Big or Small Picture?

This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.

On the weekend my dad came over and wanted to go shopping for golf clubs.  He plays 2 or 3 times per week and hasn’t bought a new set of clubs in 40 years (and at almost 60 can still beat me).  We went to a huge golf store and he tried out 10 different sets of clubs, finally buying a set for around $500.  Prior to deciding on the purchase, we went for a walk around the store.  The sales guy wasn’t on commission and didn’t really care if we purchased or not, but my dad’s main thought regarding this decision was whether or not these $500 clubs would actually help his game enough to warrant the purchase.

In the end, he decided to buy a very nice set of clubs.  We’ll have to see if it will reduce his golf scores, but he was happy with his purchase.

What I got thinking about was the discussion that I had, prior to purchasing and how it pertains to personal finance (because that’s just how my head works).  I’m not really sure how I got there, but I kind of look at a lot of personal finance “tips” as the new set of golf clubs.  I’m not a super frugal person – I don’t clean out Ziploc bags, clip coupons or really anything that requires a significant amount of effort.  My basic plan boils down to a simple budget that allocates money to things such as our house, cars, personal savings (for fun things), food, and bills.  Once everything has been “paid”, the rest of the money is for spending.

Instead of a small change (new golf clubs) I would be more likely to attack the problem at the source and get lessons – changing my swing so that that clubs really don’t matter.  In my personal finance plan, these sort of big wins come from minimizing waste in most of my life so that I have the money available to do everything I want to do, whether it’s maintaining my current path to early retirement, going on a trip to someplace warm, or spending too much money on beer and food at a bar (like I did last night).

For me, it’s easier and a lot less restrictive to know that I can do what I want to do because I have a strong financial foundation, instead of worrying about every penny I spend.  Over the long-term, this would drive both me and my wife crazy and would probably cause some stress as we would have to monitor our activities (micro-managing) rather than enjoying what we’re doing.  I have a feeling that we would end up in quite a few more battles over money, which really isn’t worth it.

I’m wondering how everyone else looks after their finances – do you micromanage your spending, or are you more of a big-picture budgeter?


3 thoughts on “Big or Small Picture?”

  1. I am a lot like you, Dave. I don’t sweat the small stuff, particularly if it takes any kind of meaningful effort. I don’t clip coupons unless they literally fall into my lap. But at the supermarket I make sure to wait until my boneless chicken goes on sale for $3 a pound instead of the usual $5 per pound, then I load up on it, buying 10 pounds at once and freezing what I don’t cook right away. This saves me $20 buying a single item in a single trip to the store.

    And I pay far more attention to bigger-ticket items even though those types of purchases are not very common.

  2. “I have a feeling that we would end up in quite a few more battles over money, which really isn’t worth it.”

    How much of this would be new compared to things that would be good talking honestly about anyways? 😉

    “Once everything has been “paid”, the rest of the money is for spending”

    Even without consideration of each dollar’s decreasing marginal utility?

  3. Being a project manager there is a time and a place for both. It all depends on where you are in the process. Are you in the planning stages where you are talking big picture and goals and objectives. If so big thinking and a holistic approach is needed. If you are implementing these big picture items things start to get smaller mean how will you put a plan in place to achieve these big picture items. This is where you start to break it down. Once you have it in smaller workable picture, maybe a year or monthly basis then you can refine it to the small things. Yes I know this is a work breakdown structure, but really if you want to realize a goal you eventually have to have a plan in place to achieve it. Big picture financial independence (kinda hard to do in just 1 year). Workable picture 1 year tracking of income and spending habits. Feeds into the large picture. Refinement of spending habits in categories that are relevant to your budgeting medium picture. Small picture how much you are spending on lunch every day. You cannot have 1 without the other. You may not realize it at the time, but you maybe going through that thought process when you pick up that drink at the convenience store. Whether or not you justify it depends a lot on your mood and whether you are being mindful of your decision making or not.
    By the way I would consider myself a micro manager of my spending habits, but a big picture guy when it comes to my investments. Different frames of mind for different timelines.

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