Every Decision Has Its Tradeoffs
What you’re giving up, even when you don’t see it
A Sound Plan on Autopilot
The last time I received a raise, I knew what to do. I had a plan with where the money would go and what it would be used for.
Part of it would go to taxes, and at least a quarter to half would go towards long-term savings. The rest was free to spend how I pleased.
That’s how I approached most raises and the occasional bonus. Some for Uncle Sam, some for future me, and some for now.
It’s hard to argue against that being a sound approach. It takes the guesswork out and keeps me in line. But I realized I was doing it on autopilot. I hadn’t reconsidered why that split made sense for me anymore. More importantly, I hadn’t considered what I was trading away by sticking to it.
The decision wasn’t just about how to split the money. It was about whether I wanted to prioritize life now or later.
Once you start looking for the tradeoffs, you’ll start seeing them everywhere:
Where to live. Higher cost for lifestyle, or lower cost for flexibility.
Change jobs. More money or more flexibility.
Retire earlier. Gain time now or more security later.
Most of these decisions don’t have a clear right or wrong answer. It helps to think about the version of you that results from each choice.
The Tradeoffs You See
My wife and I both chose not to study abroad in college. For me it wasn’t just the cost. I needed 150 credits to qualify for my CPA, and going abroad would have meant a fifth year of school, summer courses, or extra coursework during my first years of working. The financial and practical tradeoffs were real and I could see them clearly at the time.
What I didn’t see as clearly was everything on the other side. The friendships you build when you’re living somewhere new with a group of people doing the same thing. The experiences that only make sense when you’re that age, in that moment.
We didn’t take our first international trip until our honeymoon, years later. We travel often now and stay at nicer places than we ever could have in college. But it’s a different experience. Some of what we would have had then, we can’t quite replicate now.
My wife had her own version of that tradeoff. She also chose not to go abroad, and for a while she regretted it. What she got instead was an internship in Washington D.C. that ended up shaping her entire career. A tradeoff she didn’t fully choose so much as stumble into, and it worked out in ways neither of us would have predicted.
Same decision. Very different outcomes. Neither of us saw the full picture at the time.
The Tradeoffs You Miss
New parents often talk about the version of themselves that existed before they decided to start a family. The same is true if you changed careers or moved to a new city. The old life ends, a new version begins. That’s part of the tradeoff.
You’re not just choosing between options. You’re choosing between outcomes. Each decision creates a different version of your future. And a new set of tradeoffs.
That’s easy to see in hindsight. It’s harder to recognize in the moment.
Most decisions don’t feel like tradeoffs at the time. People often just decide what feels like the right thing to do. But underneath that decision is another layer. You’re choosing one path over another and giving something up either way.
Circling back to how to divvy up my raise. When I set how much to save, I knew there was an amount I needed to put away and a goal I was working toward. The tradeoffs were still there whether I acknowledged them or not.
Save the same percentage. I’m trading the chance to spend more now — on travel, experiences, more stuff.
Spend more instead of save. I’m trading future flexibility.
We’re in a much stronger position now than we were early on. Some of that came from being disciplined about those raises and bonuses. Some of it came from keeping certain costs simple.
Take our home for example. It was a real stretch for us at first, but we’ve stayed in it and the breathing room it’s given us financially has been significant. It’s not something I thought much about at the time. Now my wife and I talk about it often.
That flexibility has allowed us to pull back a little and make more room for life now. We travel more. We’ve gotten more comfortable spending on things that matter to us. The tradeoffs are still there. We’ve just gotten better at choosing which ones we’re willing to accept.
You can’t eliminate tradeoffs. You can choose which ones you’re willing to accept.
Depending on where your savings are, you might decide you’ve built in enough flexibility already. Or you might decide that money is still better off going toward your future.
The last financial decision you made, did you consider the tradeoffs? Did you actually choose which ones you were willing to accept? Or was it an afterthought?
The tradeoffs are there either way. You just get to decide whether you see them or don’t.
— Brad
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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice.