Updated on 04.28.09

Charting Personal Finance Progress, Internally and Externally

Trent Hamm

If you’re reading this, it’s likely that you’re in the midst of a personal finance journey of your own. You started at a place that you weren’t happy with for some reason (too much debt, unhappy with your living situation, unhappy with your career, etc.) and you’re heading towards a place that seems much more desirable (debt freedom, a home of your own, a new career, etc.). In other words, these journeys have a beginning and an end.

Here’s the question, though. How do you identify where exactly you are on this journey?

The obvious answer is pure dollars and cents. If you had $10,000 in debt and are marching toward debt freedom, your exact debt amount reveals how far along your journey you are. If you’re saving for a house down payment or for retirement or for education, you can easily just glance at your account balance to see how things are.


Pure dollars and cents work well for other goals, too. Let’s say, for example, that you’re striving for pure financial independence. One great way to keep track of this is to keep a careful eye on your crossover point.

But that just scratches the surface.

One of my biggest personal finance goals is security and health for my children. I invest in their well being in many ways. I buy healthy foods for them, focusing on health as the primary factor, not cost. I contribute to their educational savings. I buy educational supplies for them all the time (at their age, that means crayons and drawing paper and so on). I invest time in them every day, time I might otherwise spend on writing or research or other such things.

Pictures of my kids on my desk

How do I judge my success there? I look at them. Are they healthy? Are they curious? Are they happy? Do they interact well with children their age – and to everyone else, too? Do they have manners and behave well in public? Are they growing physically, mentally, and socially? If I can wholeheartedly say “yes,” my investment is paying off – if I can’t, then something needs more attention.

When I went through my lowest days, my real dream was simply “financial security.” By that, I meant that I wanted to not worry about individual bills that came in. My definition of success in that respect is simply being able to sleep well at night without money worries – if I find myself stressing out over money, then I know there’s a problem.

To put it simply, there is no one simple way to keep tabs on your money goals. A bank account balance might tell one aspect of the story, but success isn’t always measured by your absolute net worth – or the changes in your savings balances.

Instead, I’d argue that personal finance success is often best measured by you. I’m not talking about getting rich and accumulating wealth. I’m talking about things like getting out of debt, having a big emergency fund, having stable retirement savings, being able to take care of those important to you, having a career that makes you feel fulfilled, and spending less than you earn so that you can progress towards the other goals you hold dear to your heart (like a home that truly fits your desires, stewardship of the community, volunteer projects, and so on).

We all have different goals, but they all have one thing in common: achieving them – and the process of achieving them – lifts our moods and who we are in many ways, subtle and otherwise. In the end, personal finance goals are much the same – success is worth more than mere money. As you work hard and succeed, you feel it inside, not just in your bank account.

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  1. Baker @ ManVsDebt says:

    I really enjoy tracking our journey to financial independence, like you’ve outlined in your previous post.

    I do understand what you are saying here, though. For example, the last $100 we take to pay the last of our debts is going to be a huge achievement. It’s going to mean much more than any other $100 bucks along the way. It’s good to take time to track these milestones, as well.

  2. I think financial goals are only incident to greater goals like for instance you mention the health and security of your children, yet finance has taken such a dominant role in our society that having or earning a lot of money is a direct measure of how good you are as a person. In that sense financial tools are used as a feedback mechanism so you can correct your actions and try to do better. However, monetary achievement rarely correlates with, say, how brave a person is, how humble he is, or how good a dancer he is, say. These all have their own feedback tools.

  3. This is interesting Trent… I think there are a couple meaty areas here for further exploration.

    I think the level of our needs change or advance as we address each need. Money to pay my current bills VS. money saved to pay several months worth of bills VS. planning for retirement. Putting food on the table VS. putting high quality and healthy food on the table. These are examples of this evolution and if the questions are becoming more complex then we’re likely headed in the right direction.

    On another plane there is the defining of goals and of success against those objectives. This is a great line of discussion. I recently wrapped up a 10 part series on goal setting. I think we need to set goals across several facets of our lives and then work to achieve goals within each area. This should provide the balance in our lives that we require.

    Great stuff Trent and I appreciate you sharing!

