The Secret to a Successful Financial Plan

Let's revisit the first part of a post a few months ago: Fill in the Blank: I Don't Want to Spend Money On..

When you think about all the things you hate paying for, it's easy to fall into the negativity trap. So many of those things seem well out of our control, don't they? Car insurance just isn't one of those things you can up and stop paying for. Neither is that mortgage payment.

So I want to be very clear about why this is a valuable way to spend some of your time, because listen: this isn't an "I'll be happy when..." exercise. Moping through your life telling yourself that all you need is a paid off house, or kids who finally pay their own way, or X number of dollars in your savings account to be happy is a loser's game.

I have learned the secret to a successful financial plan, and it's this: intentional contentment.

First: contentment isn't a passive, let's-fold-our-hands-in-our-laps-and-act-happy-about-everything-that-happens-to-us state of mindlessness. It's an active attitude of "we can do hard things because hard things are worth doing". It's difficult to cultivate and maintain in the face of life's many disappointments, but although it sometimes resembles giving up and submitting to the status quo (from the outside, at least), it's a conscious, mindful decision that most people have to make every single day in the face of (sometimes) incredibly hard realities.

There's an aura of perceived failure around someone who isn't in a position to make any big changes in a life that looks pretty unfulfilling from the outside, isn't there? A lot of the rhetoric around poverty seems inspired by the "you should be doing something to make your life better" success mindset we as a society have idolized for more than a century.

But contentment - as unfashionable as it sounds - is actually the only consistent key to a successful financial plan. Because the truth is, a financial plan isn't really a plan at all, although it shares many of the same characteristics like action items, measurable goals, and policy statements. You and I both know that your formal financial plan could expire the day after you read it if you lose your job or your house burns down or one of your kids gets really sick. This year's savings might fall by the wayside. You might end up further away from your debt-free date than you started.

Contentment is the opposite of fear and greed and restlessness. It's the quality that allows you to look around your life, identify the things you're grateful for, those things from which you can extract the most joy at the least cost (and we're not just talking money), and consciously choose to orient your life around doing or having more of those things.

If how you spend your money every day is your most important financial characteristic, shouldn't you be content with it? If you're not content, why not? What can you do to change your circumstances or - if you can't, or if change will be a long time coming - what can you do to change your attitude about your circumstances?

Combing through your expenses and identifying the ones you hate paying for is not the opposite of cultivating contentment. It's the first step in a series of decisions that smart people make. Getting very, very clear about you don't like about your current situation, defining the direction you'd like to travel in to get closer to the things you do like, and then creating systems to help you get there? That's real financial planning. The rest of it is just math and details.

A strong set of contentment muscles are what gives you the energy to be flexible when life happens. Someone practiced in the art of finding happiness and fulfillment wherever she happens to find herself is already mostly prepared to adjust her spending downward in the face of post-retirement market declines, or defer the much-desired house because she's just not earning enough as soon as she thought she would to make it a wise purchase.

Listen, contentment in your direction is what gets you to your goal. A goal is a real, measurable thing: start my own profitable business by the age of 34. Pay off my mortgage by the age of 48. Save enough to live happily off of my investments and only work if I want to by the age of 57. Those are goals. They can move.

A direction, however, is a total orientation of your life towards reaching those goals. It's what you do the day after you read your plan, and the systems you put in place to get and keep you moving towards your goals, whatever those may be: planning meals within a pre-determined weekly food allowance so you can save for a house, for example, or learning how to code in your spare time so you can increase your salary or start a business, or taking public transit so you save your car expenses towards financial independence instead.

The daily practices of a life with direction can either be onerous, and chafe so much that you give up or grumble your way through a miserable life, or you can settle into them with an attitude of contentment and get happy on the way to your goals, not just when you eventually reach them.Your choice.