I suspect our current 40 hour work week will end sooner rather than later. Not that we’ll be expected to work 50 or 60 hours per week (as some people do now), but that eventually we’ll all be self-employed or work 15 hours per week for an employer. Studies show that full-time employees only work 15 hours per week anyways, and companies will not be able to sustain the labor costs indefinitely.
Companies direct their money as they would direct employees, and we should all do the same; be our own Chief Financial Officer (because we are).
I encourage people to think of their money as employees; all tasked with different jobs that must be done. If you have an employee who doesn’t do the job you have asked him/her to do, you eventually fire the employee. But we don’t do that with money. We let our money do all kinds of things (I call this “wandering and squandering“) and this continues until there’s a new boss – aka spouse – who wants things to change.
Task your money with jobs:
- Some of your money has to pay the bills.
- Some of your money must provide a safety net in case you can’t work, or the earth opens up and swallows your house (which may not be covered by insurance).
- Some of your money has to wait to be used. This is your patient money, your practical money, your future self’s money. If you do not save for your future self, that’s kind of mean to future yourself. Your current self / current money must not be allowed to get more attention than your future self / future money. As my 11-year-old would say, “That’s not FAIR!” (Right now my future money is fighting with itself: it wants to send me to India for a financial planning conference and it also wants to go into my Roth IRA.)
Occasionally you must perform an employee evaluation.
Is everyone doing their job? Doing it well? Who is slacking? Why are they slacking? Can they be groomed to do better?
If your money is not doing its job, you’re just going to have to find new money to do it. It’s not personal, it’s business.