I read an article recently by Live Free MD, via the White Coat Investor. It was about Financial Indpendence being a continuum, not a specific number. In other words, it’s not something you reach all of a sudden; as your portfolio grows your goals should grow with it.
I like Live Free MD’s philosophy on money, and you should head over to his blog if for no other reason than to read about how he paid off $400,000 in debt in a few short years.
His post on Financial Independence being a continuum was a fun read that laid out fairly specifically his goals at different stages of his net worth. He is absolutely dedicated to reaching FI, and it was interesting to see how he laid out specifics for what he would do at each stage, especially in regards to how much vacation he would allow himself if he was at $0 net worth vs. $500k net worth and beyond.
What was even more interesting than his specifics, however, was reading the comments below them. Time and again, I saw comments imploring him to take more time off than he was allotting himself. Their reasons were varied, but most of them came back to the morbid (but nevertheless true) point that you just don’t know when your time is going to come up, and living your life depriving yourself of certain pleasures because you want to be debt free or financially independent by some arbitrary age you’ve chosen is no guarantee that you will live to reap the rewards of reaching your goal. They have a point.
It got me thinking about our own situation, and we asked a question:
Are we depriving ourselves of enjoying life by stressing too much over our financial goals?
Let’s look at our lifestyle. We live in a 900-square-foot, 2-bed, 1-bath house. It’s bigger than an apartment, but it’s a tight squeeze with a cat and a kid. (EDIT: Our living situation has changed, and will be the subject of an upcoming post). We don’t go out to eat very often, choosing instead to save money by cooking at home. We only take 2 or 3 trips a year that require time off for work (but squeeze in weekends out of town more often). We turn down friends a lot when they want to get together to do something that’s going to cost much money.
I mean, just look at the examples above and think of all the sacrifices we’ve made!
If you couldn’t tell, that last sentence was dripping in sarcasm. We aren’t deprived. Sure, we’ve taken some deliberate steps and made some choices when it comes to our finances that have forced us to prioritize where our money goes each month, but the truth is we haven’t had to make any real sacrifices.
We don’t ever worry about where our next meal will come from. We’ve never had our power or water shut off. We have an emergency fund that would last us about 6 months if we somehow suddenly lost both of our incomes. We are also fortunate that we have immediate family that would also be willing to help us in a true financial pinch.
So, are we depriving ourselves? The answer is no, we’re not, and that then begs another question:
If we’re not depriving ourselves, should we be?
This is harder to answer. There can be good arguments made both ways, but we lean towards the “Everything in Moderation” philosophy. That goes for loan payments and vacations.
We are by no means what I would call “big spenders” when it comes to vacations, but we did take 2 what we would call “major” trips in 2016 that cost us a total of about $4,000. That money could have been well-spent being put towards our loans instead, but at what cost? We made memories on those trips. Would we have remembered that one extra loan payment with as much fondness? Highly doubtful.
Every financial decision we make comes back to the question this blog was founded on: “How will this affect our loans?” The answer isn’t black-and-white. It’s a continuum, much like Live Free MD’s Financial Freedom philosophy. Sometimes on that continuum a decision will make a large positive impact on our loans, and a minor negative impact on our happiness. Other times it will be a minor positive impact on the loans and a major negative impact on our happiness. It could be totally reversed, and make a minor negative impact on our loans but a huge positive impact on our happiness, and even vice-versa.
So what’s the answer?
The trick is to find the right balance that keeps us focused on the overall goal while allowing us enough freedom to not feel overwhelmed. We’ve found that the right mix so far keeps us feeling slightly uncomfortable and reasonably pressured most of the time to keep focused on the loans, but allows us moments of mental-relief. Those moments may come from a night out at a reasonably priced restaurant to a weekend-getaway or even a longer trip that we’ve planned ahead for and had to look forward to.
It’s true that you never know when your time will come. I think back to a quote I’ve heard my Dad mention before, “Dream (or plan) like you’re going to live forever. Live like you’re going to die tomorrow.”
I’m not sure where that quote originates, but it reminds us that life is meant for living! Paying off our loans is important – the most important financial goal we have right now, in fact – but I tend to agree with many of the comments on Live Free MD’s post that 110% commitment to one goal is a recipe for unhappiness.
Then again, he has his student loans paid off and we don’t… so what do we know?!
What are your thoughts? Do you deprive yourself until your goals are met? Or is taking a little time to enjoy life okay, even if it means making financial decisions that aren’t in your best interest? Let us know in the comments!