The Illusion of Financial Balance (and What You Can Strive for Instead)

The Illusion of Financial Balance

If you’re anything like me, you dream about one day finding the perfect financial balance.

That place where every decision you make fits into a plan. Where you’re totally confident that you’re making all the right financial moves. Where you’re free to spend your money as you please because you know that all your future goals are on the right track.

The perfect balance between living for today and saving for tomorrow.

It’s a beautiful dream. But the more I work with clients and the more I experience myself, the more I believe that balance is an illusion. For two main reasons:

  1. No matter how much money you have, there will always be uncertainty about whether you’re using it the “right” way.
  2. There will always be times when life requires you to put more money towards certain things than others.

It’s impossible to be balanced all of the time. And you certainly won’t feel balanced all of the time.

So while the idea is appealing, balance isn’t an incredibly realistic or helpful financial goal.

What you can do instead is build a foundation that allows you to be out of balance without being at financial risk.

You can make it so that a run of unexpected spending is an inconvenience rather than a catastrophe.

You can even make it so that you can invite a lack of balance into your life from time to time because you have the financial resources to handle it.

Here’s how to do it.

Why it’s normal to feel out of balance

Let’s take a quick step back and look at why it’s almost impossible to feel like everything’s in perfect balance for any extended period of time.

Quite simply, life moves too fast. There are too many life events, some chosen and some not, that will throw you out of balance in ways both big and small:

  • You have a baby
  • You change jobs or switch to a single income
  • You buy a house
  • Your radiator breaks
  • You go on vacation
  • You go all-in on paying off debt
  • Your child starts college
  • Your parents need financial help

All of those things can eat up your time, energy, and money and throw your day-to-day life way out of balance. And while some of them are unavoidable, some are things you’ll actually want to do.

You can’t avoid being out of balance. The big difference between success and failure, then, is what the consequences are when things get a little out of balance.

Are bills missed? Does credit card debt pile up? Or do you have the resources to handle it until things get back to normal?

The goal isn’t to feel balanced all the time. The goal is to make sure you’re financially okay even when things aren’t balanced.

How to be okay with a lack of balance

From a financial perspective, there are two things you can strive for instead of balance:

  1. Security comes from the knowledge that you can provide for your family’s basic needs no matter what.
  2. Freedom comes from the ability to make life choices you enjoy without money holding you back.

Like the idea of balance, security and freedom are feelings. And because they’re feelings they will wax and wane a bit in your head. Sometimes you’ll feel like you have them and sometimes you won’t.

But they’re also real, concrete financial goals that you can reach and that will keep you afloat, both financially and emotionally, when things get out of balance.

Let’s take a look at what goes into each and how they help you maintain financial stability, no matter how things actually feel.

How to build financial security

Security is one of the most basic human desires.

You want to feel safe. You want to know that no matter what happens, you’ll have the resources you need to survive. And you want to make sure that your family will continue to have those resources as well, no matter what happens to you.

From a financial perspective, that means knowing that you can always pay your bills on time. It means knowing that food, shelter, and clothing are a given. It means that your kids can go to school every day ready to learn and take on the world.

In some ways, security is a feeling that you can handle all of those things no matter what life throws your way. It’s a confidence, a lack of anxiety.

But financial security is also a real thing that you can actually build. It’s a thing that can exist even when the feeling changes through the ups and downs of life.

Here are some concrete ways you can build that security into your financial life:

Having those things in place won’t make you feel secure all of the time. You’ll still have bouts of worrying about this or that, and there will still be unexpected things that stress you out because they cost way more than you expected. I guarantee it.

The difference is that when that happens, you’ll be able to handle it it. The consequences of being out of balance will be minimal because of the financial security you’ve built.

So when your anxiety level peaks, you’ll be able to comfort yourself with the fact that it will be temporary. Maybe you’ll have to take a little more out of savings than you wanted, but all your bills will still be paid and pretty soon everything will be back to normal.

How to build financial freedom

Financial freedom is simply the point at which your financial situation allows you to do what you want with your life.

That could mean switching to a single income. Quitting a job you hate. Taking extended time off to travel. Sending your child to the right school. Or flying your family cross-country for your friend’s wedding.

It doesn’t have to be anything grand. It’s simply the ability to make the lifestyle decisions you want without your financial situation holding you back.

And in many cases, it means inviting a lack of balance into your life.

Take a look at the examples above. They all involve either a decrease in income or an increase in expenses that would disrupt your day-to-day finances, at least temporarily.

That kind of disruption will almost certainly be stressful, at least in a small way. But with the right financial pieces in place you could do any of them without risk of any real financial harm

And the good news is that financial security is the first step towards this kind of financial freedom. With those protections in place, “risky” decisions are a lot less risky, giving you room to make alternative choices in pursuit of a life you actually enjoy.

But you can go even further in building your financial freedom. For example:

The less you owe to others, and the more you have yourself, the more freedom you have to make decisions that improve your quality of life, even if they throw your finances out of balance for a little while.

This too shall pass

Objectively, I feel good about my family’s financial situation. We’re certainly not rich, and we have plenty of limitations in terms of how we can spend our money.

But by and large we’re able to do the things we want to do and we’re able to handle the unexpected expenses that come up without much harm being done.

And I still spend plenty of time feeling out of balance. There are times where my spending feels a little out of control, where I don’t know whether I’m making good decisions, and where I feel guilty that things aren’t in better shape.

And I think that’s just the reality of life. Nothing is ever in perfect balance, and it certainly doesn’t always feel like it’s in perfect balance.

But with the right financial pieces in place, you have the luxury of saying “this too shall pass”. You know that any lack of balance is temporary, that you can handle it, and that soon enough things will feel normal again. At least for a little while 😉

That’s a goal worth aiming for.

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7 Comments... Read them below or add one of your own
  • Brian @ Debt Discipline September 6, 2016

    Dumping our debt and building an emergency fund really help reduce stress in our lives and gave us peace of mind for the unexpected. We still have ups and downs, but they are mere speeds bumps now and don’t cause us to panic when they occur.

    • Matt Becker September 6, 2016

      Yep, that’s what you’re looking for! Speed bumps instead of brick walls.

  • Matt @ Optimize Your Life September 6, 2016

    I really like this perspective. I think you may be right that striving for balance is the wrong goal and that we should be focused on security and freedom instead. I will have to try this framing for a while and see how it works for me.

    Thanks for the insightful post!

  • Britt September 6, 2016

    This is great advice! As someone who is pretty Type A, I can always use the reminder that striving for perfection is futile. Developing and sticking to a plan will greatly reduce the bumps, and will provide smoother recovery from them. Thanks, Matt!

    • Matt Becker September 6, 2016

      Haha, I can definitely relate to being Type A and always feeling like there’s something that could be improved. It’s a constant battle!

  • Mr. PIE September 6, 2016

    Big fan of balance in our quest for FIRE. Good read this!

    As a scientist, I think of it as an equilibrium. I won’t bore you with Le Chatelier’s principle but it basically states that every time a system is subject to change, it will readjust to counteract that change. Very important principle in chemistry (my field) and I would say living in general.

    • Matt Becker September 6, 2016

      Ooh, I love the science angle there. And that’s a great way of putting it.

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