This is Rule 8 in my 10 Rules to Eliminate Debt and Change Your Life
Much like Rule 7, we are beginning to enter a maturity phase in our personal finances. If you recall, Rule 7 talks about planning in advance for large, expected expenses so that they don’t disrupt our debt payoff plans. Rule 8 also gets us thinking ahead and allows us to be human, and have some fun.
If you are deep in debt, you may not be ready for a full-scale implementation of this rule. What I’m saying is: if you have a ton of consumer debt, you probably shouldn’t be planning an extravagant vacation (unless you are committed to a long timeframe of saving).
This rule can be applied monthly or more sporadically. You could set aside $30 each month to simply take your significant other to a nice dinner. Or you could save $50 each month for a modest getaway once a year.
So Why is this Rule Important?
I used to be a hardcore follower of Dave Ramsey. If you are familiar with Dave’s teachings and teaching style, you know he is pretty adamant about “living like no one now, so you can live like no one later.”
Essentially this means have no fun when you are young, and possibly have fun when you are old.
The problem with this is that it is….well, no fun.
What is the point of living and working if you don’t have some freedom to play? I believe the true path to financial freedom DOES NOT involve depriving yourself of joy for the sake of money. Doing so gives money too much power over you.
A person who is truly in control of money can harness it as a tool to build the life they want, not the life Wall Street tells you to live.
I still like Dave Ramsey and think his overall message is good, but he is a mouthpiece of money myths. The only way he’d ever let you retire early is if you somehow managed to save $2 million.
So What Changed with My Mindset?
I was introduced to the doctrine of conscious spending by Ramit Sethi. He talks a lot about automating your finances and making decisions in advance on how your money is going to fit with your priorities. In a nutshell, it allows you to be miserly in spending on things you hate, while affording you the freedom to spend what you want on your hobbies.
If you are a comic book superfan, who am I to tell you that you shouldn’t put aside $40/month to attend your favorite convention? Doing so would only make you resent your choices and would likely cause you to revert to your old free spending ways.
So How Can this Work?
First off, if you haven’t mastered the previous Rules, don’t even try this.
If you haven’t been consistently spending less than you earn and shrinking your debt each month, you should probably think about depriving yourself of some fun. You are probably having too much fun.
But if you are making great progress, shrinking your debt and generally making big changes in your life, you have your own permission to think about budgeting for fun.
This is exactly what we are doing.
We are not debt free yet, but we are saving for a $5,000 vacation.
Why? Because it is a priority in our life – period. By skipping the vacation we could be debt free 2 months earlier, but would miss the window in which we could take such a trip. That would mean we’d be looking at next year, or even longer.
This was a risk we aren’t willing to take. In a nutshell, I am willing to delay debt freedom by two months to take this trip.
And you can’t tell me I’m wrong because I only answer to me. And you really only have yourself to answer to.
That being said, we are taking this vacation by:
- Saving in advance
- Not accruing new debt
- Maintaining our debt payoff schedule
If you are able to work in fun in a responsible way, go for it. If you choose to delay fun until you are debt free, that is a great choice too. The important thing is that it is YOUR choice, YOUR life, and you must live with your own decisions.
Personal finance is mainly about psychology, not money or math. Getting control of your money is more than a math equation – it is about the role money plays in your life and whether or not you are disciplined enough to make your money work for you.
10 Rules to Eliminate Your Debt and Change Your Life
8. Set Aside Some Money for Fun
9. Pay Off Debts Before Investing
10. The Goal of Work is Retirement