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If you’ve ever read Don Miguel Ruiz’s book, The Four Agreements: A Practical Guide to Personal Freedom, you’ll understand the basic concept to living a happy life comes in four principles that a person must adopt. These four agreements are meant to be made with yourself and help guide your life in the direction of integrity, love, peace and individual freedom from perceived limitations and unhappiness.

You may be skeptical of this somewhat spiritual message, especially its ability to translate over to your personal finance journey, but it really can. When you think about it, adopting a financially disciplined lifestyle does involve internal struggles. You can use spreadsheets and budget tools to calculate how much debt you have to pay off or how much you can earn with a certain interest rate, but it all starts within. Here’s how you can apply the Four Agreements to your finances:

The Four Financial Agreements

1. Be Impeccable With Your Word: Your word has much more to do with your projected expressions and emotions. Focus on positivity and truth rather than negativity and anger. Accepting who you are is the first step in becoming a better you. Understand the reality of your financial situation and focus on the positive ways you can improve it. Don’t maintain a negative focus on what other people earn, buy or have because it doesn’t do anything but fill you with envy. Hold yourself accountable for your personal finance decisions.

2. Don’t Take Anything Personally: You have your own reality and your own dreams, and other people do as well. What these others say and do to you is a projection of themselves and their perceptions. It doesn’t mean it is an accurate reflection of you. Once you understand that, you can immune yourself from being a victim of needless unhappiness. Don’t let other people’s opinions of your financial goals, income or frugal lifestyle deter you from achieving your dreams. Your life and financial goals is about what you want.

3. Don’t Make Assumptions: If you don’t know something, ask questions. Don’t be afraid of the pursuit for personal finance knowledge. Instead of guessing how much money you need for a down payment or how much you should invest for retirement, seek the answers from a professional, or even multiple professionals to find your own answer. You can also direct this agreement toward your loved ones. Don’t assume your life goals are in line with their goals, because they actually might not be. If they are, it’ll help all of you to know you’re working toward the same thing together.

4. Always Do Your Best: You’re not always going to be at your very best from moment to moment. Things happen in life and uncontrollable circumstances affect plans. So while one month you’ll do really well in achieving your financial goals, the next month you might fall short because of a one-time purchase or occasion. By doing your best all the time, regardless of the result, you’ll avoid self-judgment, self-abuse and regret.

You’ll be less inclined to beat yourself up over not meeting your goal of paying off your debt or adding to your savings if you know that you did the best you could and saved as much as you could for the month. Remember, personal financial freedom is a long-term goal achieved through short-term successes. Don’t lose focus on the big picture. Even if you miss your goal, it all adds up to a bigger picture as long as you don’t give up.

Whether you agree or disagree with the interpretation of the Four Financial Agreements isn’t important. What is important is that you use the guidelines to find your own meaning and help you achieve your own goals. So, with that said, what do the four financial agreements mean to you?

Article comments

1 comment

It seems like any good life advice is just as applicable to personal finance as it is to any other part of your life.

Personal Finance is no different than anything else. It’s a journey that requires work and perseverance.