You’ve heard this exchange between Alice and the Cheshire Cat:
“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where –” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
…but you may not have thought hard about the budgeting implications of their conversation.
I think I’ve said it before: budgeting only makes sense to me in the context of a single, unifying goal against which all other consumption competes.
That’s why I think it makes the most sense to work on one financial goal at a time. If you have multiple discretionary goals competing for your dollars, you’re fighting a war on multiple fronts (which the last decade has reminded us is difficult, and typically results in massive debt).
But it’s hard to establish that unifying goal, and maybe even harder to commit to it wholesale.
Take the family I’ll feature in tomorrow’s budget review. I’m calling them Fred and Ethel, because, yes, it’s getting hard to think up new pseudonyms.
I’ve exchanged twelve or thirteen emails with Fred, and it wasn’t until the second to last that I uncovered his and Ethel’s unifying goal:
“We are not sure on the retirement age. We have not thought about it all that much. I would *love* to retire by 50 or 55 but our #1 goal in life is to “enjoy and be near family”. Maybe our kids move out of state. Maybe they have kids. Maybe they don’t. Maybe they want to come back to their home town. We have no idea but we want the flexibility to be able to follow one or both of them.”
And there it is. The ability to “enjoy and be near family” is Fred’s and Ethel’s unifying goal. Having acknowledged it to each other and to me, they’ve fully accepted the competition between that goal and every dollar they spend until the goal is accomplished.
Sure, they still have to assign a dollar value to that goal, but that’s not so hard.
The hard part is maintaining high awareness of the impact of today’s decisions on the big goal.
I’ll tell you what, though, it makes for a much more interesting budgt review. Once Fred told me that he and Ethel value freedom to enjoy time with family above all else – and invited me (and you) to rip his budget to shreds* – we were able to roll up our sleeves and get serious.
Preview: “Drop the housekeeper and clean your own stinkin’ house.” 🙂
*His words. Fred and Ethel excitedly request our brutally honest feedback on their finances. They’re fun and cool, like Bill and his wife, of the Brain-Exploding Budget.
Sit down with your significant other – or a close confident – and do the hard work of figuring out your one unifying goal. The resulting clarity will shape every consumption decision you make.
After all, I don’t think any of us want to end up like Alice:
“– so long as I get somewhere,” Alice added as an explanation.
“Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”