At What Tipping Point Does Less Become More?
A reader recently discovered a terrific online financial resource – www.mrmoneymustache.com. Mr. Money Mustache controverts conventional thinking (or rather, lack of it) about spending and saving. The co-authors, husband and wife, reached financial independence at the age of 30 by saving aggressively in their 20s. They are raising their kids and spending time as and where they wish. They are by no means “deprived.”
Of course, “deprived” is a self-determined definition. Related to our self-definition of “deprived” is our self-definition of “enough.” What is enough for some might be deprived for others. What is enough at one point in our lives might be deprived at another.
However, even for those who by everyone else’s standards seem to have “enough,” defining the tipping point between enough and deprived remains one of the toughest parts of constructing a useful plan for their financial future. (Our calculations would be so much easier if we only knew on what day we were going to die, and how. Once the human genome is mined sufficiently to provide that, financial planners will be out of business.)
In fact, the more work we do on becoming mindful of what is “enough,” the richer we become. One reason is that our society encourages us to confuse consumption of “more” (more money, more stuff, more status) with the pursuit of enough. Unfortunately, enough becomes like the end of a rainbow – the closer we get, the farther it seems to move. Was there a point in your life where you were on the path of acquiring “more,” but stopped and realized you had “enough”? Did you change direction? If so, did you then feel deprived? Or, was it not so bad, maybe even better, after all?
Ironically, our pursuit of more can often be accomplished by doing with less. Let’s look at three money behaviors and see how this applies.
1) In spending: Examining what fulfills needs, what fulfills comforts, what fulfills luxuries, and what becomes clutter. The tipping point between luxuries and clutter is where more unhappiness is caused to acquire, own, maintain, insure, upgrade, or sell something than happiness is created by having it.
2) In investing: Understanding the unhappiness caused by taking unnecessary risk, or costs and fees, in order to reach for return. The tipping point between appropriate and inappropriate risk happens when “enough” return has not been clearly defined and maintained with discipline.
3) In sharing: Discovering the satisfaction of having helped another human, free of expectations of reciprocity or thanks. The more we stretch to share in this way, the better we feel. The tipping point between a mentality of scarcity and abundance is one of the most difficult to define, which makes it one of the most gratifying to discover.
Finding our tipping points can be a little scary, like stepping onto a tightrope and wondering if there is a net. When we think about it, few opportunities to stretch ourselves come without a fallback plan. But many opportunities come with rewards we can’t yet fathom.
Share your “less is more” experiences in the comments here, or email me at holly@hollydonaldsonfinancialplanner.com.