ZENVESTING: Brother Mike's Three Considerations

Aristotle believed that with reasoned knowledge people would change their actions. The Buddha taught that so-called “bad” action was a product of being ill-informed or having unhealthy habits of the mind. I believe both teachers were talking about actions with long-term pain for short-term gain. My personal philosophy for gauging right actions comes from what I call “Mike’s Three Considerations” — gleaned from my brother Mike during an afternoon of snorkeling.

A few years ago Mike and I took our then 10-year-old sons to snorkel in the warm waters off Spanish Key in the Bahamas. Just as Mike stopped the engines at our first snorkel stop, one of the boys jumped into the water, fully geared up. Mike yelled to me to “set the anchor over there,” kicked off his flip-flops, dove in, and grabbed the boy’s leg so fiercely that he flipped. “You must think!” Mike hollered in a voice that probably carried all the way to Nassau. “Did you think of the three things that you should consider before you do something?” Then, red faced, Mike recited his Three Considerations. “One: Was the anchor set? Two: Where was your dive-buddy? Three: Do you realize that you scared me to death?”

Finally, Mike gave the boy a hug and called the dive-buddy cousin into the water, and we all had a fine snorkel.

So we will start our budgeting column with the wisdom of Aristotle, the Buddha, and my brother Mike. Before the days of six-month interest-free credit cards, $100-a-month purchase options, and advertising that tells us to “be spontaneous, splurge, just say yes because you need or deserve it,” we were constrained from excessive spending by pocket cash.

My definition of excess spending is any spending that is not planned for. Don’t freak out! You can plan $200 a month for lattes or $500 a month for “just say yes,” as long as it’s in your budget and within your means. Most of us have good knowledge of what our minimum income will be. We also know what our fixed, recurring bills are for rent, chocolate, mortgage, chocolate, utilities, chocolate, car expenses, 10 percent for savings, 10 percent for helping others/charity, 10 percent for our “what if” account, and chocolate. So we have the ability to figure out what is left for “just say yes.” The problem lies in the speed of our spending decisions.

Let’s take a sweet breath and consider my brother Mike’s Three Considerations. One: Is the anchor set? Two: Where is your dive-buddy? Three: Will the long-term consequences of this scare you?

Translated into financial terms, these questions might be . . . One: Does it fit into my budget and if not, am I willing to work more hours to pay for it, dip into savings, or delay or quit dreaming about that trip to Dharmasala for today’s indulgence? Two: Will this purchase make me, the world, or a friend happier, more secure or safer? Is there somebody, a dive-buddy, whose counsel might be worth listening to before I make this purchase? Three: Will I regret this? Are the long-term consequences worth the short-term pleasure?

For some, it’s automatic to consider consequences; others get so caught up in the act of consequence consideration that it gets in the way of ease, enjoyment, and spontaneity. It’s possible to relax and enjoy this budgeting/spending game if we can understand that it’s not about sacrifice; it’s merely the ability to relate a current moment’s “just say yes” action to a future moment’s consequence. When we accept this relationship, it’s easy.

No one is born bad at budgeting; we may have learned bad habits. We are in control of our thoughts and actions. Ignorance of the law of moderation, balance, or cause and effect as it relates to spending is no excuse for overspending. Budgeting can be learned. Of course, it takes desire and effort — more effort for some, less desire for others, but intentionality for everyone. I hope you will consider my budgeting advice . . . which brings to mind another wisdom teaching: “Blessed is the person who gives advice — but a thousandfold more blessed is he who takes the advice and uses it.”

Paul H. Sutherland is president of Financial & Investment Management Group and manager of the Utopia Funds.