Setting your money "normal"

How you define your money normal impacts your life in huge ways: your ability to pay your bills, educate your kids, buy a home or retire in comfort and security.

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You look in the mirror and see your face. You see what you always see—eyes, nose, mouth, ears. It's normal.

You grab your toothbrush with the same hand every day and brush your teeth. It's normal.

You select your clothes based on occasion, mood, weather—and dress in a specific order each time. It's normal.

When it comes to money, you have a normal too. But that doesn't make it effective, efficient or even appropriate. It's just "normal".

Whether you grab your toothbrush with your right hand or left or put on your socks before your pants is irrelevant to the quality of your life, happiness or success. But how you define your money normal impacts your life in huge ways: your ability to pay your bills, educate your kids, buy a home or retire in comfort and security.

Some people believe that you save regularly and stay out of debt. Others believe that the future is unknowable, so what the heck? Enjoy today and don't worry about it. We ultimately define our actions based on our habits and what we believe is appropriate or in our best interest.

Jim grew up in a family that stressed saving money—it was not to be spent frivolously. When Jim started his first job, he signed up for the company's 401(k) plan and elected to save the maximum allowed; he never gave it a second thought. Saving first and spending what was left was ingrained. Now, as Jim is beginning to think about life after work, he has saved a tidy sum and could choose to stop working now. He has few wants beyond taking care of his family and educating his children. He and Joan love to travel and have found ways to take advantage of great deals and off-peak rates.

Sam grew up in a family where he was never denied anything he wanted—his parents lived a lavish lifestyle. They never talked about money, leading Sam to believe that it just arrived to be spent on fun things. When Sam joined the workforce, his only option was an entry level job that didn't pay very well. He wanted to live in a nice neighborhood, in a nice building and enjoy fun times like he had in college. Money was never an issue until his parents informed him that their support was over. Sam used credit cards to try to maintain his lifestyle until the cards were maxed out and he'd buried himself in a pretty deep financial hole.

Both Sam and Jim believed that their approach was normal. And it was, for each of them. But the consequences were very different. It wasn't a matter of wrong or right—it was simply their normal.

Sam's realization of the dire situation he was in led him to the discovery that his beliefs were causing pain and suffering. Only through that careful understanding was he able to make shifts in his thinking and behavior that helped him break the cycle of destructive actions into a new normal.

What is your "normal"?

Does it bring you closer to your happiness, satisfaction, comfort and security? If so, pass it on! If not, perhaps it's time for a new normal…

Topics:
  • Financial Planning
  • Saving and Spending
  • Starting Out
  • Financial Planning
  • Saving and Spending
  • Starting Out
  • Financial Planning
  • Saving and Spending
  • Starting Out
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This article was written by Michael F. Kay from Forbes and was licensed as an article reprint from January 26, 2016. Article copyright 2016 by Forbes.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third-party provider of the reprint permission and Fidelity Investments are independent entities and not legally affiliated.
The images, graphs, tools, and videos are for illustrative purposes only.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917.
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