The whole is greater than the sum of its parts. Another way of saying this is that things are better together than alone.
Think of it this way, the human body is made up of oxygen, carbon, hydrogen, nitrogen, calcium, sulfur and the list goes on… Individually none of these things think, create art, write, love or are self aware. Yet, put them all together and there you are. Reading and thinking about what you’re reading. The whole or unification of all those parts and particles are a much greater thing than they are individually.
What does that have to do with your retirement goals? Everything.
Think of your retirement goals as the “WHOLE” and the “SUM OF ITS PARTS” as the steps you take to get there. Putting one payment on your credit card and reducing your balance by $5.00 (a part) is not in and of itself going to fulfill your dream of financial independence (the whole). For that matter, neither is putting $10.00 into your RRSP (a part), going to magically get you retired (the whole) and out of the work world.
Let’s look at the human body for a moment. Basically the human body is 65% Oxygen, 18% Carbon, 10% Hydrogen, 3% Nitrogen, 1% Calcium, 0.4% Potassium and the list goes on. Like the human body, your retirement plan will have multiple parts that vary in quantity. A percentage of your income will go into debt reduction, another into savings and another into emergency funds and so on. But isn’t retirement more than just income? Don’t we have other things to think about? Of course we do.
Let’s go back to the human body for a moment. Although the body is about 65% Oxygen and only 10% Hydrogen, Hydrogen accounts for about 62% of our atoms and Oxygen 24% of our atoms. What does this mean? It means that we have to look at all aspects of our plan and weigh the importance of each part.
We need to break things down in different ways and look at our bills, our savings and our spending habits from multiple angles. Sometimes you need to look at the percentage of Elements and sometimes you need to focus on the Atoms.
If you’re making car payments, would you be better off using some of your savings and paying it off straight away and then taking those same car payments and putting them into savings? That same logic applies to your credit cards and any other debt.
Look at all your debts and savings together and build a plan where you are paying the least amount of interest over the span of paying down your debt. Don’t just look at it one way. Try running different schemes and see what works best.
Have a few friends over and go over your plans and see if you can share ideas. What’s worked for one person may just work for you.
So in closing, many small parts or changes can have a huge impact on our lives and our finances. Remember that getting out of debt and saving for your future is a good thing. Just keep in mind that your happiness and that of your family and friends, the joy you have in everyday life, all those things are (parts) of the whole and therefore are needed to keep the plan alive and moving.
I hope some of this makes sense.
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