Personal Finance 

My Single Best Piece of Personal Finance Advice

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Achieve Balance.

Very zen huh? By balance, I don’t mean a fat bank account balance. I mean balance in everything you do, personal finance and beyond. I bet you expected me to tell you to save 20% and put it in a target retirement or an index fund, or cut out your daily candy bar or coffee, or some other common repeated piece of personal finance advice; but honestly those tips are merely outward actions of an underlying philosophy and it would behoove everyone to understand the philosophy, not just remember the actions. Remembering and understanding the philosophy will yield greater rewards than trying to remember all the actions because the philosophy will guide you in every situation, whether you’ve dealt with it before or not.

My personal finance philosophy is to achieve balance. By this I mean that you shouldn’t totally sacrifice any one aspect of your life in order to achieve something else. A great example is in retirement savings, if you can afford to max out your 401k for the year without severely impacting your life, by all means do it. If you have to eat ramen and never enjoy life in order to max out your 401k, don’t do it because it’s not worth it. Don’t entirely leverage the future for the present and don’t entirely leverage the present for the future, put equal emphasis on both and you’ll do just fine.

Another example has to do with investing. It’s very exciting to put all of your investing dollars into the hottest new technology or biotech startup, but that’s a mistake. You want to get a nice diversified mix of stocks from different industries, different market caps, etc. so that you aren’t overextended in any one particular area. Balance is again key here.

Lastly, balance the focus of your time as well, don’t spend all of your time thinking about money, thinking about your accounts, your retirement, your investments, etc. Balance your own time between your hobbies, your relationships, your work, and other aspects of your life.

{ 4 comments, please add your thoughts now! }

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4 Responses to “My Single Best Piece of Personal Finance Advice”

  1. Amanda says:

    Your last paragraph is key. It’s very easy to get caught up – especially when you write / read a lot of financial blogs and other literature – and find yourself sacrificing way to much of today for tomorrow.

  2. Jason says:

    Finally someone has said it! It’s about time some people realize that you can live your life while being financially smart. I’m not about to forego a trip to Paris just because it means spending money. After all, you can’t take it with you and you might just die tomorrow.

  3. Plato said, “Moderation, which consists in indifference about little things, and in a prudent and well-proportioned zeal about things of importance, can proceed from nothing but true knowledge, which has its foundation in self-acquaintance.”

    Know yourself and define your own success and you will achieve the meaningful existence that we all pursue.


  4. GeckoGirl says:

    This is something I often grapple with. I max out my 401k and my IRA and have an efund but I always push myself to try to save more. I don’t live a spartan lifestyle and some might even find it bordering on lavish, so how do I find that fine line that is balance – maximize my savings/investments while still enjoying life (meaning not constantly thinking about my finances)?

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