The Decision Points in Life

When I think back throughout my life, I can see a few big turning points that really stand out.

When I was a senior in high school, I had three scholarship and financial aid packages for college that stood out head and shoulders above the rest. They were all offers from good four year schools, each one with a different set of strengths, and each in a different region of the country — one in the Midwest, one in the South, and one in the Northwest. I actually filled out the paperwork to accept the offer and agree to attend each of the schools. I sealed those envelopes and thought about them for a long while — several days, in fact — and finally dropped one in the mail. I still don’t know precisely what caused me to choose that particular one, but I know that moment indicated three very different directions in my life.

At one point in our relationship — we had been dating for a few years, but hadn’t yet married — Sarah and I hit a really rocky patch. We were both struggling to finish college and figure out what was next in our lives, with a lot of different professional options available for both of us. It came to a head one night and we had a very long conversation that concluded with uncertainty as to whether we were going to remain a couple. I fell asleep that night fairly certain that we were done with our relationship, and I woke up that next morning with a decision in front of me. Was this a relationship that I wanted to have in my life for a very long time, or was this something I wanted to walk away from? I chose to stick with Sarah, and I don’t regret it a bit, but the other choice would have taken me in a radically different direction.

I can point out quite a few stories like this. I had a couple of key career junctures — one where I decided between two very different job offers, and another where I decided to change careers entirely. I had a choice where I decided to end a very long term friendship due to a deep lack of trust that had turned into genuine discomfort. I had a couple of business opportunities, one that I said yes to and another that I said no to, that led in very different life directions.

The thing is, at each of those junctures in life, I was presented with a choice. Those options led in very different directions for at least one area of my life, and often that choice meant big changes in several other areas.

I’m sure that if you think through the story of your own life, you can come up with similar decision points. There were probably moments where, if you had made a different choice in that one moment, your life would have gone on a different trajectory.

Finances often create a limitation on those decision points.

Here’s something interesting, though: when I look back on the decision points in my life, many of them were shaped by the financial limitations I faced in that moment.

When I think about my decision about where to go to college, that decision was strongly directed by finances. My parents had little money and weren’t going to help me with much more than a few textbooks during my college years. Sure, they sent me $20 here and there and they did buy me some of my textbooks, but tuition, food and a roof over my head were all on me. I knew that if I racked up a lot of debt in college I would be paying it off for a long time, but some debt was unavoidable. That hard truth did a lot to shape which letter I put in the mailbox that day.

When I think about all of my career decisions, they were almost all shaped by finances. When I chose my initial job after college, I chose the one with the better starting salary, even though the other one had a powerful factor of being better for my career over the long term. When I decided to switch to writing full time, I hemmed and hawed on the decision far longer than I should have, and it was the dollars and cents in our family’s accounts that made that decision far tougher than it needed to be.

Even my decision to stay with Sarah had financial considerations. Most of our argument centered around finances and career decisions, with the weight of student loans, bills and rent all around it.

In each of those situations (and many others), the amount of money I had in my accounts and the pure dollars and cents associated with each option heavily shaped what my decision was, overpowering many other considerations in my life. I didn’t always choose what was best for me; rather, I often chose what was best for my wallet.

In truth, however, those decisions were kind of forced on me. The simple fact that I grew up with little money shaped the financial reality of my college choice. Facing down piles of student loan debts powerfully shaped my initial career choice. Fears about facing the financial realities of life alone nudged me toward reconciling with Sarah, though that wasn’t the only reason, and it turned out to be an absolutely wonderful choice.

Over the last few months, this realization has led to a lot of others about finances and key life decisions.

One of the most powerful reasons to get your financial life in order is to remove financial constraints from those key life decisions.

When Sarah and I first decided to start turning our finances around, it was fueled by several things. We were dealing with the responsibility of parenting with a baby in our home. We were realizing that some of our dreams for the future looked perilously out of reach.

What we saw for our future — if we didn’t make some real changes — was a life in which our major decisions were made for us, restricted by our own bad financial decisions and a lack of financial flexibility.

I didn’t want to live in a tiny apartment for my entire life. I wanted more home choices than a tiny fixer-upper. I didn’t want or need to buy a McMansion, but I wanted a decent home for my family. That wasn’t going to happen.

I wanted to be able to travel and see the country with my wife and my kids. That wasn’t going to happen.

I wanted to have a ton of career flexibility, with the ability to move to jobs with interesting projects. That wasn’t going to happen – I needed that steady paycheck.

In short, I saw a life before me that had a bunch of decision points in it that were already made for me in a way I didn’t like if I didn’t make some changes.

I wanted more choices to be realistically on the table for every major life decision going forward, and, for me, the pain of remembering earlier choices where many options were closed off was an extremely powerful motivator.

I’ve used those choices as a motivator ever since.

I remember how it felt when I had to eliminate a bunch of college options and go with only a few choices that had stellar financial packages for me. It hurt to say no to a lot of the other options. That motivates me.

I remember how it felt when many of my earlier career choices were practically made for me because of the dollar amount on the contract rather than the work itself. That motivates me.

I remember how it felt when we were trying to make a tiny apartment work with a baby in hand and another on the way. That motivates me.

