During my time as a financial advisor and a father of a large family, I have learned a thing or two about managing money. I’m not talking about the technical things you learn in school. I’m talking about the real practical learning that comes from doing and observing. I have been blessed to learn from my own experiences, but I have been extremely blessed to learn from the experiences of thousands of others.
In the process I have developed the ability to look at a person, or a couple in the early years of their life, examine what is important to them from a financial perspective, and then predict what that same family will likely look like financially throughout their life. I have also been privileged to help many of those change the way they view money and in the process, alter their financial future. Not surprisingly, I have witnessed that the same principles that lead to financial success, or failure in a family, lead to similar results in business and government. Today I would like to share just two words, (technically three) that I would like posted on every refrigerator in America as a warning sign of financial difficulties ahead.
The words are, “It’s Only.” Keep in mind that money is merely a medium of exchange, but what is it that we are exchanging? At the root of it, we exchange our time for money. I don’t know how others feel about their time on this earth but mine is precious, even sacred. If through manual or mental labor I am going to exchange my time for money, then how I treat that money reflects how I value my time.
In making financial decisions, especially ones that include items that are frivolous or unnecessary, we often use the phrase, “It’s only 5 dollars….100 bucks…. 1% of our monthly budget….(fill in the blank).” As soon as those words come out of our mouth we should immediately catch ourselves and say, “It’s never ONLY.” If you develop the attitude that a relatively small amount of money is insignificant, then I can tell you from years of experience that such an attitude will transfer to 1,000 other small amounts in many other such decisions. This is the truth behind Benjamin Franklin’s attributed quote, “Watch the pennies and the dollars will take care of themselves.” It isn’t the pennies that matter, it’s the attitude towards them that changes lives.
When a politician says, “It’s only going to cost taxpayers….”, when a business owner says, “It’s only a fraction of what we take in…..”, when a family decides, “It’s only a small amount so we will never notice it…” in each case we are hearing that the money involved has little to no value. And if a small amount of your money has no value, then none of your money will have proper value, because as humans we develop and live by our habits. Over the course of life all of those thousands of “It’s only’s” add up until one day we may sadly look back on that life and say instead “IF only” we had valued our money a little better.
Now this does not mean in any way you cannot buy frivolous things. By all means enjoy the money you have earned. Many of life’s great memories come from seemingly frivolous activities or expenditures. What this does mean is, when you decide to splurge on something frivolous, always respect the hours of your life you traded for that money and make an intelligent trade. It isn’t about the pennies. It’s a part of your life you are trading for something you consider of equal or greater worth. The next time you, or a child, or a friend, or your elected official refers to any amount of money with the words, “It’s only,” recognize that someone may not understand the pennies so how can they be trusted with the dollars? Making this single change in the way you approach spending can have a huge compound effect on how the rest of your financial life plays out.
Dan Wyson, CFP® is a long running national financial columnist, author of several books and CEO/Founder of Wyson Financial/Wealth Management 375 E. Riverside Dr. St. George, UT 84790 – 435-986-9525 Securities and Advisory services offered through Commonwealth Financial Network™, member FINRA/SIPC, a registered investment advisor.