I think that there are few absolute black and white rules which should be followed by everyone. After all, we're all different with different priorities and resources. What's right for me may not be right for you, and, in fact, what was right for me ten years ago may not be right for me now.
But I find it useful to have a set of indicators to alert me when an area of my life could probably use some attention to make sure I'm still on the right track. And I think that those indicators are relatively universal. Certain things should raise some alarm bells in all of us, even if our responses to them may be different.
I think of these things as a background monitoring process. I generally assume that I'm on a good path and don't worry about much, but when one of these indicators comes up, I pause and use it as an opportunity to either recalibrate, or to confirm that I'm still on the right path.
What I'm primarily trying to avoid is a negative spiral. Those often start slowly and then accelerate so quickly that it takes a lot more effort to get back to where I was than it would have taken to just stay in a good place. An analog would be debt — the more money you're spending paying interest, the less you have for things that matter.
The following are a few of the most important indicators to watch, along with some thoughts on them. You could use this as an opportunity to self-assess and see if any of these alarm bells should be ringing for you.
Decrease in Health
This means different things to different people, but gaining weight (or losing weight), aches and pains that weren't there, mental fatigue, etc. Health is such a complicated category that these sorts of things creep up and become the new normal after a while, so it's good to catch things early. If I have any health stuff come up, I immediately look at diet, exercise, and sleep. Usually one or more of them has slipped and needs attention.
Changes in Spending
I believe that ones spending should be fairly independent of ones income. That's a much longer discussion, but the short version is that you should base your spending on the amount of money you have saved, no the amount you earn. Then you buy things based on their utility and value, not just because you have the money for them.
However, I've noticed that whenever I have a windfall or jump in income, I have a tendency to spend more money. This year I bought a new (used) car and built a cabin on the island within a short time span, so that served as a warning and I made sure that they were one-off purchases, and didn't reflect me getting lazy about saving money.
Disengagement with Work
For several years I worked really hard on Sett. There were easy times and hard times, but I was "in it" for almost the entire time. Near the end I realized that I just wasn't engaged with the work, no matter the difficulty level.
That caused me to take an honest look at what I was doing and decide to stop working on it. Other times it's made me realize I need to fix my work habits or focus on a different area of the business.
Too Much Comfort
This is an alarm bell that has been ringing for me recently and I'm still processing it. My reasoning is that progress generally comes with some amount of discomfort, and if I'm feeling too comfortable then I may not be making progress.
While I think there is some value in making yourself uncomfortable just for the sake of being uncomfortable, sometimes that's a way to avoid being uncomfortable in the area you most need it. So in this case I think it's best to think about where you're holding yourself back due to fear.
There are a billion other indicators you could have, but these are a start. In general, consider the practice of setting up triggers for you to evaluate your habits and lifestyle to decide if any change is necessary.
Photo is the Hungarian Parliament building in the background and some pigeons in the foreground. My family has been visiting me here and it's been a blast showing them around.
Next I head on a cruise back to the states. Planning on finishing up Life Nomadic II and then getting cracking on this year's gear post. I have some pretty cool updates this time around.
Totally agreed! Comfort is the enemy of progress. I'd rather go to bed at 3am, exhausted after having worked on my passion projects, than live that comfortable life. At least I know I'm moving in the right direction.
This is a useful list. I wonder if you have any more. Some other ones I use:
I think that the way most people spend money is absolutely nuts. I see people buying things they can't really afford, or things that will have no lasting impact on their lives whatsoever, and I cringe. Be frugal, I want to yell.
On the other hand, there are people who go way out of their way to save a dollar, even When spending that dollar would really make their life better, or create some lasting memory that would impact them long after the dollar was gone. Don't be cheap, be frugal, I want to yell.
Maybe a better phrase for frugal, at least the way I think of it, is financially-efficient. And just like most mistakes I see people make, this one stems from not actually thinking about decisions and just going with the flow.
Money should only be spent if you have it, first of all. Just because everyone else has a car doesn't mean that you are somehow entitled to one, too. If you don't have money for a car, don't buy one. Never finance anything, with the possible exception of a house. Even then, I think it's usually a bad idea.
As I've mentioned before, I'm pretty frugal. I like spending money on things like the island, travel, and good food, but I also like saving money. I spend very little money frivolously, and don't have an overwhelming appetite for luxury.
I don't make much money, either. I'm content to have enough income to fund my inexpensive lifestyle, to save a little bit most months, and to retain control of almost all of my time to invest in big future projects like Sett.
Relatively frequently, though, I'll have a small windfall. Sometimes I'll have a good run in poker where I make a few thousand dollars within a couple days. My new book, Superhuman by Habit has been doing really well, too. Thanks to my readers and friends, it's been in the top 1000 books on Amazon. For a while last year my bitcoins were worth a bunch of money.
In these sorts of situations, it can be tempting to spend more money. People bargain with themselves, allowing themselves to spend some or all of unexpected sums of money they come across.