14 Sep 2023 The Liturgy of Financial Planning

One of my favorite books is The Liturgy of the Ordinary by Tish Harrison Warren. In her book, Warren discusses how many of the most mundane tasks and routines we do daily can carry a more profound meaning. I often think of this idea of liturgy as it relates to financial planning. While the word ‘liturgy’ itself is most often used in a religious context (and this is what Warren is writing about), I think the idea can be applied to personal finances as well – that many of the most impactful financial decisions you can make are also the ones that seem so ordinary and boring. Warren mentions a sign she would read that hung on the wall that said, “Everyone wants a revolution. No one wants to do the dishes.” In a financial context, maybe you would say “Everyone wants to live the rich life. No one wants to save for it.” The daily mundane decisions are the ones that ultimately shape you.

There are two simple, ordinary ideas that come to mind when thinking about this: paying yourself first and living below your means. Neither of these will get you rich overnight, but they will day by day help you build a strong financial foundation.

Paying yourself first through automatic savings is not a novel concept, but it is one that sets the tone for a lot of your financial decisions. By paying yourself first, you are establishing a new baseline of income to live on, almost as if the amount saved is not there anymore since it never hits your bank account. This change will cause you to make adjustments in your day-to-day spending. If you need to make changes, spend time focusing on your goals and what is most important to you. Oftentimes, we have goals in mind, but do not align our spending or saving to reflect that.

Practical Application: A good rule of thumb here is to save at least 15-20% of your gross income, which can be from an employer retirement account, setting up automatic transfers at your bank, or letting Beacon assist you. If you have your open enrollment soon, use this as a time to reflect on your automatic investments and how you could change that amount. This is also a good opportunity to discover how much you have saved for the year relative to your income.

Living below your means, especially when paired with paying yourself first, has profound impacts on your financial life. It is a way of saying that you will be content with your situation and are not trying to seek a life you cannot afford. With so many credit cards and “Buy Now, Pay Later” options, it can often be hard to even know if you are living beyond your means. It is easy to compare ourselves to others by what we can see, but you will never really know if what you see is the truth or not (hint: a lot of people are living beyond their means).

Practical Application: A simple step is to always pay balances in full to better know what your cash flow is month to month. I do enjoy credit card rewards and sign-up bonuses as much as the next person (there just might be a brief on this one day!), but those incentives are only worthwhile if you are not accumulating more interest payments. Be honest with yourself and know if a purchase is within your means at the time you make it.

The journey through life is a long one. The days may go by slowly, but if you don’t pay attention, the months and years can go quickly – this is why establishing the idea of liturgy for financial planning can be so impactful. The small, every day, boring decisions grow together over time to form our financial lives. By paying yourself first and living below your means, you may not feel the impact tomorrow, but you will notice the profound difference it makes as time goes. These daily rhythms will shape you.

I am excited to be able to write the brief to you today for the first time. If we have not had the chance to meet yet, I am Daniel Logan. I am a Financial Planner that had the exciting opportunity to join the Beacon team in the Spring. My wife, Megan, and I moved from Alabama to Raleigh a few years ago. I went to The University of Alabama (Roll Tide!) where I majored in Finance with a specialization in Personal Wealth Management. I will be continuing to write the brief in the future, so please let me know if there is any topic you’d like to have written about. I am always around for ideas and questions!