December - January 2023
Lighting the Darkness
The Importance of Sustainability
By John Brummitt
Sustainability has been a frequent subject over the last decade. We hear the food we buy and eat is sustainably grown and harvested. Businesses strive to operate with sustainable methods and techniques to protect the environment. The truth is, even we individuals need to plan in sustainable ways. Merriam-Webster defines sustainable as “of, relating to, or being a method of harvesting or using a resource so the resource is not depleted or permanently damaged.”
While this definition brings up images of forests harvested carefully for lumber or seafood being pulled from the sea responsibly, we have many daily resources that need to be sustainably harvested for our success. (I am using the word successful in the broad sense of thriving, not only surviving.)
Most of us don’t need to be rich, and while we think it would be nice to be wealthy, most of us just wish to be comfortable with our finances. Consider these recent studies and stats: 78% of Americans were financially “stable” in 2021 (Federal Reserve); 34% of Americans were financially healthy (Financial Heath Pulse 2021 U.S. Trends Report), while 40% of Americans are struggling just to pay their bills right now (Money’s analysis of Census data, July 2022).
As Americans, we just don’t want to worry about how to pay our bills, and we want to enjoy some of the nice things in life. This is where sustainability comes into play. We harvest our financial resources to purchase things we need but avoid depleting them fully or damaging our ability to use them in the future.
In its most basic form, financial sustainability is not spending more than we bring in. When we keep from overspending and retain a financial base for the future, we have sustainability. As the remainder or base grows, if our expenditures don’t increase at a greater rate, the length of our sustainability grows as well. This gives us a greater chance of not depleting or damaging our resources for the future.
Unfortunately, it is easy to “talk the talk” but much harder to “walk the walk.” Most people want lumber and seafood sustainably harvested, but it costs more, making the purchase a tougher choice. The same is true in our finances when faced with opportunities to enjoy money now versus building sustainability for the future. The choice to delay gratification can be difficult.
Financial sustainability starts the same way forestry and fishery agencies start. You must be intentional. No one who sustainably harvests timber cuts down trees for lumber without replanting the harvested trees. Financially, we set aside money or resources to replace the income we will lose in the future when we retire or are unable to be employed.
By “replanting” our income into savings, retirement, and other investments, we begin to build harvestable resources for the future. Replanted income grows (and replants itself) through compounding interest. Hopefully, this process can continue into your retirement years, so when you do start harvesting your carefully managed resources, they regenerate at a level to provide lifelong sustainability.
Sustainability, whether personal finances or God’s amazing creation, is something all of us should embrace. Sustainability will not happen unless we are intentional about what we take and replace. Random, unplanned, or undisciplined use of our resources will not be as successful as living with consistent, purposeful effort. We set ourselves up for sustainability when we plan and then stay consistent with our plan.
About the Author: John Brummitt became director of the Board of Retirement in January 2016. A 2011 MBA graduate of Tennessee Tech University and a 2004 graduate of Welch College, he has been with the Board of Retirement since spring 2006. Find more tools to help you live your best life at BoardofRetirement.com