Often part of the natural inclination towards money is to view it as something that just pays the bills. While this perspective is certainly valuable in certain context, I want to share 3 different ways you can look at money that will change the way you see your financial life.
The 30,000 feet approach
When you look at any area of your life, health, emotions, mental health, relationships, spiritual journey, your money, etc… it’s easy to view them up close. But when we step back and view the specific situation through the perspective of our whole life, we can see how much it really matters or doesn’t matter.
Ask yourself, “Does spending $120 on a box of extra wineglasses fit into the overall priorities of my life?” If it does great, but more often than not, the priorities don’t align.
The time perspective
When you look at your finances through this lens, you imagine how your decision will look at the end of your life. For example I am thinking of buying a new vehicle that looks and feels cooler. However this expanse will postpone some of my retirement savings.
When looking at it though the time perspective you imagine how you’ll view this decision 40 years down the road. Ask yourself, “When I’m 80, how will I view this decision?” Often our decisions are based on short-term thinking, so this view can really help us realize the consequences behind our actions.
The business perspective
Imagine your financial life is a business. If your name is John Smith, your finances are managed by John Smith, CFO(Chief Financial Officer) of John Smith Corporation. As CFO you are responsible in allocating capital (money) towards the respective goals of the business.
If your job was to manage money for yourself (which it is) would you be happy with the job you’re doing? Or would you fire yourself?
Base your actions on whether they provide appropriate return on investment (ROI) for John Smith Corporation. While the goal of John Smith Corporation isn’t necessarily to maximize profit, your decisions should be aligned with your priorities in order to fit your values. Sometimes this could mean going on vacation, but other times it could mean increasing retirement contributions.
These perspectives are meant to help improve your decision-making processes with your money. They certainly have helped me in my financial journey. In what other ways can we view our finances?