A while ago, I met a friend who was very enthusiastically planning her next vacation. This seems to be what she is doing almost every time I meet her. She works full time and yet, most of her conversations are around where she travelled last and where she will go next. Travelling is what drives her or, to quote her, “I work to travel”. The concept can sound surreal. To have a specific reason why one earns, other than “to pay bills” is a dream for so many. It got me thinking that it need not be.
So often I have discussed the need to budget and to plan finances for the purpose of creating a “nest egg” for specific uses. The tricky part is that, with money, it is usually “the more the better” or “spend now think later” that drives any given individual at the very core. It’s almost never an actual focused approach. That, to my mind, makes all the difference in the way one experiences money.
If you have the spend-now-think-later mindset, the budget and nest egg for any given activity will be easily pushed north. That’s because the ability, or rather the desire, to really compromise is not strong enough. The need to spend or invest in current expenses overrides. This means that often, bills are paid at the last minute, credit is taken and money can be a stress.
If you have the more-the-better mindset, life is not much easier. Likely, you may have an actual surplus of funds and the option for flexibility, but the knowledge that any expenditure depletes from your nest egg is a stressor and reduces the joy of that expense. Its unlikely you delay bill payments or that you really take on any reckless debt. However, no money you have seems enough to give joy and, again, money can be a stress.
So, are we all doomed to be in this loop? Perhaps, but, like most aspects of life, there are coping mechanisms that can be used to deal with it. Budgeting is obviously not a clear answer because of the above issues. Add this to a family mix where one family member may have one mindset and another a different one, and it’s easy to see why finances are such a source of discord.
To me, the answer lies in creating a compulsory, goal-focused and very specific “experience nest egg” for each member of a family. Yes, it is budgeting, but it needs to meet a few other criteria to be effective. One, it must be focused on each individual’s experience requirements; two, it must be small in proportion to the overall nest egg; and finally, it has to be set solely by the individual who will use it.
This could be small amounts – BD20 saved each month is enough to give you BD240 at the end of the year, which could mean a ticket home. Or it could mean BD20 invested or saved each month, which gives you a larger nest egg to begin the next year with.
So, if you like to save, you can grow your individual nest egg and experience the joy of its growth. That leaves the family holiday and experience budget to be enjoyed better knowing one bit is intact. If you like to spend, you can spend the nest egg on things that give you joy in addition to the family nest egg for experiences. Either way, those vacations or experiences will be richer by BD240 one way or the other.
You can follow Pria on Instagram at money_cues or visit http://www.i2d-consulting.com to know more about her professional experience.
