Last summer I read Stephen R. Covey’s The Seven Habits of Highly Effective Families. This book, like many that I have read in my life, was profoundly inspiring. After reading it I was determined to follow all of the great advice in it, but somehow in our overly busy world I have just not found the time.
One of the first tangible suggestions in this book is to create a series of mission statements: first one for yourself, and then one for every major relationship in your life. Examples would include a marriage mission statement and a family mission statement. ScrapperMom and I scribbled some notes down during our vacation last September, but I have no idea where that paper is.
Lately I have been thinking about the things that I value, and about how I seem to be running on the treadmill of life, but not sure that I’m making any progress. I remembered the idea about creating a mission statement. Such a statement should serve as a target for where I want to go. As Covey points out, pilots are off course for 90% of every flight, but because they have a clear endpoint in mind, and tools in the form of equipment and ground support to keep them pointing in the right direction, they almost always arrive where they set out to go.
I started thinking about what I would include in a personal mission statement, and the first (and so far only) thought that immediately popped into my head was:
Live a purposeful life: Make every action you take count towards getting you to where you want to go and who you want to be. You simply don’t have the time or the energy to waste on things that do not contribute to your goals.
This statement really begs the question: Where do I want to go and who do I want to be? This is a difficult question, and probably a large part of the reason that ScrapperMom and I did not follow through on completing our marriage and family mission statements. What I do know is this: The most important “things” in the world to me are the members of my family, both nuclear and extended. The second most important “things” to me are the friendships that I share. Happiness to me is having a get together with friends penciled in on my calendar for the end of the week. So at least I know who I want to be: a great partner with my wife, a great father to our daughter, and a great friend to all the rest.
How does this relate to personal finance? Well in thinking about the above, we all find that we’re a bit off course a lot of the time. We spend much of our time, energy, and money doing things we don’t necessarily enjoy: We get up and go to work, we pay taxes and insurance, we vacuum floors and mow lawns. Most of these actions are simply necessary, and there are few ways around them. But we have to always keep in mind why we’re doing these things. If it’s not something that contributes to our goals, we should ask ourselves why we are doing them. I work to provide food, shelter, entertainment, etc. for my family. I pay taxes and insurance to keep my family safe (and for other reasons). I mow the lawn so that my daughter has a place to play.
Here are a few examples of things that I’ve heard recently that reinforce the idea that we have to remember what we value and not forget to actually enjoy those things every now and then:
- I was in New York City on business last week and had dinner with an old friend with whom I used to be very close, but who I had not seen in over 3 years. Said friend suggested that I would like the beer at a certain bar because it was cheap. “What do you mean by that?” I asked. “Well,” came the reply, “I figured that since you write about personal finance, you are always looking for ways to save money.” That may be true, but life’s too short to drink cheap beer.
- J.D. at Get Rich Slowly wrote an article that concluded: “Remember: There’s nothing inherently wrong with purchasing things that bring you joy. But problems come when you finance these purchases with debt. If you’re meeting your other financial goals and have money left over, it’s good to indulge your interests and passions.”
- About 6 months ago I started a personal finance discussion group with some of my friends (more on that later…). While trying to get a group of friends together, one friend told me: “I like this “good life” of expensive shoes and handbags, going out for pricey dinners and expensive drinks and don’t really want to think about things like retirement planning and emergency funds.” This particular friend and I had already discussed our philosophies about retirement planning, life and disability insurance, etc., so I knew that she was already in pretty good shape. It looked to me like she could afford to indulge on the things she liked, and I applauded her for that power.
So I have the first couple of lines of my personal mission statement down now. It’s time to try to fill it out with more of the specific things I value, then move on to the relationship mission statements as well.
I’d love to hear about some of the things that you value and how you act to support those values. Feel free to comment below.
This week I have had little time for writing since I have been getting our yard in shape to host a graduation party for a good friend of mine. My friend is graduating from MIT on Friday — ten years after most of his classmates. I am thrilled to be hosting this party, and thrilled that my friend is graduating. I think it must have taken an enormous amount of courage, and clearly a great deal of effort, to go back to school after being away for 9 years, to finish an undergraduate degree. I think this is, in many ways, far more difficult than graduating on time.
This friend of mine has been very successful in a pretty decent job for the last 9 years, and that’s what makes this all the more courageous: he didn’t really need to do it. Clearly, having a degree from MIT will certainly help his chances for future employment, but nearly 10 years of experience as a circuit designer and programmer will also count for a lot all by itself.
So KUDOS to you, friend! (You know who you are) and best of luck to you and yours with whatever comes next!
Courage does not seem to be in short supply this week, and I would like to highlight a couple of other cases:
- Some friends of ours confessed this week that they are selling their house. Their house is for sale because they can no longer afford to make the payments. I do not know the details of their inability to make the payments, but I do know that they assessed their situation and made a hard decision — a VERY hard decision. Clearly this is the right choice for them, and I applaud it. I believe that this gives them a new lease on life. Starting over is hard, but without the baggage of a downward spiral of debt and possibly a bankruptcy looming, this family has a great chance of succeeding in the end.
