Your Money, Your Choices: Why Personal Finance Is Deeply Personal

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Personal finance is such an interesting facet of life. It’s a part of every one of our lives whether we like it or not and most of us think we know what’s best for ourselves… and everyone else.

But the reality is that while we can learn as much as we want about the subject, we really should only focus on what’s best for ourselves.

Why is that?

It’s because, funny enough, personal finance truly is personal.

You might have heard that before but it’s probably something you only thought of almost as a cliché. Saying “personal finance is personal” is about as overused as saying that “everything happens for a reason.”

But my mind went down a rabbit hole the other day and I realized just how true that simple phrase of “personal finance is personal” actually is. Today I want to tell you why you need to tune out the noise and put your attention on your financial goals only and no one else’s (including mine).

Two areas of personal finance we all deal with

With very few exceptions, there are two areas of personal finance that each of us has to deal with in life:

1. Saving
2. Spending

On one end of the spectrum, that idea of saving might be just a pipe dream or just enough to hold onto temporarily to pay the bills each payday. That’s a tremendously difficult position to be in and has the potential to make each day harder than many people can even fathom. When it comes to spending, it’s likely to be on the absolute necessities just to get by.

On the other end of the spectrum are the uber-rich. These are the folks who have it all – they literally can’t spend their money faster than it’s coming in, even if it’s just due to the massive returns on existing investments. They have the power to be extremely conservative with their savings and investments if they want because they’ve already won the game. And spending… yeah, whatever they can dream of they can buy.

Most folks though fall somewhere in between with the key being that the degrees of difference can vary widely. You can have two families living right next door to each other in almost identical homes and even owning (or leasing) the same cars and think they’re living similar lives financially. However, you might find that one of those families is struggling to stay afloat and pay the bills while they’re up to their necks in credit card debt. The other family could be living well below their means and extremely wealthy.

If you don’t believe that, give The Millionaire Next Door a read. You might be surprised by just how common this is.

What’s interesting about these degrees of difference though is how much we compare ourselves to friends, family, and even strangers while we know that everyone’s different. We seem to have this inherent need for validation – whether from others or in our own minds. We tend to want to know that we’re in the same (or better) position than others… nobody wants to be behind everyone else.

So what happens is that you end up with that coworker standing around the water cooler jabbering about the latest investment opportunity. Or the neighbor talking about how they bought a whole life insurance policy because it will pay off for them in the long run… oh, and they think you should buy one, too.

So what’s wrong with that?

The problem is that what’s good for the goose isn’t necessarily good for the gander.

Let’s hold this thought until I give you an example of what I see in my own little world of personal finance…

Some keys to my personal finance picture

After stupidly digging myself into $30k in credit card debt during college (about $55k in today’s dollars), I made some changes in my life and turned things around.

Obviously, that worked out well as I was fortunate enough to be able to retire at the age of 43 back in 2018.

But it did come with a small price… I became frugal with money over the years. Some of you might look at that as a positive and some as a negative, but either way, I think about what I’m spending a lot more than I’d like to in life.

Our retirement plan basically allows us to spend around $50-55k each year. For us, that’s comfortable and still allows us to travel and have plenty of fun – even with a teenager in our house.

I keep track of our net worth and our investments for free in the Empower Dashboard. That works extremely well, the interface is nice, and the included tools are really impressive and useful (the Retirement Planner, Withdrawal Planner, Retirement Fee Analyzer, and Investment Checkup).

That said, we do need to be careful in the personal finance world of spending. Although we’re financially independent, that doesn’t mean we can just spend aimlessly… we still need to stay within our bounds.

We’re coming up on 5 years of retirement and, so far, it’s worked well. We’ve done more traveling and vacationing than I could have ever imagined and explored so many cool places. We’ve been chopping away at bucket list items and just living our best life.

Credit card travel rewards have allowed us to do so much of this traveling that we wouldn’t be able to do otherwise. Without a doubt, $50k/year in spending puts some guardrails on how much you can do. But we’ve gotten so many free or discounted flights and hotels over the years just by taking advantage of credit card bonuses that it’s ridiculous.

If that’s something you’re interested in doing, you can check out some of my previous travel rewards posts:

• A Month-Long Panama Trip for 3 for an Unbeatable Price of Less than $1,500!
• We Got the Chase United Explorer Card… Again. Boom! Easy Free Travel!
• Is It Worth It to Open a Credit Card With a Huge Annual Fee?
• The #1 Best Way To Track Credit Card Rewards
• The #1 Easy Way We’re Getting the Southwest Companion Pass
• Our Travel Perks Are Drying Up and That’s Big $$$!
• Free Nights – We’ve Had 5 at Hilton Hotels Recently
• We Got Turned Down for a Credit Card… Ok, Four!
• Travel Rewards – 12 Free Flights Earned in 9 Months!

You’ll see that one of the posts is about Travel Freely – that’s become a vital asset in my travel rewards toolbelt. It helps me figure out the next card to get, keeps track of my cards and reward deadlines, and alerts me when possible annual fees are coming up. It really is a fantastic service and you can’t argue with free!

If you’d like to support this blog, you can also sign up for your next credit card through my Recommended Credit Cards page, which gives me a small commission (at zero cost to you).

In the meantime though, we just keep doing our thing in life and it seems to be working pretty darn well. Yes, we’re a frugal family, but we spend our days doing what we want, traveling, and on vacation more than almost anyone I know.

What is some of the noise in my personal finance realm?

While our financial life has worked well for us, there are a couple of things that I’ve learned that I need to be aware of:

1. Don’t compare our personal finance elements to others.
2. Don’t expect others to do the same with their finances (or want to do the same) as what we’re doing

Don’t compare our personal finance elements to others

As I mentioned, we’re living a life that’s hard to complain about right now. We’re doing amazing things and we don’t have 9-5 jobs stealing from our time and energy.

