enough. For instance, if you like to do a lot of baking, you may need more sugar in the house than someone who doesn’t. If you estimate incorrectly and run out, chances are you could ask a neighbor or friend for some to tide you over until you could get more.
Uh-oh, what if you’re not the type of person who feels comfortable asking for help?
What if you have no neighbors or friends who have sugar to share?
What if you had to -gasp- do without some sugar until you could procure more?
What if you become sugarless?
Okay, I’m being a little cheeky because I want you to be able to think of money without thinking of it as money because, frankly, most people have a hang up about money. At its very core, money represents something of value that you exchange for something you want or need. It’s that simple. Before money, people just traded goods or services but eventually it became difficult to reach a fair trade. For example, if I’m really hungry and all I have to trade is my engagement ring, I’d have to arrange for a certain number of meals before it could be considered a fair exchange of value. Money helps us trade on a regular basis. We trade time and work for money and then trade money for goods and services, from which people receive our money to buy goods and services for themselves from which others receive money and so on and so on. This is economics 101. (The main reason why our economy is in the dumper is because people who are out of work don’t have money to exchange for goods and services and so the whole cycle breaks down.)
So, how much is enough? Well, that all depends on how you define “enough”. What kinds of goods and services do you need and want? Will they likely stay the same for your lifetime or will they increase or decrease in terms of cost? Some simple (and, to be fair, some complex) math can help determine if you’re setting aside enough sugar for all of your future baking needs. And, don’t kid yourself, if you like brownies today you’ll like them just as much 25 years from now. You may have to enjoy fewer brownies today in order to have enough sugar to make brownies for years to come.
How can you feel as if you have enough? First, you have to believe that you have all you really need and anything else represents a want that can be controlled with a little self-awareness. No one needs a batch of fudge brownies (although it may feel that way sometimes).
Security comes from self-awareness, self-stewardship and self-care. Freedom comes after you’ve taken care of these three. Financial life planning can help reconcile these two sides of your life’s coin.