Does your money have a purpose? Or is it just sitting there, doing nothing to improve your life or the lives of others?
One of the greatest financial revelations of my life involved understanding that money is a tool.
I like the idea of giving my money a purpose. Rather than buying random items that I don't particularly care about, and trying to work to get more money, I started looking at my money in terms of what it can do for me and others.
I still need to work in order to earn money and maintain my lifestyle — I'm not living on passive income or anything like that. However, the money I earn has a specific purpose. While I invest in the hopes of growing my wealth, I also realize that there's a lot of good my money can do today. Plus, I like the idea of using my money to enjoy life and provide opportunities for my son.
What Do You Want Your Money to Do for You?
When trying to give my money a purpose, I started with my values and my goals. I was really disappointed the day I realized that my house was full of clutter that I didn't really care about. In fact, if I had saved that money, instead of buying things of dubious interest to me, I could have taken a luxury vacation to just about anywhere in the world. That's when I decided to rethink how I used my money.
I thought about what I wanted money to do for me. What could I do if I directed my financial resources differently?
Instead of buying things, I started focusing more on experiences. I knew I wanted to be able to give to charity, live comfortably, save for retirement and rainy days, and get my son involved with enriching activities. Once I narrowed my focus, it became easier to make money decisions in line with living a more fulfilling life on my own terms.
Investing for Tomorrow — and Today
I incorporated investing into my effort to give money a purpose. By growing my wealth at a faster pace, it allows me to do more of what I want. This includes using a travel fund as well as an emergency fund that uses investing.
Part of my effort included increasing how much I put aside for retirement. I also opened an HSA and started investing that money as well. Tax-advantaged investing is a great way to build future wealth.
After increasing these contributions, I decided to increase investments in taxable accounts. We often forget that investing can provide access to capital for medium-term goals — and even short-term goals. The money I invest has a purpose that provides me with a better quality of life today.
It also allows me to build up assets. Having these assets is a huge help in other ways. I feel more comfortable volunteering my time when I know my money is working for me. Community involvement feels more doable when I can see my money doing some of the heavy lifting — rather than me having to trade all my time for money.
What's True Financial Wellness?
To me, financial wellness is about looking at your values and priorities and doing what you can to put your money toward the things that give your life meaning and purpose. For me, that's ensuring that my future is funded and that I feel like I'm furthering causes I believe in. After that, I like that my son can take music lessons and fencing lessons and that we can travel together.
I'm fortunate that I have a great career that allows me freedom and flexibility and provides enough income that I can do most of what I want. It wasn't always like that, though. Before I thought about what I wanted my life to look like, and before I started cutting my spending on things that didn't really matter to me so that I could put that money toward things that are more important to me, money was the bane of my existence. There never seemed to be enough of it.
Now, even though I might have to plan ahead for some bigger expenses (like the Viking River Cruise my son and I took a couple of years ago), I can do most of what I find worthwhile. I have time to volunteer in the community and contribute to charity. Money isn't the answer to everything, but if you give money a purpose, it can help you live a more fulfilling life — and you can enjoy a healthier relationship with your finances.