As I sit down with my morning cup of tea, hearing the birds and watching the rising sun, my mind sometimes slips back to those years when I was a young, working mother. These simple indulgences were not an everyday occurrence. Not that I managed my work and time poorly; it was just that my priorities were different. Our attitudes to money and life are also shaped by these changing priorities. They run with us through life, forcing our hand first, and letting go later. When someone tells you how your attitudes might need modification, pause to consider the possibility that your situation could be unique.
You may have chosen to arrange your life in a way that makes sense to you. Other approaches may hold some appeal, but you need to think what comes first for you. You should always rank and organise your priorities, and be aware of the inevitable trade-offs. Pause and consider your journey: what you lost and gained, and why. Consider two situations: one, where a salesperson disliked his job that required so much travel away from home. However, he was not sure he could earn enough in another job that demanded less from him. Two, where a woman refused to return to work after she started a family since she found it tough to leave the child in daycare.
Hindsight is a killer, and regret is worse. Imagine the salesman and the mother looking back at these decisions 20 years later. Imagine the regret of missing out on family time or professional career. Generalised advice tries to pre-empt regret and claims that lower income is better than missing family time, when it comes to the salesman. On the other hand, it asks the young mother to find herself a job to bolster family income instead of just being with the child. What should be prioritised, work or family?
We all like to rearrange our lives either by going back to modify our past decisions, or by going into an aspirational future that is better. Don’t we routinely blame something in the past—our childhood, education, career choice, the city we live in, the people we live and work with—as somehow responsible for what we could not achieve? Don’t we lay out a future in which we spend more time with our loved ones, and also take care of ourselves and our health, while also travelling the world and living out long held dreams?
Something about our current position is unsatisfactory for us to either blame something in the past, or seek some relief in the future. Both positions are imaginary and are, at best, our way to cope with what we may see as disappointments or failures of the present. So, how do we live in the present? What determines our priorities and choices? It would seem that our fears play too much on our subconscious minds, and this is what drives our attitudes and priorities. Many middle-class mothers and fathers have led monotonous workaholic lives since they are driven by the fear of running short of money. Or, they have stuck to sub-optimal jobs for the fear of not finding another one. Or have simply succumbed to the fear of the unknown to stick with the status quo.
Financial freedom is the magic potion that holds the power to overcome these fears. If our lives are not beholden to that regular trickle of income that we need to keep peace and calm, we are able to make our choices and priorities from a position of strength rather than fear. The tradeoffs seem bearable. Financial planning works from this frame of reference, where our ability to prioritise is driven by the comfort of accumulated wealth.Early anxieties about career and income settle down as savings accumulate and grow into assets that one can fall back upon. From wading through a layoff using an emergency fund, to taking a career break with savings to fall back on, to becoming an entrepreneur leaning on appreciated assets, to retiring in peace after securing the retirement corpus, we lean on savings and investments, assets and their growth, and income to keep peace with life’s curve balls. The trade-offs are worthwhile in our mind, when it results in greater financial freedom. That is why we dislike being guilted about chasing a career that demands more hours but pays very well. We like that trade-off as we see it as a fair price to pay for the money that eventually frees us. We also make a virtue of it by declaring that we worked so hard to get where we did. The wealth vindicates the prioritisation.What if the fear doesn’t leave us?This painful position is one where our wealth gives us the ability to modify our priorities, but we are simply unwilling in our minds to do so. What if there is no fear? Such a privileged position comes from substantial inheritance, or overconfidence about the future. We have the younger generation juggling various positions: minimalistic living that demands fewer resources; boundless optimism that features no fear of the future; or realistic work-life balance that moderates ambition. We are still not done experimenting with what our priorities are, and how happy we are with those choices.
Our financial journeys may feature shortage and suffering; we strive to fix it. We reach a position of sustained adequacy and then begin to save and invest. We then seek buffers and cushions against intermittent upheavals. We push harder to build assets and see them grow, and get to a position of comfort. We are propelled ahead with that nagging fear, until we are financially free enough to let that go. Only then are we able to sit with a cup of tea and hear the birds and watch the sun.
(The author is IS CHAIRPERSON, CENTRE FOR INVESTMENT EDUCATION AND LEARNING.)