Education, mentoring, and coaching on making Purpose the focus of your personal finances.


Without Purpose, money has no meaning. 

Money has only two basic purposes: (1) to spend and enjoy and (2) to give away. At the end of your life, every dollar you ever made will fall into one of those two categories, either you will have spent it, or you will have given it away. If the Egyptian Pharaohs taught us anything, it's that you truly can't take it with you. That's not to say you should spend all your money today. Those currently investing for retirement are building money intended to be spent and enjoyed after age 65. 

Personal Finance is the "what" and "how," Purpose is the "why." 

Every dollar you have and every account those dollars are in should be tied to a purpose, either to spend on something specific or to give away. If you are saving up to pay cash for your next car, then the purpose of that money is to spend it on enjoying a new car. A car you will enjoy even more because you don't have a loan costing you additional interest charges. 

Life Isn't "Whoever has the most money wins"

One of the failings of some financial experts is they place money as the center of their teachings. They admonish people for spending money and focus their strategies on how to accumulate money. Planning for the future and investing for things like retirement are of vital importance. Accumulating money for your future, however, should not come at the expense of your happiness today.

No matter how much money you accumulate, money by itself cannot bring you happiness. Money doesn't buy happiness. Although it is a little cliche, there is a lot of truth to it. And the pursuit of money, simply for the purpose of having more of it, is an endless rat-race. No matter how much your earn or have, you can never satisfy the 'itch' of wanting more.

The focus in life should be on being happy. Life is "whoever has the most happiness, wins." Spending time with friends and family, going to concerts and movies, taking vacations with your family, playing team sports or video games; these are the things that bring happiness into one's life.

money does buy happiness.

So after all that, the next heading is that money does buy happiness? The truth is, you need money in order to do any of the things that make you happy. Money allows you to spend a day at the beach or skiing. Money allows you to go out to a concert or grab a drink with your friends. Money is what you need to take a vacation with your spouse. And money buys the equipment to allow your kids to play a sport.

Whatever brings you happiness, there is a financial cost that accompanies that happiness. Even just cuddling up on the couch and watching a Netflix takes money; you had to buy the couch, the TV, and the Netflix subscription.

In all of these instances, however, money only buys you happiness if you are spending it on a specific purpose. So the more precise answer is: 

Money buys you what brings you happiness.

The goal in life, then, is to figure out what makes you happy and then make sure that money isn't the thing that keeps you from that happiness. Your goals (the experiences and things that make you happy) become your purpose for money. And the amount of money you need is equal to the amount it takes to accomplish those goals. If you don't have enough money to achieve your goals, you won't be happy. Not because you don't have enough money, but because you can't do the things that make you happy.

Of course, if you have more money than you need, your happiness will suffer as well. Let's say in order to do all the things that make you happy, you need $56,000 per year. Earning $66,000 per year will not increase you happiness, because there is nothing left to spend the extra $10,000 on. You definitely could find 'things' to spend the extra money on, but you've already done everything that makes you happy with the first the first $56,000.

To earn that extra $10,000, however, you may have had to take on a second job or work overtime or cut back in an area you didn't want to. The extra money didn't bring you any real happiness, but it did take time away from your family, your hobbies, or your friends. This site will help you identify your goals and how to manage your money toward those purposes.

How important is Purpose?

Behavioral economics and behavioral finance is a growing field of study exploring how our psychology and emotions impact financial decisions. Research in this area has demonstrated that motivations, perception, emotions, and other psychological influences have a greater impact on financial success than mathematical analysis of decisions. Having Purpose as the focus of your financial decisions helps to mitigate and direct these psychological influences toward positive financial decisions.

One study cited in Dr. Daniel Crosby's book "The Laws of Wealth" observed how Purpose changed the savings habits of low-income families. Due to the difficulties of living paycheck to paycheck and having little discretionary income, this segment of the population has historically had very low savings rates.  

The researchers placed pictures of participants' children on their online banking website.  Every time the parents logged into their online banking platform, they saw a subtle reminder of why they should save. Nothing else was changed, other than seeing their kids on the site. With a simple reminder of their purpose, families increased their savings rate 2.5 times.

Another study titled "Earmarking and Partitioning: Increasing Saving by Low-Income Households" found the same effect for families who using only cash. They kept their savings in cash with pictures of their children attached to the money. Being reminded of their purpose for savings was enough to keep them from dipping into their savings account, even when it was as easy as pulling money out of a shoe box. 

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