We’ve all been in situations where we’ve felt the urge to do something really badly. Be it start a business, go to a restaurant, purchase an item, meet someone or simply get in touch with them—whatever it may be. The urge can come about strongly and suddenly. It can feel overwhelming when it manifests inside you. You feel you really want and need something or someone. The need or the urge is so strong that it’s hard to ignore.
Sometimes you go ahead and do those things. Sometimes you find an even better option in the interim. Sometimes you just tell yourself, “Not now.” That final option of not now, we usually term as delayed gratification. Yes, you can have it, but not right now. We all go through these phases in our lives.
Then the day comes when something that we really wanted or thought was important to us—is offered to us and presented to us later than expected. In the interim, we had been doing research and gathering information. We had been moving beyond the urge and into a place of knowledge. Then, it happens. Something that we wanted is offered to us. But it’s offered to us at a point in time when we don’t actually want it anymore. We’re already over it. The urge has ceased to be.
At that point, it stops being delayed gratification and starts being, “Oh, this. I needed it six months ago. Now, I don’t need it anymore.” It’s no longer a priority, a necessity or even a desire. You’ve stopped needing it.
Through the passage of time, you naturally stopped wanting it. At the very end, you think, “I didn’t want it at all in the first place.”
But the deeper question has gone unanswered: why did it I even want it in the first place?
It’s a strange experience to go through. When we think about this concept in the context of money, it’s something that a lot of us will experience first-hand. But until we experience it, we can’t see the forest for the trees. We’ve been so stuck on something without ever knowing why.
What is financial sense? Financial sense is about knowing your deepest needs. It is not about being swept away by what is on offer or what you think should be offered to you.
A lot of times we go out, go shopping or go out to buy something. We see something in the window that we liked and that looked beautiful. When you go window shopping, everything is designed to look beautiful. You walk past and you say, “Oh, I really want that. That’s really nice. I want to bring it home.”
The first couple of times, I did it. But the second time, when I went back, the urge wouldn’t be there to do it again. I didn’t feel compelled anymore. But what compelled me to do it the first time? Why didn’t I feel compelled anymore? I was over it. Sometimes the compulsion we felt in the early days starts to morph into repulsion. At that point, we either grow indifferent or we go out of our way to avoid it.
These things happen.
Something appears to be really attractive at the time. But once you try it, once you give it a shot—you think, “No, this is not really what I want. This is not what I need. This was not a good decision.”
Whether it’s a small item, like a plant; or a big item that requires a huge outlay. The dollar value of an item has nothing to do with my deepest desires. But you can only reach that conclusion once you’ve given it a try.
When we try something or explore our options: that’s when it hits us whether or not it’s the right option for us.
If you’re lucky, you have people around you who tell you, “Don’t make this decision.” But somehow, you feel compelled. You feel this momentary urge to do this thing. The odd thing is: even when it goes all haywire, you don’t tend to regret having done it—as long as you got out in time. It’s like the ‘Get Out of Jail’ card in Monopoly. You pay a sum of money and you’re out of there.
The trick is not to overstay. You don’t feel the regret even if things weren’t great in the end or you didn’t get the outcome you wanted. This is a big part of financial decision-making as well as risk-taking.
Can you actually see the financial decisions that you are making? Many of your financial decisions are already made for you without you realising them. The amount your employer will pay you, the cut that the taxman will take, the health insurance premiums you have to pay and so on and so forth.
How can you become a financial decision-maker, then?
It’s not that complicated. It’s about understanding the deepest need that leads you to make those decisions. So what is your deepest need?
To me, the whole idea of financial independence is a myth as we’re all connected to each other—especially when it comes to money. It’s not about the work you do or not do. It’s boils down to knowing the price of everything. What does it cost you to be who you are? What is it costing the people around you?
When you make a financial decision independently, have you considered all the various factors involved? Financial decisions, you could say, should never be made independently because they cannot be made independently. That is not the purpose of finance.
To me, financial sense is about fiscal understanding. What is your true treasure? What are your deepest needs beyond the superficial want that catches your eye momentarily? This works on both sides of the equation: be it income or expenditure.
So what is your deepest need when it comes to your income? And what is your deepest need when it comes to your expenditure?
Once you can answer those questions, which will not be easy, of course, for it requires you to look deep within yourself; I assure you that once you have gotten to the bottom of it, you will finally start to make financial sense.