But.. I don’t have to look far to hear the noise. Not only can I look around and see others who are doing “better” than us, but by putting our financial information out publicly, there are always those quick to say that retiring “with so little” will never work.

And it’s definitely background noise because it doesn’t seem to be affecting our lives. We seem to be doing just fine.

People tend to put themselves in someone else’s shoes with their ingrained spending and saving habits and mentality. Those kinds of comparisons don’t work and cause the whole equation not to work. We’re not the same as anyone else.

I’ll be the first to admit though that sometimes I do question if we have enough. The math all adds up and we’re comfortable with our lives, but is it really enough? Would we be better off with more money and not needing to question our spending? Possibly. Does it matter? Couldn’t tell you.

I can only tell you that things are going well for us and we have no problems financially. The only concerns come from when I open up my thoughts to wondering if the critics are right. Funny, right? Comparison and envy are a waste of time and can take you down a path of needless worry.

“Comparison is the thief of joy.”

— Theodore Roosevelt

In other words, the only time we might have issues when dealing with our personal finance components is if we stop and listen to what others have to say. And those folks know nothing about how we live, our spending routines, or our financial goals.

Interesting, right?

Don’t expect others to do the same with their finances (or want to do the same) as what we’re doing

On the flip side, this makes me realize that it would be silly for me to expect others to follow how we did (and do) things.

I think it’s important that everyone works on getting their finances in order, but how you decide to get there and what you do from there is up to you.

Whether it’s by saving more, earning more, or a combination of both, that’s not my business. And what others decide to do to make this happen (how they save, invest, side hustles they do, or if they start a bigger business) – that’s absolutely a “to each their own” situation.

Frugal mindset? Spendthrift? If it gets you to where you need to be and you’re still happy, does it matter?

The fortunate ones who do reach financial independence can do whatever they want as well. Just because we opted for early retirement (which could always change at some point if desired), doesn’t mean someone else needs to do the same. If you love your job and don’t want to leave, have fun and stick with it! If you want to drop to part-time or pivot completely, that’s your bag, not mine!

What should you be worrying about with your finances?

I can’t answer that and that’s precisely what I want you to take away from this post.

You’re the only one that can figure out what’s right for your financial picture. Your spending and savings habits as well as your financial goals are unique to you.

Personal finance blogs are truly great assets to learn about how others do things and they can certainly help motivate you. But don’t aim to just mimic what someone else is doing.

Just because I dabbled in rental properties, for instance, doesn’t mean it’s right for you. Or maybe it’s the opposite – maybe that’s the biggest key to what you would consider financial success and you might decide to be all in.

How much money you need is also specific to you and no one else. Putting a precise number on how much the “average” person should have in their portfolio before retiring is just silly.

I hear from people routinely that scoff at what we retired on… $1.2 million… you’ll never be able to live on that. People seem to think that everyone lives the same and they all need to have a certain amount to happily retire… $2 million? $3 million? $5 million?

Listen, personal finance is personal. Figure out what you need and not what anyone else tells you that you should have.

For us, continuing to accrue even more money wasn’t it – I wanted to spend more time with my daughter before she grew up.

And funny enough, the three of us have enjoyed our time together for almost 5 years now in retirement and now our net worth is currently floating at around $1.5 million. Is that enough for us to continue our retirement for the rest of our lives? Maybe… okay, hopefully. But in our case, we’re willing to be flexible and make a little money here and there or cut back on our spending if we need to.

And here’s the best part – I got to spend the past five years being a bigger part of my daughter’s life that I couldn’t have done if I was still working. That’s about as priceless as you can get!

For you, it might be different.

How about frugality? Is frugality right for you? Maybe. Maybe not. Perhaps you should be on the other side of the coin earning more and not worrying about frugality at all.

While staying at my brother and sister-in-law’s house one time long ago, I was astonished to see how they would buy some of their food. One example was prepackaged hard-boiled eggs. Yes, eggs that are already hard-boiled. My mind was blown – I didn’t even know such a thing existed, much less that people would spend a lot more money to buy them that way. How long does it take to hard-boil eggs? 15 minutes?

That stuck with me for a while until one day I realized, they bring home a lot of money (like really good money)… worrying about hard-boiling eggs isn’t something they want to deal with. And they don’t need to – they’re busy focusing on their income.

In other words, I needed to stop looking at things through my own personal finance lens. Instead, I needed to realize that what they’re doing works for them (and it does work), and what works for someone else is likely going to be completely different than that.

The same goes for you. You know you. You know what works for you and what doesn’t. There’s nothing wrong with getting ideas from blogs like mine and others in the community – or podcasts, videos, etc… in fact, I absolutely encourage learning everything you can about personal finance. Learn and pick what works best in your own situation in life.

We also enjoy our credit card travel rewards and they help supplement our ability to travel and vacation tremendously. Just because that’s good for us though is something you need to learn about and decide if it’s good for you as well.

Realize that we’re all different. You’re you so don’t let others tell you that this or that is how you need to be dealing with your personal finance situation. The only exception might be someone who gets intimate with your life and money and truly understands it (maybe a fee-only Certified Financial Planner). But even then, never make a change until you fully understand it and know it’s the right decision for you.

Don’t compare yourself to others and don’t let others try to convince you how you should be handling your money. Even though people might feel they’re helping others, and even if what they’re talking about might work for them, they don’t know the insides of your personal finance life. Feel free to listen to them, but then walk away and realize that what they’ve said may or not be something that fits well into your life.

Find your own path to financial success that suits you best.

“Comparison with myself brings improvement, comparison with others brings discontent.”

— Betty Jamie Chung

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Plan well, take action, and live your best life!

Thanks for reading!!

— Jim