Our lives and our well-being are constantly being tested by the craziness of our society. One day we may have everything go our way and the very next day our world is in chaos. We have ups and downs, high and lows, times of pure joy and times of anger. We could be very happy or very depressed. We are back and forth between emotions and mental states throughout our lives. So how to we begin to make sense of everything life throws at us? We start to add balance to our lives and the possibility of a balanced financial life becomes much more clear.
What is Balance?
A Google definition: “An even distribution of weight enabling someone or something to remain upright and steady.”
In art and design: “The distribution of visual weight in a work, whether symmetrical, asymmetrical, or radial giving the artwork the appearance of balance.”
In life – the wise version: “Our ability to look at and understand our lives so well that we are able to prioritize all aspects of ourselves and create a peaceful mindset and well-being.”
In life – the realistic version: “Getting our crap in order so we don’t go nuts!”
Whatever definition you like I think we can all agree everyone needs a little bit of balance in their lives and balancing your finances are a great place to start.
Living a Balanced Financial Life
Having a well-balanced financial life isn’t the easiest thing to do, but it’s not impossible either. It takes time, patience, practice, and change. It will also require you to think, be creative, and coordinate with others whom you share you financial life with.
Let’s take the idea that balancing your finances means the following:
- You know where all your money is coming from and going to (creation of a budget).
- You are able to pay all of your regular essential bills and expenses.
- You have paid off all high interest credit card debts (destroying your debt).
- You are able to indulge, have fun, take vacations, and do extra things with your money within reason.
- You have 3-6 months of expenses saved for an emergency fund.
- You have retirement investments (401K, 403B, IRA) that allow your money to make you more money.
- You have a college savings plan for your children (if you have them).
- You are properly insured against any major catastrophes that would greatly harm you or any of the above.
If you have taken part in all or some of the above then by that definition you would either have a balanced financial life or are on your way, but there is one more thing that isn’t listed above that I think is very important, which is your happiness.
Are you Happy?
Following a list like the one above or any other list of basic financial goals is actually fairly easy. The hard part is doing that and keeping yourself happy at the same time because no list exists for you to follow when you are deciding your own happiness. That is your own journey and no one elses. And, when I say happy, I mean happy in the sense that you don’t feel constricted, restricted, or unbalanced by taking some steps to balance your finances.
The first step would be to ask yourself two questions:
- “What makes me happy?”
- “What makes me unhappy?
Make a list of the answers and then see how you can adjust or change your financial life in and around what you come up with.
Let’s pretend you are an antique collector, have been doing it your entire life, you love it, and you don’t ever see yourself giving it up, but your spending on antiques has been slowly growing out of control.
Does this mean you have to stop collecting? Absolutely not! You just need to reexamine and adjust your spending towards your collection. Maybe you spend less per month on antiques. Maybe you only go antiquing once per month. Maybe you cut your antique budget in half. It’s totally up to you and in the end you are creating balance between your finances and what makes you happy.
Now on the other hand if you tried to stop collecting all together and get rid of your hobby that you love so much it may work out in the short-term with your money, but as you go on without your happiness outlet other things in your life may start to become negatively affected and we don’t want that.
You don’t have to go to extreme lengths to start balancing your finances. You start with small changes and eventually move onto larger ones. A good example of this is my life. I slowly started to change my spending in order to kill off my debt simply because my debt made me unhappy. I then saw the great results, which made me happy, and began learning more about managing my money. I now have a plan in place to save, invest, and spend my money. And, please don’t let me fool you I have not achieved a perfectly balanced financial life….yet, but I sure plan on doing so.