A Question For Every Financial Choice

Too often when we’re making financial decisions or planning for the future, the default target is simply more money.

Early in our financial lives, this simplistic point of view is logical. We simply need more… to pay off student loans, to buy a house, to cover childcare, to pay off credit cards, to cover medical bills, to invest for retirement, and so on. People often cite that money can’t buy happiness, and while that’s true, it can solve a lot of problems that weaken our well-being.

But once you have a foundation settled and debts managed, either paid off or on a reliable payoff plan, what then?

James Clear, author of Atomic Habits, often asks, when discussing habits and productivity, “What are you optimizing for?” I wrestled with this framing for a while. Because when we’re talking about time management or money management or work productivity, we tend to keep the discussion stuck within each of those spheres.

But the crux of this question actually makes us break out of any particular life sphere and look at the bigger, connected picture.

What are you optimizing for?

More money? More free time? More impact? Or something else entirely?

In James’ work, he talks about time and productivity, comparing a work routine and habits that optimize for greater revenue, more clients, more output, and so on, compared to the cost of going in that direction to the rest of your life.

Do you want to charge more per hour so you work as many hours but make more money? What is the cost to your time available for other things? Or do you want to increase your rates to optimize for less time spent working while making the same amount, and thereby increasing time for other things?

Too often we aim for more – more hours, more pay, more efficiency, more investments – but without questioning whether that change is being leveraged towards our larger goals or not. And without weighing the cost of that aim.

In your finances, if you’re working to spend less money on eating out and impulse purchases, is that because you have a specific purpose for those dollars instead? Are you optimizing for frugality for its own sake, or for lowering your cost of living to enable working less or retiring earlier?

Will you divert that money to increase your savings for a bigger house?

Or divert that money to pay off the mortgage on your current house and live mortgage free in a smaller, older place?

Same action, different end goal.

You must know what you’re optimizing for.

So the next time you’re questioning your financial decisions or preparing to make a new one, make sure you know what values you’re maximizing or minimizing, what priorities you’re elevating or demoting.

The race for more will never end. But the goal of choosing to be satisfied and optimizing for a tangible overall quality of life is attainable.

Remember to ask yourself, “What am I optimizing for?”