My wife and I recently started a parenting class. The first lesson of the class was titled "The Principle of Why". Understanding why you are doing an action can be very helpful in parenting.
The principle easily transfers over to personal finance and business (read Simon Sinek’s book Start With Why). Behind your actions, there should be a "why" that is guiding it. Knowing the "why" gives meaning to the tasks you are doing and helps you adapt if the task you are doing isn’t working.
For example, if my “why” is I want to eliminate my debt so I am no longer a “slave to the lender” then you may start looking for ways to cut costs so that you have more cash to pay off the debt. What happens if you can’t find a way to reduce cash flow? Do you give up? No, there are other ways to start eliminating debt. For example, you could start looking for opportunities to increase income. There are sometimes multiple “hows” that help you reach the “why.” If you know the “why,” it is easier to adjust when a "how” is broken.
Knowing the “why” can help you navigate questions such as:
Should I pick up this extra shift or spend the day relaxing with my family?
Should I contribute to my Roth IRA or remodel my kitchen?
Should I give to this charity or pay for a family getaway?
I will fully admit actually being able to articulate the "why" behind what you are doing can be difficult. My encouragement is to just attempt it. Take time, either on your own or with your spouse, to ask "Why do we do the things we do?" You may find some adjustments that can be made to better satisfy the "why."
Interesting Article(s) or Video(s)
Calibrating Capital - Why Do We [Truly] Do What We Do?
Jeremy brings a new perspective to the principle of understanding "why." We sometimes have a Noble Why and Nefarious Why for the same action. Excellent read.
Thank you for reading!