CFI Blog

Financial Independence Means Avoiding Tough Money Decisions

Choices are the hinges of destiny.”


“The greatest accomplishment began as a decision once made and often a difficult one.”
–Michael Rawls

As many of you know, we are proud dog owners. We don’t have children, so our dog is the proxy for progeny, meaning that we’re the crazy obsessive-compulsive dog people that I’m sure everyone makes fun of behind our backs.

So be it.

Recently, we were at the dog park with him watching him racing a German short-haired pointer who lives in our neighborhood. We were talking with his owner enjoying an unseasonably warm February Saturday morning when we looked up and saw our dog holding his hind leg up. He’s occasionally come up gimpy when playing at the dog park, so we figured we’d give him a few minutes to walk it off.

A few minutes later, was still refusing to put weight on the leg. At that point, I suspected it was something more, so we hauled him off to the car and drove him straight to the vet. The vet had us walk our dog up and down the hall and then started doing some pulling and pushing on our dog’s leg.

“What I thought,” he informed us. “He has a torn ACL.”

I’ve torn my ACL, and I immediately conjured up images of a 6 month recovery period, which, for a 7 year old dog, is a significant portion of his remaining good years. I was crushed.

Actually, it turns out, the recovery period is 12 weeks, and while we’ll probably never be able to take our dog to the dog park again, he can still go on long walks and hikes with us. Just no more fetch or unsupervised off-leash time.

Saddening, but not a mortal blow to his lifestyle.

The vet explained the two types of procedures available to repair ACLs in dogs. The cheaper version, costing $800, involved basically restitching the parts together and hoping they set. It was good for dogs up to about 40 pounds and not recommended beyond that. The second one, called a TPLO, involved reshaping a bone and setting the leg into it, strengthening the whole system. It was recommended for larger dogs and costs $2,100.

Our dog is 50 pounds.

It was no question.

We opted for the TPLO surgery.

During the recovery process, rest and recuperation is paramount. No running, no jumping, no excitement, no overexertion. We talked to the vet tech about the post-surgical recovery, and, since we had already planned a ski trip to Colorado during the time that the surgeon was available to make our dog into the Bionic Dog™, we decided to board him for the week after surgery.

Thus, when we picked him up from the vet, our bill was close to $2,700.

He was happy to be home.

Then he realized he wasn’t getting out of his cone of shame.

This was the second major leg surgery our dog has had. When he was 6 months old, he would lay down in the middle of walks. We took him to his vet, who determined that he had elbow dysplasia. $3,500 later, he had no more bone shards in his elbows, and a month-long recovery before he could do more than walk to use the bathroom.

Financial Independence Makes Hard Money Decisions Easy

Financial Independence Makes Hard Money Decisions Easy

I don’t tell you these stories to say how much money we’ve spent on our dog. It’s not a measuring stick of our level of care for our dog compared to someone else’s situation. If I had my druthers, he would have been in perfect health from the day we got him from the rescue shelter.

However, in both cases, being in a position of financial strength allowed us to not have to make a trade-off between, say, not contributing to our retirement accounts and getting surgeries for him or contributing and not getting surgeries for him.

We were in a position that it was a both-and decision. We’d already earmarked money for such circumstances.

Yes, we’re using mental accounting to segregate an emergency fund from all of the other money, but the point stands.

We didn’t have to make a choice.

We didn’t have to go with the cheaper surgery and hope that it stuck.

We didn’t have to decide if we could afford the surgery at all.

Yes, the biggest benefit of financial independence is freedom of choice. However, a secondary benefit that we’ve experienced is that what would have been a very difficult decision in a different circumstance was one that we didn’t even have to think about.

You can’t just get the bare minimum and hope that things work.

When I was in college, we had a joke which, while not understandable to most people, was quite funny for us in our circumstances.

Q: “What do you call a West Point graduate who has a 2.0 GPA?”

A: “Sir.”

Although not the plan I pursued, it was entirely possible to get a 2.0, graduate from West Point, and, assuming that you were a reasonably competent military officer, retire after 20 years of service and not need to work again.

I’ve seen people who have tried to complete an analogous run in their financial lives. They figure out just how much money they need to get by if they recycle soap shavings and make sweaters out of dryer lint, and then they quit.

In a perfect world, if nothing happens outside of their exact plans, then they won’t have to go back to work.

It rarely does, and five years later, they’re back at work, wishing they’d just worked five more years before calling it quits.

That’s because it’s possible to fall in love with your own plans and models and fail to see any possible outcome aside from the perfect one that you envision. You look for other people who have done the same thing, and, if you look long enough, you’ll find someone who has dodged all of the raindrops of life and stayed dry. You fall for confirmation bias, and believe that your plan is solid enough that you can pull the trigger.

The problem is that in doing so, there is no room for error.

Two ways to give yourself room for error

  1. Wiggle room in your spending plan. We plan for spending well in excess of what we actually spend. We try to leave a significant cushion between what we spend and what we earn so that if there are $2,700 dog park incidents, we’re not left trying to push in the balloon and either a) wondering where the money is going to come from, or b) hoping that the market doesn’t tank any time soon. Good plans and budgets have a margin of error in budgeting, because even six sigma budgets sometimes go astray.
  2. Insurance. While we don’t have pet insurance (our dog would not have qualified), and this isn’t meant to be a discussion of the pros and cons of pet insurance, there are plenty of other insurances that you should either carry or have the financial stability to withstand the impact of self-insuring. Retrospectively speaking, insuring our dog when we adopted him as a puppy would have saved us a significant amount of money, but, we were also in a position where we could comfortably self-insure whatever might happen to him. In either instance, hoping that the worst doesn’t happen is a poor insurance policy.

Our dog is currently in the middle of rehab. He hates his Elizabethan collar and whines all day. But, we know that the recovery process has a known end point, and that he’ll be better once he’s recovered.

This was an easy decision, and one that we’re very thankful that our prudence allowed us to make without even having to consider it.

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John Davis
John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.

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