Part One – Know WHY You're Spending
If you're over 40, stress is your number one killer and few things create stress like a money problem! It festers like a persistent sore and left untreated; it wreaks all kinds of havoc in your life. Relationships can break down; self-esteem takes a beating and health issues, well, like I said.
I've had my fair share of challenges over the years (that's what you call them after you've beaten them but at the time, they're just big fat f*#king problems) but the passage of time and wisdom of hindsight bring valuable lessons. We could talk about this subject till we're both blue in the face but rather than indulge a catalogue of horror stories, I'm going to get right to the actions you can take to solve your own money issues once and for all.
Here are the steps I know work. They're pretty much infallible and best of all, each of them systematically lifts the burden of hopelessness you've probably felt at one time or another, plus the impact compounds as you add each one to your repertoire.
1. Know WHY you're spending.
2. Don't do a budget.
3. Understand debt (good vs. bad).
4. Embark on a killing spree.
5. Find new sources of pleasure.
6. Eliminate crap from your life.
7. Own fewer things but BETTER things – for less money.
8. Develop a side hustle.
9. Invest safely and sleep well at night.
If you're an intelligent guy, and I'm sure you are, you could probably take each of these points and work out what you need to do.
But like all the things we know but don't do, it's better to have someone who's actually done the thing, holding your hand along the way. I'm going to do just that. Not all at once mind you, because that would involve a very long post and I don't want you nodding off. So, I'm going to cover each of them in turn over the next few months and arm you with some very simple principles and tasks that have worked really well for me and countless others.
Why can't you stop spending?
I've already touched on my own spending issues in the post, “Life After 40,” but this was just an enhanced version of something that I'd been doing for years.
The root problem was a deeply entrenched and fundamentally flawed belief system that had me seeking fulfilment, meaning and purpose from all the wrong places. I had fallen into the same trap most of us do – spending money on shit I didn't need as a ‘reward' for the lack of purpose and meaning in my life. Yes, I had beautiful children, gainful employment and a modicum of freedom to do stuff I enjoyed but the more I rewarded myself, the more I became a slave to consumption. It really was a zero-sum game.
Witness my stupidity:
- I bought fancy cars to feel successful even though I hated borrowing for depreciating ‘assets'.
- I jumped from one hobby to the next but never had enough time to engage fully in any of them.
- I acquired a variety of toys because they embodied adventure, excitement and all the things I aspired to – yet couldn't get away from work to use them enough.
- I took expensive holidays even though the pleasure rarely justified the cost.
- I wore expensive brand-name clothes even though no one who matters gives a shit what label you wear.
- I ate at upscale restaurants even though the food and service were often worse than places costing half as much.
And so on it goes. It seems I'd forgotten the true source of happiness. Looking back now, it reminds me of that scene at the barber shop in the movie, Eat, Pray, Love (yes, I admit it). Luca Spaghetti says to the American tourist played by Julia Roberts, “The trouble with you Americans is you know ‘entertainment' but you don't know ‘pleasure'!”
Most of the crap you buy is nothing more than a distraction. It's entertainment – not pleasure. Entertainment is fleeting, nebulous and largely unfulfilling. It doesn't endure. But pleasure is a different thing altogether. Pleasure is something deeply felt; it strikes at the core of what makes us human.
Like a kid who acts out their insecurities with violence, promiscuity, vanity or many of the other crutches available to them, thoughtless spending is a symptom of a deeper problem.
With some honest thought and self-evaluation, I'm betting you could trace the origins of your spending proclivities quite easily. They usually boil down to one or more of these sources:
- Your parents' behaviour – what they valued, the relationship they had with money and the meaning they attached to it – whether it was a scarcity mindset, their desire to keep up with the neighbours or a ‘money's not important' philosophy.
- Your peers – where they live, what they wear, what they drive, where their kids are schooled, where they holiday in the summer and so on.
- Marketing messages – how easily you believe the bullshit you read and see on TV, whether you devour the junk mail or toss it straight into the bin, and how easily it triggers the ‘new shiny syndrome' reflex.
These sources have one thing in common – modelling. The trouble is, they're modelling the wrong group. It's been said you'll become the average of the people you spend the most time with. If those people have a reckless and unbalanced relationship with money, then guess what? So will you. If one of those ‘people' is the composite of every marketing channel you consume (TV, radio, magazines, billboards, eBay, etc.), then you're screwed.
Start making changes and immediately, your journey begins.
It's time to stop piss-farting around. If you think the last 20 years flew by, just watch what happens with the next 20! Before you know it, you're going be OLD. Don't waste any more time with bullshit excuses because, as I keep saying, you're BIGGEST problem is you think you have time.
I know it's hard to accept (even though you know it's true), but there is a world of pleasure out there and plenty of it won't cost you a cracker. I'm going to share a lot more ideas around this in the weeks to come but trust me when I say, the best things in life don't come with a label stitched to them or a brand name emblazoned on them for your equally afflicted friends to admire. No, many of them are free and priceless.
If you want to start thinking deliberately about your spending, I recommend you do these five things:
- Quit all TV consumption that comes bundled with ads. I disconnected ours from free-to-air and cable on May 1st, 2007. We have a home cinema with a decent collection of DVDs and an Apple TV box for new release movies and documentaries. We probably watch 3-5 hours a week at best. No more ads.
- Look closely at the people you spend the most time with and ask yourself if their lives are worth emulating. Are they just doing what you're doing and trying to keep up with their own Joneses? Are they genuinely happy, fulfilled, content and excited about life or do they talk about ‘stuff' all the time – the kind that can only be obtained by opening your wallet?
- Think objectively about the way you were raised then put your parents' beliefs into context. They are their beliefs – they don't have to be yours.
- Decide to learn more about money and how it can be used to improve your life rather than distract you from it. A good place to start will be the posts that follow this one. My ideas around money aren't terribly unique but together, they work beautifully.
Now, I should mention that much of what I've said here may not apply to you if you have genuine issues around income deprivation (job loss, serious family illness or other personal issues that limit your earning capacity); or addiction of some kind. Naturally, these will likely require very different sorts of advice, so please don't be offended by the narrow scope of this post.
This post is part one of a series called ‘Fix Your Money Problems Forever'. Check out the others in this series.
1. Know WHY you’re Spending
2. Don’t do a Budget
3. Good Debt, Bad Debt and Ugly Debt
4. Trapped by debt? Go on a killing spree!
5. Pleasure-seeking may cost you your freedom.
6. Eliminate Crap from your Life
7. To save money, buy premium.
8. Create a Business From What you Know
9. Invest Well and Sleep at Night!
Thanks for stopping by and I hope we get to hang out more in the future. And in the meantime, please feel free to share your own experiences. You can also email me directly at email@example.com. I respond to all emails.
Disclaimer: I'm not a psychologist and I'm not a financial advisor's elbow. This material doesn't constitute financial advice but it is a collection of my personal opinions, based on my own experiences.
Also published on Medium.