by Laura Rowley
I stopped at my local bookstore last weekend to meet Columbia University psychologist Sheena Iyengar, whose book -- "The Art of Choosing" -- I reviewed in a recent column. A petite brunette with a lyrical voice, she signed the hardcover for me, and next to her signature, wrote: "Choose when to choose."
I thought about that statement later when I received a letter from my bank stamped "ACTION REQUIRED." It explained that under new federal rules, banks can no longer automatically cover overdrafts and charge (exorbitant) fees for the privilege. After July 1, consumers must opt in and agree to overdraft protection, otherwise the ATM or vendor may deny the transaction for insufficient funds.
"If you're like most consumers, you rely on your ATM or debit card to save the day," the letter stated. "However, what do you do if you do not have sufficient funds in your checking account?"
Apparently I'm not like most consumers (at least in the bank's view) because I don't rely on my ATM card to "save the day." I rely on a budgeting program that helps me balance the money that flows in and out, so my financial boat is pretty steady. Despite the screaming caps, no action was required.
The Necessary Work
But building wealth usually does demand action, and conscious, consistent discipline. It's the culmination of decisions made over and over every day -- to uphold a set of values, live within one's means, save and invest, and strike that delicate balance between carpe diem (seizing the day) and robbing from tomorrow. Some people approach their finances casually, carelessly and unconsciously with regard to every offer that might be thrilling at the moment -- but that ultimately can shatter the things one values most.
"The beauty of choice is it gives you the power to think of your future as changeable," says Iyengar. "It's the only tool you have that enables you to think about and act upon how you're going to go from who you are today to whom you want to be tomorrow. Framing your life in terms of choice is both empowering and burdensome."
The changeable future was on the mind of a young bank manager I met last week when I went to close an account and shift the money to one that offered higher interest. When he found out I write about personal finance, he asked for advice. He lives with his fiance; both were a few years out of college with student loan and credit card debt. He felt he had a handle on his money, and he wanted to set up a joint account for shared expenses. She resisted, and he suspected that her spending outstripped her income. When she returned from the mall, he said, she would try to hide the shopping bags.
After we talked about which debts to tackle first, I suggested he and his fiance sit down separately and make a list of the things they wanted most in life. What did they value, what were their fervent hopes and dreams for their lives, their biggest aspirations? Then come together and identify where the lists overlap, I said, and answer three questions: When do we want to achieve these goals? What will they cost in money, time and energy? How much do we need to save in 10 years, five years, next month, next week and today to reach them?
When we drill down deeply into values and priorities, we might be lucky enough to hit something that's true and authentic, that's a reflection of who we really are and how we want to show up in the world. Connecting to what is most meaningful and purposeful becomes a source of conviction in a world of ubiquitous temptation. It provides the energy and the inspiration to choose when to choose.
A few weeks ago a friend told me that her daughter and son-in-law were thinking about starting a family. The daughter told her mother that even if she wanted to quit work and stay home with her kids, she couldn't afford to, because they had created "a certain lifestyle." Having a parent stay home with children is indeed a luxury in a world of stagnating wages and rising costs. But for a high-earner to sacrifice the choice, before the fact, on the altar of a certain lifestyle, struck me as a form of economic Stockholm syndrome: Emotionally bound to a material status, the captive becomes one with the captor.
"Modern individuals are not merely 'free to choose,' but obliged to be free, to understand and enact their lives in terms of choice," writes Nikolas Rose in his book, "Powers of Freedom."
"They must interpret their past and dream their future as outcomes of choices made or choices still to make. Their choices are, in their turn, seen as realizations of the attributes of the choosing person -- expressions of personality -- and reflect back on the person who has made them."
It takes courage and imagination to be the architects of our lives, to choose when to choose and be accountable for the sum of our efforts. But there is no happiness that compares with earned success, as Arthur Brooks, president of the American Enterprise Institute, wrote in a recent essay:
"Earned success is the creation of value in our lives or the lives of others. It is what drives entrepreneurs to take risks, work hard and make sacrifices. It is what parents get from raising happy children who are good people. It is the reward we enjoy when our time, money and energy go to improving our world."
In other words, ACTION REQUIRED.