Looking back - money as mindfulness
Yesterday marked the two-year anniversary of becoming debt free. On February 6, 2020, we made our final payment towards my law school student loans. We’d spent the preceding two years working towards the goal of paying off all our consumer debt – a number that exceeded $90,000. We set out with the goal to pay off our debt as quickly as possible. We started because we felt like we would be trapped by debt forever and like we were living a mediocre life. The way we were handling money before setting this goal was aimless. We each had our own income and without any common goals, we contributed to the household base needs and then spent the balance of our earnings however we wanted. This could foster feelings of resentment and unfairness.
When we decided we would pay off all our debt, we combined our incomes and our expenses. We created a budget that was our contract with each other. Once we figured out how to budget, we were able to put between two and four thousand dollars per month towards debt. We were motivated to pay off our debt because we saw that if we were able to put this amount of money towards debt, we’d have the same leftover every month to save, invest, and begin to create the lives we really dreamed of.
Something unexpected happened in those two years and these years that followed. Initially, the desire to take charge of our finances was driven by ideas of wealth building and creating lives we dreamed of. But something else happened along the way: By sticking to our budget and paying off our debt, we began living a life that was truer to things we actually cared about. Even without the wealth, we began living the life we dreamed of.
We all have a fixed amount of money we can spend every month. If we commit to living without credit and with a debt-free lifestyle, we’re forced to make choices within that fixed amount of money. We must make choices that give us the most satisfaction and that not only account for the present, but also contemplate the future.
We can take a few principles from economics to help understand this idea. In economics, there is a theory which explains that when a person is faced with a constraint, they will make choices that give them the most utility, or happiness. Economics also provides us with the idea that everything we do has an opportunity cost – or, said another way, if we chose one thing, it will be to the expense of not being able to choose another thing.
When we use a budget and understand our numbers clearly, we have insight into our constraint and opportunity costs. It is easier to weigh opportunity costs when we can see them transparently. For example, within our budget, after we have affixed amounts to non-negotiable categories, we can see that we must make a choice with our remaining resources on what we care about: Do we want to spend our money on dining out? Or perhaps we’d rather use that money for travel? This framework helps us to better understand our goals and make choices that create the most happiness.
It took me a while to understand this in my own journey. But, once I did, I saw that I was making a lot of choices that weren’t for me, and that were to the detriment of things I cared for or might one day care for. Through my own journey, I began to discover my own values and goals. The opportunity cost of something not aligned with our values and goals was too great – we were forced to discover our priorities and make space to allow them to evolve.
Years out from the beginning of our journey and we still do this work daily. Managing our money is a lifelong mindfulness practice. Money is the resource that helps us, in part, achieve the life we want. In this season, the life we want is simple: our focus is on nourishing through quality food, time together, flexibility, learning, and creating opportunities for future choices. At another point in our lives, it might look a little different. We’ll continue to explore, utilizing this constrained resource, and find what feels good and aligns with our values and goals.