Personal Finance is Not About What You Can’t Have

It takes many forms.

“Denial isn’t just a river in Egypt.”
–Stuart Smalley

There was once a time when I pretty much turned a blind eye to what was happening with my personal finances. Well, I didn’t turn a blind eye. I at least paid the minimum payment on my credit card and invested money in my IRAs, but I wasn’t nearly as diligent about keeping my affairs in order as I could or should have been.

Part of the reasoning behind my poor behavior was because I was living in Germany, and Monkey Brain kept telling me that I was only going to be there one time, so I needed to live it up while I could.

For those of you who are new here, Monkey Brain is what I call the limbic system. There are two main thinking parts of your brain. The prefrontal cortex, or Thinking You, is the one that is responsible for making you a higher order of species than the rest of the animal kingdom. It is like the responsible person in a bachelor party – the one that is supposed to make sure that everyone gets home safely and doesn’t have too many scrapes, bruises, and lurid stories. The prefrontal cortex actually thinks and cares about the future. Without the prefrontal cortex, you wouldn’t have literature, music, or reality TV.

The other main system in the brain is the limbic system. The limbic system was predominant when we lived in caves and chased woolly mammoths. It is quick, emotional, and almost entirely unconcerned with anything more than a few minutes into the future. It wants pleasure, and it wants pleasure now, so it affects your actions by whispering sweet little nothings into your ear, and subjecting you to all sorts of behavioral biases that convince you that you can’t live without that man cave or those Jimmy Choo shoes right now.

When I was younger and carefree, Monkey Brain was strong within me. He would portray my situation as me versus them, with them being people who wanted me to be responsible with my money so that I couldn’t do what I wanted to do. It wasn’t like I didn’t have pangs of remorse, guilt, and outright questioning myself for my behavior when I’d open up those credit card bills with ever-increasing balances. I’d wonder if maybe it was time for an intervention when Monkey Brain would figuratively pipe up:


Me: “You’re right. I can’t have fun unless I’m spending every last dollar I have in credit! Charge it!”

I had the wrong mindset. I was framing my choices in terms of denial. To live responsibly, I felt like I had to give something up.

As we saw in “Why Denying Yourself Doesn’t Work in Diets or in Personal Finance,” denial is the wrong approach.

Plus, it’s the incorrect approach.

Personal Finance is About What You Can Have!

Yes, when you’re having to take away money from the budget right now to do things in the future, it really does feel like being a responsible, all grown-up adult means living in denial. However, changing your perspective can mean a great deal in helping you come to grips with the habits you need to establish to reach your goals.

Having a plan enables living guilt-free

No matter how much of a blind eye you want to turn to your financial situation when you don’t have a plan that you are living with, you know, somewhere deep down inside where Monkey Brain dare not look, that something isn’t right. You tell yourself that you need to get your act together, and that little voice refuses to shut up (which, by the way, is called the Zeigarnik Effect). It’s not like you don’t know the basics of personal finance, even if you’re not abiding by them.

I remember two watershed moments in our journey.

The first was when we’d paid off all of my credit card debt (by the way, MBNA is still the dirtiest four-letter word I can use in our household, even though all they did was enable my bad behavior). The next month, we paid for everything with money we already had in the bank. It was a wonderful feeling not having that anchor of consumer debt slowing us down.

The second was when we had already set enough money aside to pay for our ten year anniversary trip to the French Riviera. Previously, even though we wouldn’t run up a balance on the credit card, we’d use a credit card on our vacations and then pay it off when we got back with money from the next paycheck. While we weren’t carrying debt, we were sort of spending off of the next paycheck. Then, we started budgeting like we should, and we had plenty of cash ready for our big vacation. I remember as we’d go to little bistros or restaurants or buy a bottle of wine at the store, I’d think, “This is already paid for!” – meaning that we already had the money to pay for whatever we didn’t pay for in cash on the trip.

We make intentional decisions about what we are doing with our money, within the framework of our plan, and then we spend the money like we decided we were going to. It makes our leisure, fun, and travel much more fun because we don’t have guilt about what we are doing.