In fact, sometimes it’s those exact memories — and not wanting to see them repeat — that motivates me. In part, my own experiences with deciding where to go to college that actually led Sarah and I to save aggressively for our own children’s education. I actually don’t want to pay for their full college education. I want them to feel at least some of the financial weight from the cost so that they take it seriously. Having said that, I also want to be sure that they’re choosing the best option for them amongst their choices after graduation with as little financial impact as possible. I don’t want them to be in that situation I was in, where the college choice was steered mostly by financial considerations.

Having said that, if you’re in a situation where you’re feeling financially constrained, make decisions now such that future choices won’t come with that constraint.

It might seem like I’m criticizing myself for making money-oriented decisions at those big turning points earlier in my life. I’m not — not at all.

The truth is that if you’re faced with a major decision in life where your options are obviously being steered by financial realities, lean into it. Make that major choice with financial realities in mind. Take the option that should put more money in your bank account and do what it takes to maximize that money in your account.

If you can’t really afford to go to the expensive college of your dreams, that’s okay. Go to the cost-efficient school for now, lean into the opportunities there and sock money away for the next big turning point.

If the pile of student loans is strongly pushing you to take one job over another one, that’s OK. Go for that better paying job and lean into it. Make the most value out of that situation that you can so that the next time you have a big turning point decision, you’re not as constrained by the options.

I didn’t get to go to the college of my dreams. (It was MIT, by the way; I just couldn’t make the numbers work, so it wasn’t one of those final options for me.) However, I ended up making a choice that was financially wise and left me with a manageable amount of student loans after graduating.

I ended up choosing the better paying job rather than the one that was the best option for a career in data mining. However, it turned out that my path didn’t stay in that field anyway.

I don’t regret any of those choices. While they might not have been the choices I would have made without financial constraint, the financial benefits of those choices ended up helping me down the line. They led to more income and smaller bills, and those aspects (among others) made other choices easier.

Everyday decisions play directly into this. Make decisions with finances in mind so you can make the big important ones with less financial constraint.

Earlier in the article, I mentioned that Sarah and I are saving for our own children’s education, mostly so that they don’t feel inclined to have that decision almost wholly shaped by finances, as mine was. That decision itself — or at least the ability for us to make it — is the domino effect of a lot of smaller decisions on top of the bigger decisions noted above.

Some of those smaller decisions were career-oriented. I’ve always had side gigs to help us bring in more income. Sarah threw herself into earning a master’s degree for her career when an opportunity came up to earn it at an inexpensive rate during weekends and summers. I chose to go down a more flexible career path, in part so that we could cut child care costs as well as household, automotive and food costs.

Others were spending oriented. We buy everything we can in store brand form. We don’t have cable. We do a lot of our own home repairs, especially anything small. We leaned in when it comes to lower cost hobbies and leaned out on more expensive one. I could go on and on like this (and I often do). The key thing is that none of those choices were ones that left us unhappy with the net result. If we felt that spending cuts were making us unhappy, we undid them. Also, everyone’s choices are going to be different depending on the specific situations of their own lives.

It is that flood of small decisions that made it possible for us to make bigger decisions. Living frugally made it possible for me to make the leap into a more flexible career. That career flexibility, along with frugal living, helped Sarah have the opportunity to earn her master’s degree.

Those small decisions and somewhat bigger decisions worked together to make it possible to make even bigger decisions, and that’s where we come back to my own children.

Because of those choices we made, I imagine my oldest son in a few years holding a few acceptance letters in his hand, and his decision between them will be much less about the financial constraints, but rather about which school will prepare him best for the life he dreams about. That’s a much different choice than what I had, and it’s one of the big culminations of this financial journey that Sarah and I are on.

That’s not the only big choice, though. A few years after that, Sarah and I will both be able to step away from full-time work. We’ll be able to spend multiple decades of our life together in good health, without the constraint of having to trade our time and energy for money. That’s a much different choice than my parents had, and it’s a different choice than I would have believed I would have in my twenties.

The smaller choices you make along the way set the stage for those bigger choices. If you make choices along the way that eat up your resources while giving you little comparative value in return, you close the door on some of the options when the next big decision point rolls around. On the other hand, if you make choices along the way that give you the best personal value for the least resources, you actually open the door to more and better choices for yourself at those big moments.

When you’re finding it hard to make the best financial choice in your life, step back and think about the decision points in your life.

How many of the big decision points in your life were steered by financial restrictions? How many times did you have to say no to something your heart told you was right just because of the financial limitations?

Rather than lamenting those decisions, remind yourself that you had to make the hard choice, and then use that decision as inspiration for the future.

You didn’t make those hard choices for nothing. Rather, you made those hard choices so that you could have better choices in the future.

If you’re stuck, make the hard choice, and then get the most value you can out of that choice so that the next decision point in your life isn’t constrained like that.

Along the way, make smaller choices such that you get the most “bang for your buck” in terms of life value, again so that the next major decision point in your life isn’t constrained.

Use every single tough decision you’ve had to make along the way as inspiration to make a better choice now. Think about every single one of those big decision points, where your choices were limited by your finances, and about how you would have given anything to be able to have more options or make different choices.

Use that as fuel for your financial change. Use that as motivation to make the better choice when it’s hard.

Good luck.

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.