  4. Hey, great looking kids too!

  5. Drawing says:

    Really enjoyed your thoughts on personal finance! I really liked how you said, “there is no one simple way to keep tabs on your money goals.” This is so true. We have to be actively participating in our financial goals to know where we are.

  6. kristine says:

    The ad you have on your page :”Google pays me 127 an hour”… links to a scam- you have to buy their “kit”. It is hardsell nonsense. (Yes, I had to click and see what it was about.)

    You lose credibility by having this ad on your page. I’d rethink that decision. People trust you.

  7. MoneyEnergy says:

    That’s awesome…. I love your children philosophy, buying them crayons and stuff… very important. I agree that overall financial success is just a stepping stone to real, whole success… I guess the numbers make it easier to focus on, and of course it’s so prominent in our daily lives…. your graph there makes me think I should try that very visual process like they do in fundraisers… maybe it would motivate me further or pull in some of that law of attraction!

  8. Melody says:

    Great post, and so true. I just have to share I was cracking up when I read about you buying healthy foods for your kids (they eat those breakfast burritos I’m sure, like mine does!) and then I download the pictures and your little girl is eating her birthday cake! LOL Not being a scrooge, I just thought it was funny. At least we know you’re not a total granola-nut who had some vegetable cake made for your kid’s birthday! LOL

  9. Nancy says:


    Your kids are cute and those are cute pictures of both of them. With that being said, you might want to think about not putting their pictures in the articles in the future. Unfortunately, we live in a society where children are not always safe from predators. I live in California and the Sandra Cantu case just happened out here. In that case it appears that it was someone she knew and should have been able to trust but that is not always the case. Just some food for thought.

  10. cheap chick says:

    I used to hate budgets too. But I also hated spending money I didn’t have. I dumped my credit cards except for one for EMERGENCIES. Cash or debit card only now.

    I also looked carefully at “regular” expenses and decided to dump my AT&T phone for a prepaid phone. Got a Tracfone for 30 bucks but it was kinda-sorta free since it came with 30 bucks worth of air time.

    Now I budget my phone use by buying the amount of time I want, up front. I also got a double minutes card which makes it an even better value.

    There are some expenses that can be “managed” and those are the ones to budget.

  11. George says:

    I have to laugh at the chart of the future. Yes, we’d all like our own to show nice smooth progress, but the reality is that investment returns vary and our own expenses can vary.

    For instance, a marriage or divorce or childbirth is likely to put a temporary dent in the upward trend. There are also things like the investment capital is suddenly cut by 30-50% due to market conditions (e.g. November 2008 anyone?).

    On the positive side, sometimes marriage or downsizing or a promotion will accelerate the curve.

    In my own situation, I’ve been charting the investments I control since 1993. First house I bought was in 1997 and it took a good three years before the curve began accelerating upward again. Marriage in 2001 was relatively benign to the finances, but we realized a bigger house was needed in 2004 and again it took 3 years before the curve began accelerating upward again.

    In hindsight, the move to a bigger house wasn’t needed and we would have had the old house paid off already, but the lifestyle change has been welcome. In terms of goals, I now realize I’m trapped in my job for at least another 7 years in order to maximise retirement benefits… if we’d been content to stay in the first home, I would not need to maximise those retirement benefits.

  12. George says:

    Speak of the devil, er, details, here are some real world examples from the Retire Early home page:

  13. shenz says:

    Very interesting post – especially from someone like me who just recently decided to take control of personal finances.

    I’ve visited this website (blog) a couple of times in the past – and learned a lot from you, THANK YOU FOR THAT.

    I must say the comments are very interesting too – and they all take VERY different angles throughout the article! (Human behavior and interaction is VERY mind boggling, and amazing!)

    Anyway, one of the things that is frequently mentioned in mature personal finance blogs is that taking hold and controlling ones personal finances is a lengthy journey. You mentioned that the journey ends at some point – but does it really?

    Once the goal is met, doesn’t the journey somehow evolve to something else?

    P.S. Your kids are UBER cute! Please heed what Ms. Nancy said.

    Thanks again!

  14. George says:

    Ack! I-bonds are now earning 0% since the 6-month inflation rate is -2.8%, so you’d need a base rate of 5.6% to overcome that. Kinda tough after having earned 5-6% in the prior 6 months. Now we’ll just have to wait until the rates reset again on November 1.

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