Owning can be significantly more expensive than renting in our market, and if I had it to do over again, I might have looked a bit harder for places to rent rather than buying our current house. It is clear that in many cases, even with the decline in the housing market, that renting is still quite a bit cheaper than buying in our market. I hope that this family will be able to save quite a bit of money to use to buy their next home when the time is right.
Our friends have expressed embarrassment over their situation. I don’t think that they have any reason to be embarrassed. We, as a society, are constantly bombarded with advertising and mass media suggesting how we should live, what we should own, drive, etc. Yet most of us learn no more in public schools about money than perhaps how to write a check and balance a checkbook. Who still writes checks as the basis of their finances? This training certainly does not translate into our credit driven economy and as such, it’s no wonder that failures like this occur — in fact it’s surprising that it doesn’t happen more often. I hope our friends make the best of this experience to wipe the slate clean and use this as a great learning opportunity.
- Lastly, my dear wife showed a lot of courage this week in realizing that she was wrong to spend our money without consulting me. I actually did not even say much to her about how I felt about this, and the next thing I knew she had written a blog to expose her transgression to the world. The 10% that we may have to forfeit for backing out of the agreement she signed is still a lot of money, but I think that it was money well spent if it does nothing but serve as a reminder to both of us that we care for, respect, and love each other enough to consider our partner’s feelings. This is truly a case of “What doesn’t kill us makes us stronger.” (not that this was at all close to “killing” us…)
Have you witnessed any random acts of courage this week? Have done something courageous yourself?
Well this is basically going to be a confessional post….
I did a bad thing the other day…
I broke almost every financial rule we have….
I bought something over $200 without the other person’s consent…
I bought something without thinking about it for at least 24 hrs…
I applied for and used credit without my spouse’s knowledge….
In my defense we have talked about this purchase and had decided that it should be put on the radar as something to start thinking about. Of course in a perfect world I would be able to pay as I go and save along the way. Unfortunately at the company I went to the product is offered as a package deal with a deep discount for prepaying. That is why I should have done my due diligence and realized that this is a huge red flag and reputable companies don’t make you prepay for services.
I broke the unwritten contract we have concerning money and I feel awful about it. This is what I have done to remedy the situation.
After doing a little research (that I should have done prior to signing on the dotted line) I have realized that:
A) Although the woman I spoke with said they do not give refunds, the paper I signed clearly states they do.
B) I have written a letter to the company requesting a refund and have copied the credit card and the Company’s main customer service department.
C) I will wait to see if the company makes good on the refund. I will give them 30 days or until I get the credit card bill. If they do not, I will send the letter to the credit card company and dispute it with them.
I can’t believe I fell for such a scam. I just finished reading Predictably Irrational… I didn’t learn anything, clearly. I have learned my lesson now. This is why we have the 24 hr waiting period, this is why we talk to our spouses before making big purchases, this is why when it looks like it’s too good to be true, it usually is.
I’m not proud of myself but this is something that is very important to me. In the heat of the moment I got excited. I forgot everything I have learned about finances and purchases. I know now that I did not approach the purchase correctly or fiscally responsibly, and I may end up eating a 10% administrative fee because of it. After the matter is resolved I will make an appointment with a reputable, local, licensed practitioner and see if I can save up the money to start the process the proper way, the way we agreed to do so. I hope Mr. MITBeta can forgive my financial transgression. I will try to make it right.
Update: I have heard from the company and I believe they will be issuing a refund minus the 10%. Cross your fingers for me.
Editor’s note: MITBeta forgives ScrapperMom… but is still not happy about having to pay 10% for nothing…
A young reader writes:
“My husband and I got got into an argument after I paid a bill that he says he was going to pay. Since we keep our finances separate, what’s a good way to manage our combined bills?”
Firstly, let me tell you how my wife and I handle our finances, and then I’ll give you some ideas about what you can do in your present situation.
Mrs. MITBeta and I have combined accounts for all of our banking and credit accounts. Both of our paychecks get deposited into our Money Market account along with rent that we collect from our investment property. Our budget is set up such that all of our fixed bills are paid out of our Checking account. Periodically I make transfers from Money Market to Checking to be sure that all the bills are covered (remind me to automate this…). Our discretionary expenses — things that we don’t have to spend money on but choose to — all go onto our rewards credit card. This balance gets paid monthly out of Checking. Additionally, the following accounts are all held jointly:
- Mortgages
- Car Loan
- Some other credit cards
- ING Direct Savings Account
The only accounts that we own individually are my remaining student loan, our 401(k) accounts, and obviously our Individual Retirement Accounts (IRAs). Read the rest of this entry »
photo figure credit: Karen Apricot New Orleans
