I believe the concept of financial gravity first appeared on my radar in a post by Jim Wang, who is an amazing financial blogger and most of his posts are easily digestible and I have reprinted his material on my blog before. He discusses the concept using an airplane, but the concept might be more visually appealing when considering a hot air balloon.
Either way, the concept is that our expenses are our financial gravity. The goal is to be airborne or levitate, so financial gravity is an opposing force. If we had no financial gravity, then 100% of our income would be placed toward our financial goals. However, we all have financial gravity because it is expensive to be alive. Plus, our consumerism culture puts a premium on spending.
The theory of financial gravity is that our expenses equate to the weight that we are putting into our airplane or hot air balloon. Whether you visualize it as our baggage or our own body weight, the less weight, the less effort it will require to become airborne. The more weight we have, the more effort it will exhaust to get airborne -- as well as sustain that status.
While everyone has expenses, the makeup of our expenses is almost as unique as we are individually. Even if two people earn the same, they are not going to spend it in the same ways. Therein lies the first part of the solution of financial gravity, jettison the excess baggage. Cutting expenses is taught all the time, but financial gravity provides a different visual and approach to the tired subject. If you want that brand name latte every morning because the coffee in the office is not the same, then it will weigh down your financial goals. Simply stated, the daily lattes are part of your financial gravity. Cutting out daily lattes for coffee in the office would equate to upwards of $1300 annually, which could be placed into a Roth IRA instead, and it would be earning for you. It would become the fuel for your airplane or hot air for the balloon.
Doubling the benefit, cutting out daily lattes means you have one less expense to satisfy, so not only is an extra $1300 being spent toward gas to fund your financial goals, but you will need less money to stay airborne because you have lost that extra weight.
Perhaps going without specialty lattes is too much of a sacrifice. Changing a daily latte habit into a weekly treat would change those numbers slightly. You would only set aside $1050 per year, but you would get to have a latte every week. This might be an additional benefit in that the latte would become more of a treat and less of a chore.
If swapping out specialty lattes for coffee from the office is laughable, then other areas of delaying gratification could be found in comparable exchanges. Maybe it is the weekly movie nights, or the drinks before, after and/or during live games, or declining invitations to happy hour and other social gatherings (perhaps even weddings when the invitations get excessive). Wherever those minor expenses add up in excess of the personal rewards; that is, wherever the drama exceeds the fun. I have heard "coming of age" stories where the subject realized that going out clubbing both nights of every single weekend had lost its appeal.
Do not underestimate how much your social circles weigh into your financial gravity. Being responsible enough to prioritize your social calendar is a good trait. Playing a victim of requests for your presence is not a good trait. Presumably, few friends are so close that that their personal finances are taken into consideration when making social plans. The assumption becomes that the invitation will be declined if the event is not a priority. If your long-term financial goals are more important than weekly clubbing events, then that is a sign of maturing. If your friends do not follow suit, then you may just be maturing ahead of them.
Daily lattes, weekly movie nights, happy hours, tailgating, clubbing, etc. are all weighing down your financial goals by giving you less money to set aside and bloating your personal maintenance.
