In so many areas of life, whether we’re juggling work and family commitments, career demands, or even a yoga class — balance is the key to success. And there’s perhaps nowhere we see this reflected more than with our finances… We ALL have competing financial priorities. In any given month, we may need to: Save for retirement, build an emergency fund, help out an aging parent, save for a child’s college education, make sure we’re properly ensured, take care of all our basic financial needs, and, yes — even have a little fun. In other words, we’re making financial trade-offs every day, whether we realize it or not.
Although everything on our long list of financial priorities probably sounds familiar — familiar doesn’t mean easy. Making everything on this list happen, specifically making it happen simultaneously or at least in the right(ish) order, can feel like a herculean task.
But it doesn’t have to be, according to experts who shared their insight via a special webinar earlier this month: Michael Norton, professor at Harvard Business School and author of “The Ritual Effect: From Habit to Ritual, Harness the Surprising Power of Everyday Actions,” Heather Winston, certified financial planner and assistant vice president, head of product strategy for individuals within Retirement and Income Solutions at Principal Financial Group, and Jean Chatzky, CEO of HerMoney.
Our panel of experts discusses how to understand the pros and cons in every financial trade-off we make.
“I do feel like most often it’s not a question of whether the trade off is a do or a don’t, but more of a question of: ‘Is it right away?’ Or ‘If not now, when?’ and so I always try to help encourage people to put a few steps into place, and it always starts first by thinking about what matters most to them right now — what’s most critical to them,” Winston says. “And then, what do they want to do later? Just simply: now or later. Doesn’t have to be more complicated than that.”
They also dive into how to match your to-do list with your personal priorities.
“We see that using money to buy experiences makes us happier than buying stuff,” Norton says. “Experiences, though, often happen with other people, so, you’re not just buying yourself a trip, you’re buying it for your family or your partner or whoever. But that’s social, and connecting as well and consistent with your values. And so I think a lot about translating money into time: Am I using money in ways that are going to result in better time or not?”
They also offer guidance on how to break down our trade-offs into bite-sized pieces that you can do habitually — for as long a time, or as little a time as you need to.
“Anytime you’re confronted with making those tradeoffs, keep in mind that they’re not an all-or-nothing type of thing. They’re also rarely a ‘forever’ type of decision. So, it’s why I tend to talk so much about the need to take time to really understand who you are and what matters to you, and the things you’re willing to sacrifice today for a better future. But there’s no one size fits all approach,” Winston says. “There’s no magical way of navigating through life to never encounter a difficult setback or to be able to kind of smooth sail through it.”
We also dive into the tough topics of emergency funds, insurance, dependent care, everything else that has a tendency to keep us up at night and make us second guess our decisions.
To find ways to get more confident about your financial trade-offs — and other money and business-related decisions in your life, visit HerMoney.com/Principal.
This story was sponsored by Principal Financial Group®
About Principal Financial Group®
Principal Financial Group® is a global financial company focused on improving the wealth and well-being of people and businesses. In business for more than 140 years, Principal® helps customers plan, protect, invest, and retire, while working to support the communities where they do business, and build a diverse, inclusive workforce. Learn more about Principal at principal.com.
