Essays

Personal Finance and the Fundamental Choice

A few days ago, I reviewed in detail the excellent book The Path of Least Resistance by Robert Fritz. In that book, Fritz posits that most of the time, our lives take the path of least resistance around and through the obstacles of life, both those dealt to us by others and those within our own mind.

An extension of that is the idea of a fundamental choice, as opposed to a primary or a secondary choice. A fundamental choice is one that actually affects the definition of who you are as a person – the others are merely suggestions on how to act. For example, a fundamental choice would be to define yourself as a frugal person, whereas a primary choice might be to choose to try to make frugal choices, and a secondary choice would be an individual frugal decision.

For a lot of people, this seems like mere wordplay, but there’s something deeper at work here. A person who makes the fundamental choice to be a frugal person is a person whose default choice is the frugal one. A primary choice to be frugal doesn’t change that – you’re merely deciding against your default choice whenever you can think about it.

I’ve long believed that success in personal finance is like a switch in the head – at some point, you flip that switch and feel much better about things. The “switch” has always made intuitive sense to me, and now I know why – it’s the same thing as the “fundamental choice” that Fritz talks about in his book.

I am a frugal person. I used to not be a frugal person – on the occasions when I would do something thrifty, it would be because of a primary or secondary choice. My default was to spend, spend, spend – and then spend some more.

At some point – perhaps right at the moment of my financial meltdown – I made the fundamental choice to be frugal. After that, the world simply looked different. My default choice in most matters is to not spend money – only in some specific cases (those where I allow primary and secondary choices to override things) do I allow myself to spend.

What caused that switch? Why did I make that fundamental choice, and how did I make it?

The biggest element was inspiration. I knew that, for the sake of my son’s future, I needed to make a deep change in how I looked at money. I think it was somehow made easier by the fact that I had recently made the fundamental choice to be a parent.

The other key part was support. My family, particularly my wife and parents, and my best friend are all financially stable people and are responsible spenders. I already had the support structure in place to make that change – I just had to carry through with it. I also found support in reading – when I made that fundamental choice, I buried myself in learning exactly how to do it, so that my specific secondary choices would be sensible ones.

Looking at my life now, I can scarcely believe that I ever spent my money that foolishly. It almost seems like a different person did all of that spending – and, in a way, that’s a true statement. I made a fundamental choice and, in some ways, it changed the fundamentals of who I am. It changed countless subsequent choices, not only concerning my spending, but about how I spent my time and who I spent it with. It changed how I saw myself, and how I saw the people around me – the peer pressure to spend began to fall away pretty quickly, for instance.

It’s amazing that sometimes you can find a powerful insight from the most unexpected of places. I found a great description of my own financial turnaround in a book about creativity.