Communicating about budgets: the end and the wayPosted: September 23, 2014
Communicating about finances is something every partnership* needs to work on. The Alchemist and I are no exception. For us, we struggle explaining our individual perspectives without letting too much emotion get into it. Charged words like wasteful, deprivation, and other things come into the mix.
The journey to financial independence is just that: a journey. And with any journey, the way is just as important as the destination. There’s the post-FI lifestyle, with little to no required work. Lots of travel, if that’s your thing. The freedom to work on hobbies. Learn subjects with little to no economic viability. My vision of retirement is busy, but it’s a great kind of busy.
Sometimes it’s easy to get excited about the end of the FI journey, to the point that the present is neglected. “You only live once” is an easy way to justify reckless spending that’s both financially and environmentally destructive, but the literal meaning of the phrase is correct. We only have one journey on this planet (that we know of) and even the most optimally aligned vision of human flourishing requires material nourishment.
The typical form this discussion takes is wants versus needs, but portraying wants and needs as simultaneously dichotomous and clearly demarcated is counter-productive in our first-world abundance. For the vast majority, satisfying survival needs is trivial. What’s far more challenging is keeping your money outflows aligned with your personal values. If you successfully do this over the long term, the need to budget disappears, deprivation is never felt, and you can honestly say you truly have all that you want – even if, in many cases, you spend very little.
Communication is essential to align your mutual values, both values of the end, and those of the journey.
Values of the End
- Freedom. This is what financial independence is all about. Someone with enough money, invested correctly, can say F-You to wage slavery.
- Self-Actualization. For ourselves and especially our kids: a life of no regrets. Mistakes will be made, but they will be learning experiences, not decisions which shear off entire possibility spaces that we wish we could have explored.
- Sustainability. Freedom should not be attained on the back of irresponsible environmental practices. We are “free” to shit where we eat, but the long-term effects of pollution and the squandering of resources drastically narrows future generations’ degrees of freedom. At the same time, emotional hand-wringing about every last decision cripples decision making. In this case, freedom and self-actualization trumps sustainability.
Values of the Way
- Mindful spending. Our wants aren’t perfectly aligned with our earning potential and the primary end goal of freedom. So we track everything to make sure advertising and misaligned appetites aren’t causing us to self-destruct.
- Knowing the material requirements for flourishing. Just as leisure time is a relatively recent concept in human society, human flourishing requires something above basic survival provisions. Establishing just how far “above” is the challenge. If you’re not already familiar with them, learn about concepts like lifestyle inflation and hedonic adaptation. They are why phrasing things in terms of needs versus wants is perilous for the end goal of freedom. What feels like a ‘need’ is often nowhere near the baseline, and is in fact far above the baseline of a more enlightened view.
- Honor each other. If one partner does the spending tracking, share the results of your mindfulness with the other. Propose (and be willing to accept) changes either way. We recently discovered the need to change the way our personal spending money was funded to keep each other happy about the length of time it took to save up for large hobby purchases. I also added another “sinking” fund which will be for gifts, and to capture any spontaneous spending or surplus above and below our $600 of “necessities” spending.
- Alcohol. It feels weird to give a chemical substance its own value, but there it is. We go back and forth on this but currently the taste of a good adult beverage enhances our life more than the health and financial costs. My position on alcohol over the past year’s journey is probably the most tortured and contradictory of anything.
Freedom is what we’re all working towards, but a freedom worth earning takes harmony to achieve. That’s why the values of the journey are so important. Your life shouldn’t change much on reaching FI, it just gets bigger. The black hole that is most jobs related to personal development collapses and the interests and desires you’ve cultivated get to stretch their wings and fly.
*I’m not trying to ignore single folks, but it’s just not a part of my adult life experience.