I read an article on the Farnam Street blog, 5 Mental Models to Remove (Some of) the Confusion from Parenting and was struck by the similarity between the common pitfalls with parenting and personal finance advice and the approaches we often take:
"Few topics provoke more unsolicited advice than parenting. The problem is, no matter how good the advice, it might not work for your child. Parenting is the ultimate “the map is not the territory“ situation. There are so many maps out there, and often when we try to use them to navigate the territory that is each individual child, we end up lost and confused. As in other situations, when the map doesn’t match the territory, better to get rid of the map and pay attention to what you are experiencing on the ground...
...As in any other area of your life, developing some principles or models that help you see how the world works will give you options for relevant and useful solutions. Mental models are amazing tools that can be applied across our lives."
Are you caught up in tactics without a clear mental model or strategy?
Many of us save a few bucks every month, stash money yearly in our kids 529s, and invest in our company's 401k plans. All super good things to do, but will it get you to where you want to be? Do you have a set of family goals that inform all areas of your strategy? Here are a few of mine:
I want my kids to be self-reliant adults who will make a difference to society. That means I am comfortable if they fail often, as long as they win in the long run. They play a variety of sports, play violin or the sax and arent bashful about speaking Spanish to a stranger. If you have heard a 10 year old practicing violin, you know the sound of failure. And we save each year so they can go to sleep away camp for part of the summer, where they learn how to make friends and learn on the fly.
I want the freedom in my own life to make choices not based entirely on finances. That means I invest part of every paycheck, whether the market is up or down, so that I can create long term wealth. And we prioritize traveling for new and unexpected experiences. That means Jenn and I have a weekly family budget and stick to it, even if we have to forgo some fun now.
Are you living by tactics as you go? Have you developed a set of guiding principles? If you haven't, you are not alone. Want to live free of financial burdens and have peace of mind? You'll need a strategy and a plan. I can help.
Let's talk about your personal financial goals. Contact me to set up your free consultation.