When our kids were young, we used to regularly host missionaries in our home on their way to and from the mission field. Most of our missionary friends anticipated supplies they would need months and even years in advance and would shop while on these trips home. Judy graciously hosted them by taking them to the local A&P and Kmart stores—the 1970s answers to Costco and Amazon Prime.
I remember coming home from work one day after Judy had spent the day shopping for supplies with a missionary friend. As we closed the door on our bedroom that night, Judy couldn’t wait to share their experience. “It was remarkable! We turned the corner on the cereal aisle and she just stopped cold. She couldn’t move for a solid two minutes while she looked at the variety of options on the shelves.” The woman had been used to one, maybe two, options for dry cereal for the past few years in Africa. The overwhelming nature of the cereal aisle left her speechless . . . partly in wonder, partly in distress.
As we processed the day together, I had an “aha” moment, seeing the complexity of our culture from our friend’s perspective. Even now I remember this incident and the complexity we navigate when I walk down the cereal aisle. Our daily lives are complicated and growing more so. I am assaulted by complexity when I go with my grandson to his favorite video game store. As I look around, I wonder how he can even begin to know which game is fun, or good, or right for his age, or . . . anything. The options are endless, and I would rather just turn around and walk out!
Financial decisions can be a bit like visiting the cereal aisle or the video game store. When I open my online banking center, I see the transactions float across the screen like a never-ending series of either-or, if-then, because-why decisions I have faced over the last two weeks.
Should we eat in or out tonight? Is my time or my money more valuable after a long day of work?
If my daughter joins the lacrosse team, then she will need equipment. Can we pay for that, too?
Because I signed up for auto-renew on my account, the $79.95 hit me right between the eyes. Why did I do that!?
Every transaction in my account represents choices I’ve made trying to sort through the static of options, but I can be left feeling that my money has morphed into a living being and is eating its way through my best intentions. Saving for vacation? (CHOMP—Maybe next month) Paying off more credit card balance this month? (CHOMP—I guess lacrosse is worth it for her.) Going on a date with my wife this weekend? (CHOMP—That eating out thing we did after we both got home late last Tuesday must have been our date. I wish I’d known!) It seems I’ve fed the money beast to my own detriment. (But there’s always next month!)
If money were as simple as choosing between Cheerios versus Raisin Bran or a fight game versus a racing game, I’d be in great shape. The problem is, deciding what to do with my money feels more like shopping the cereal aisle at the Super Walmart or searching Google for good books. Endless options, limited resources!
Two Fancy Definitions
Now that you and I are suitably depressed over this predicament, I’d like to define our problem by giving it a fancy name that I’ve used in my financial advising over the years. I call this predicament having “simultaneous competing priorities.”
Just to break it down:
Simultaneous: happening all at once
Competing: fighting (and loudly)
Priorities: about options that I really, genuinely think are important
You can see the problem—important stuff fighting for attention all at the same time. Really, I bet that you can FEEL the problem.
Because we have these simultaneous competing priorities, we also face confusing financial decisions.
And so, while we are tuned into this problem, let’s just go ahead and make it worse. My fancy definition for “financial decision making” has always been “the allocation of limited resources among unlimited alternatives.”
Just to break it down (again):
Allocation: choosing how to spend
Limited: not quite enough
Resources: of my hard-earned money
Unlimited: on neverending, all that is “Google-able”
Alternatives: stuff, makes, models, causes, dreams, plans, upgrades, etc.
In short, we want our money to do everything for us that we can envision it doing, but none of us has enough money to make that “everything” dream a reality. We have limited resources. We have unlimited alternatives. We make hard choices by allocating our money toward some alternatives instead of others. Financial decisions always involve this type of choice.
The combination of having “simultaneous competing priorities” and knowing that my financial decisions are the process of “allocating limited resources among unlimited alternatives” causes me to sit up a bit straighter in my chair and say, “Eureka! This explains my angst!!” This reality is the reason why I fuss and strain over the reality on the online banking screen. This reality is why I wriggle internally when I hear something on the radio that makes me think I ought to be saving, planning, spending, or giving differently. This reality is why I fight with my wife about financial things that seem awfully petty, even in the moment. This reality is why I can’t ever seem to get it “right” when it comes to money.
I prioritize savings and grow frustrated with acting stingy and boring all the time.
There are no independent financial decisions. We can spend money any way that we want, but we can only spend it once.
Ron Blue and Karen Guess, Never Enough? 3 Keys to Financial Contentment (Nashville, TN: B&H Books, 2017).
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