One of the biggest financial issues we see and hear about today is called ‘Lifestyle Creep’.
Simply put, that’s allowing our expenses to creep higher and faster than our income will allow.
It’s a consequence of moving towards or staying in a negative cash flow situation.
Yet spending money is not a bad thing – in fact on this site – we encourage it!
You’ll read more about that later in future articles but for now, we want to give you the most important money question you’ll ever need to answer.
Why is money important to you?
Obviously everyone’s answer will be different, and your answer is likely very different than ours.
But it really doesn’t matter because your financial dreams are the only ones that matter.
Through a simple discovery process related to this short but critical question, it will unpack an entire world of money answers.
Having an understanding of your money values, your “whys” when it comes to money, we believe that knowledge will deliver better financial decisions. This is not because someone told you to make those decisions. Rather, those decisions will be coming from you including those things you value.
Here are some simple but important money questions we (the authors) have asked ourselves repeatedly over the years to help frame and reframe our personal financial independence plans.
- Why do you spend money on X or Y each month?
- Why is that spending important?
- How do you feel when you spend money on those things? Why is that?
If this is the first time you’ve gone through these key questions, don’t worry, you’re not alone. In our experience over our many years of blogging and hearing from thousands of investors, very few people take the necessary time to sit down, in a quiet space, and just reflect.
But taking time to answer these questions honestly is a very important exercise for a number of reasons.
For one, the interesting thing you’ll begin to realize as you go through this process is: this exercise is as much about exploring your feelings with money as where your money goes.
Secondly, this process might also highlight some revealing tendencies, things you didn’t know about yourself and where your money goes.
Third, and our final point, this process when done correctly might be uncomfortable. This is because we all have financial skeletons in our closet. You may uncover things you didn’t think were true but really are.
When this power of why process is done correctly (and we’ll have some tools on our site to help you work through that over time), you’ll be empowered to marry up your time-value-for-money ethos.
You’ll gain a better appreciation of where your money goes and just as importantly how that feels. Those feelings will support any behavioural changes you may wish to make. Those changes can help you sync up your time and your life’s energy when it comes to money matters.
We look forward to writing much more about the power of why, sharing some tools to help you work through that understanding, and sharing some case studies on the very important subject of cashflow management.
What are your “whys”?
Why is money important to you and your family?
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