How Understanding Your "Why" Can Transform Your Finances
May the Force Be With You... and your financial future.
“When we know WHY we do what we do, everything falls into place. When we don't, we have to push things into place.”
—Simon Sinek, author of "Start with Why"
We all have dreams and things we want, whether it's a big house, a fancy car, or just enough money to support our families.
But why do we want these things? Understanding the reason behind our desires is more important than just knowing what we want.
Think about it this way: knowing what we want is like having a destination in mind. It gives us something to aim for. But without a strong reason why we want it, we might lose motivation and give up on our goals.
Imagine wanting to save $100,000 by age 30, a popular goal in the financial world. That's the "what."
However, if you don't have a good reason for why you want that money, like wanting to take care of your family, you might not feel motivated to save.
The Compass for Your Financial Journey
A clear "why" is the fuel for your financial journey.
It motivates you to research different investment options like stocks and bonds. It pushes you to create a realistic budget and prioritise saving even when faced with tempting splurges.
It's like having a guiding light that helps you stay focused on what's important to you. It gives your actions meaning and helps you stay committed during market downturns, which is a common occurrence in the stock market.
For myself, my “why” behind investing is to provide the best for my family. Knowing my “why” also anchors me down to make sure I set my horizon over the long run and not on short-term market movements.
Remember, the "what" is your destination, but the "why" is your compass. It will guide you through financial decisions, big and small, and keep you on the path towards achieving the life you truly desire.
Actionable Tips to Find Your Why
Brainstorm: Grab a pen and paper and write down everything money could buy you. Then, ask yourself why you want each item. Dig deeper! What experiences or feelings are you truly seeking?
Vision board: Create a vision board filled with images that represent your financial goals. Include pictures of your dream home, travel destinations, or charitable causes you care about. This visual reminder will keep your "why" at the forefront.
Talk it out: Discuss your financial dreams and aspirations with your spouse, trusted friend, family member, or financial advisor. Talking it through can help you clarify your "why" and gain valuable feedback.
If you can’t spend some moments alone right away on the exercise above, do schedule some time on your calendar to do so. It will set the correct foundation for you.
As Master Yoda would put it, “Always in motion, the future is. See it clearly, only with a strong why, can you.”