This post is part of my review of Smart Couples Finish Rich by David Bach. The chapter 1 review can be found here.
This chapter is about your values and what you want to do with your life. I found it quite interesting because a lot of personal finance books focus on trying to retire with as much money as possible or they focus on trying to retire with as little as possible. The reality is that you have to decide for yourself what is important in terms of your financial security and figure out how you want your life to go. It’s not good enough just to decide that you need $X dollars in retirement, you have to tie together your current lifestyle while working with your retirement goals so that it all goes together. Usually this means cutting back on your lifestyle while working so that you can save for retirement.
One of his examples of analyzing your values during your working years was health & fitness. Bach says that if it is one of your top values then you should devote the time and money to work on it. If $50/month for a gym membership doesn’t fit into your budget then you should cut something else out that you don’t value as much and make the gym membership happen. Obviously if your values include expensive hobbies then you have to make some decisions. One of the important points of this chapter is about taking control of your life and schedule. Sometimes people get so busy that they don’t make time to do things that they like to do, like get together with old friends, hiking, bicycling etc. Some of these activities don’t even cost any money but they take some time and planning in order to happen.
Determining values is an important exercise for a couple because lots of times people don’t know what their partners values are and this can complicate retirement planning as well as planning your finances during your working years.