Having a plan enables you to retire at a reasonable age (and sometimes sooner)

Had I not gotten out of the military (and married an awesome spouse), I can imagine that my career would have followed the trajectory of many others who had gone before me. I’d have retired from the military as a lieutenant colonel, received a retirement, and immediately discovered that it wasn’t enough to cover my bloated spending habits. I’d have landed a job at a Department of Defense contractor and worked another 20-30 years until I could get a retirement check from them. At that point, I’d realize that my two retirement checks and Social Security would mean I’d have to do some serious cutting into my lifestyle, and I’d either reconsider my retirement date, or I’d be miserable thinking about all of those salad years and wondering why I didn’t save more.

However, thanks to the interventions of Fate and some wise decisions, that story will only remain fiction in my life. I’m not the only one, either. I have client engagements where they want me to do a sanity check on whether or not they’re going to be able to retire when they think that they can retire. Fortunately, I’m almost always able to tell them to proceed full steam ahead, and they all have one thing in common: they were diligent and lived with a plan and spent their money accordingly.

Having a plan allows you to focus on what you can have

A true plan will align neatly with your values in life. You will spend money on the things that are important to you, allowing your actions to match nicely with the mental picture you have of yourself. There will be harmony and birds will sing.

The important aspect of having a plan is that it gives you timeframes and an understanding of the actions that you need to take to turn the things you’ve dreamed of into reality. It isn’t magic. It won’t allow you to purchase the Biltmore if you’re not a billionaire already. But, it will convert the “I wish I could…” thoughts in your head into the “I can…as long as I…”

You can’t have it all, despite what the Virginia Slims ads promised. But, you can have things that are important to you and align with your values. Furthermore, by having a plan, you get to choose what you work towards and what you will achieve, which gives you a sense of power and strengthens your feeling of self-worth and accomplishment.

Once you have a plan and are focused on what you want to achieve and have chosen what you can have, you tend to forget about all of those things that you told yourself that you couldn’t have.

You focus on choice. You focus on positivity. You gain appreciation.

Most importantly, since you have control, you gain happiness.

That’s what it’s truly about – increasing your happiness.

Published by

Jason Hull was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business. He held a CFP certification from 2015 - 2021. You can read more about him in the About Page. If you live in Johnson County, Texas or the surrounding areas, he and his wife are cash buyers of Johnson County, Texas houses.

4 thoughts on “Personal Finance is Not About What You Can’t Have

  1. Its worth having a plan and pursuing it. I like your characterization of Monkey Brain. I think many people fall victim to it. But really you can live well and be financially responsible. They aren’t necessarily in competition with each other.

  2. Hi, you seem to have closed the comments on your previous post, despite the invitation to comment, but I had already drafted the story until I came to the … non-existing comment form: I actually had a case where a young man wanted to go back to study (he was working as a waiter before that) and while studying he would have less money so he asked if he could sub-let the apartment, i.e. one room, to another student in order to share the rent. well, I let him and he collected the other student’s rent (whatever he may have charged him) and paid the rent as before. until he didn’t. Now I realized I was in a ludicrous situation: HE collected rent from HIS tenant, while I did get neither his nor the sub-lease money. Which taught me a lesson. Eventually he moved out before the bailiff had to be called and the other tenant did too, because legally, in that jurisdiction, I ran a risk of going to court twice to also get rid of the other tenant who legally had no connection with me. Which taught me a bit about the numbing stuff and never to allow sub-letting but sign a separate lease if it ever happened again.

    1. Ah, you were trying to comment on this one:

      I close comments after 2 weeks. I find that the spam/real comments ratio is about 1000:1 after 2 weeks.

      I feel bad for the subletter who thought he had legitimately paid the rent! I think in those situations, I’d just get a separate rental agreement from each tenant like you suggested. I once rented a house in a low income neighborhood to a Section 8 tenant who then let her boyfriend and his buddies come in and sell pot and goodness knows what else from the house. That was a mess, but, fortunately, for other reasons, I’d already given the SWAT a copy of the keys, so that helped a lot!

Leave a Reply Cancel reply