Speaking on a topic that had nothing to do with personal finance Dieter F. Uchtdorf , a counselor in the first presidency of the Church of Jesus Christ of Latter Day Saints, said the following:
The what is important in our work, and we need to attend to it. But it is in the why… that we discover the fire, passion, and power….
The what… teaches us what to do. The why inspires our souls.
The what informs, but the why transforms.
Whenever we start something difficult – something that requires discipline and self-control – it is a good idea to begin with the why. To successfully transform your personal finances will take a long-term commitment and will not be possible without the “fire, passion, and power” that comes from the why.
Dave Ramsey, nationally syndicated radio host and best-selling author, has helped thousands of people get out of debt and improve their financial situations. He has done this by focusing more on the why than the what. Speaking on this topic Ramsey said “Personal finance is more personal than it is finance; it is more behavior than it is math.”
For me the why of personal finance is the desire for independence, the hope to retire comfortably someday, and the joy in building something and watching it grow. As I pay off debt, save, and invest I enjoy watching my financial situation improve. I am an investor at heart, and I love putting the power of compounding to work in creating a future that is better than today.
Warren Buffet, perhaps the most successful investor of all time, didn’t have a hard time being thrifty when he was first starting out because he saw every dollar, not as a dollar, but as ten dollars in the future. It is this principle that motivates me.
The why of personal finance for my wife, Alice, is peace of mind and the desire to do more to help others who are struggling. She hates the idea of being in debt, and she has more empathy than anyone I know. Her desire to help others is a powerful why for her.
What motivates you to improve your financial knowledge and habits? Think about it, write it down, and internalize it. You will need to rely on it when things get tough. To be successful in improving your personal finances you will need more than knowledge. You will need the “fire, passion, and power” that comes from the why. I would love to hear from everyone about what motivates you. What is your why?
I like your “why.” I have always had a hard time investing, when I see a larger amount going into the interest of debt. I love to put a little extra toward the principle of a car or mortgage loan and watch the drop in the next interest payment. I guess that, and financial security would be my “why.”
Good to hear from you, Christina. It is intersesting how different things motivate different people. I like paying off debt, but I like investing a lot more. They are both good things to do. Dave Ramsey thinks you shouldn’t invest at all until you are out of debt. I think getting in the habit of investing is so important that you should start investing, at least a little, before you are out of debt, but you can’t go wrong getting out of debt.
My “why” would be first and foremost to lessen stress, because I st mress a lot about money. My second “why”would is the same as Alice’s, to be in a position to help others.
Thanks for the comment. It won’t happen over night, but over time you can reach your goals. Hopefully I can give you some good advice to help you on your way.
Brent, I appreciate your contributions to this topic. I will make it a habit to stop by each week for your updates. I agree with your wife’s desire to be in a position to help others less fortuate…especially being in an ecclesiastical position where welfare needs are great. Being out of debt, or at least being diligent in paying off our debt is my why. Thanks
Thanks Steve. Getting out of debt is a great goal. Keep coming back and I hope I can share some ideas that will help.