To be honest, as a self-described rich person, I can be a bit of a rich person apologist. But I have always been puzzled as to why the rich give less as a percentage of their wealth to charity. Some people surmise it’s because the wealthy are insulated from socioeconomic suffering or because the rich are unethical.
I had previously surmised the reason was that giving is a skill. If you don’t develop the skill when you have less, it doesn’t come naturally when you have more. So my solution was – build the habit.
How the Rich Can Justify Giving Less
A new idea popped into my head after discussing the differences between absolute and relative frugality. The rich may treat charity in terms of absolute and relative generosity.
For instance, the rich give on average 1% of their income as opposed to 3% by the poor (I don’t know if this is pre- or post-tax). So 3% at a $33,000 post-tax salary might be $1,000. 1% at a $600,000 salary would be $6,000.
The poor don’t give a lot in absolute terms to charity. They do give a percentage that is significant for them. While the rich can give a lower percentage, they can give themselves kudos because of the amount. $6,000 seems like/is a lot of money and the rich might stop at that amount because it’s such a large amount. Both sides can pat themselves on the back by choosing to view their donations in the way that is most beneficial to them.
In a way it makes sense. The poor can’t give much in terms of absolute amounts without doing serious damage to their finances. The rich don’t have to give a large percentage in order to make an impressive gift.
And the absolute amount certainly matters. The media have chastised Jeff Bezos for his lack of philanthropy but he, his parents and Amazon have given away hundreds of millions. Further, to be fair, if you have a lot of money to give, it would be wise to take your time and research before making any moves.
Are the rich terrible?
I’m not trying to shame anyone regarding their charitable giving. I applaud anyone who gives to charity in any amount (so long as it isn’t to the church of scientology etc). Decide on a charitable budget that makes you comfortable and then view your choice in whatever way that makes you feel good about it. It’s a great deed – it doesn’t have to be the greatest deed to be commendable.
Does viewing your charitable donations in terms of relative or absolute generosity help you feel better about your donations?
Before we talk about the right track for your finances, have I ever told you about the time that my appendix ruptured and I missed it? For over a year? Well, I told this story to my doctor friends and they all shrugged their shoulders and said, well, people’s bodies are so wonderfully different. That’s it. No wisdom. No explanation. Just that people are different.
I was reminded of this because every Friday at Mark’s Daily Apple, they run a success story. A few weeks ago, the success was a little controversial. The featured lady had plenty of smiling pictures, described her diet, and says she feels great. The problem – some people thought she wasn’t eating enough based on their own caloric estimates of her diet. You can’t have fewer than 1200 calories, they say.
Do others know your life better than you do?
This is an interesting criticism. Here’s this woman who has found this diet that works for her. She has tried it out and found that her energy and weight have greatly improved. She looks healthy. She doesn’t look underweight. And yet, internet strangers, who have probably never taken a nutrition course and have never met this woman, feel the need to question her lifestyle because they read somewhere on the Internet that 1200 calories is the minimum that any woman should eat.
Could it be that this woman doesn’t know how to take care of herself and is missing some huge impending problems? Sure, it’s possible. But should we give her the benefit of the doubt that maybe her body is different and that she knows what’s best for herself?
Probably. I mean, I certainly follow a strange diet that works for me. I told my doctor, like a good little patient and she said the same groundbreaking wisdom about nutrition I had heard on a podcast:
If it works for you, then it works.
People are different. What works for you might not work for me. And if it works for you, why should you stop doing it just because it doesn’t work for others? Why should you stop just because they’ve done some studies to say that it didn’t work for other people? If it works for you, maybe it just works, full stop. Maybe you don’t need to conduct a double blind study to prove its validity. It works in the only place it matters – in your life.
The same applies to personal finance.
How to get on the right track with your finances
Our budgets have different categories, different percentages. Savings rates differ. Our incomes are different. It’s easy to look at others and wonder how you’re doing comparatively. How do you know you’re on the right financial track?
Are you making acceptable progress toward your financial goals?
Does your plan make you feel calm about your finances?
Is your lifestyle sustainable and does it make you happy?
I think we sometimes fall into the trap from our school days – assuming that there is just one right answer. For our lives, the right answers are less clear cut.
Every person is unique and what works for you won’t necessarily work for anyone else. It can be easy to be swayed by experts that pressure you to do things their way or even family or friends who don’t understand your way. You don’t have to convince anyone that your way works for them. The question to ask yourself is whether your financial plan makes sense for you. Let’s never forget that personal finance is not about math, it’s about fitting the money plan to the person. Whatever plan works for you – in that it’s something that advances you to your goals while letting you live your life – is the right track for your finances.
This is the first in the series “Who Picks Up The Check?” about dating and money. Rachel of Dousing the Fire is a neuropsychologist who recently quit her job, is pursuing her own definition of financial independence and is just generally a badass. I spoke with Rachel about dating with large income disparities, the effect of the FIRE movement on in-demand jobs, and bad dates.
If you want to be interviewed, use the contact form or send me a DM on Twitter @thegiveandget. This interview has been edited for length and clarity. Editorial comments are in brackets.
Let’s start with some background. What kind of beliefs about money did you have when you were growing up?
My parents were not by any means high-income. My mom worked as a teller at the gas company (in the 80s, people paid their bills in person). My dad worked in materials management. We were barely middle class.
My grandparents had a business that they started in the ‘70s. There was a recession but in the end it did very well. Day to day, I was lower middle class but when I was around my grandparents, I was upper middle class.
My family believed that they could always make more money. I was taught not to worry about it so much.
Where did you learn about FIRE and what has been your experience with it?
It may have been Millennial Revolution that was the first blog that I came across. They are very anti-homeownership and I just bought a house and I am now of the same opinion as well.
In the field I work in, you have to really want it. The year I had my internship, there was a 26% non-match rate. And if you didn’t match, you would just have six figures of debt [and no job].
On FI, they emphasize becoming an electrician or an air traffic controllers [high paying jobs without high student debt loads]. But if everyone did this, we wouldn’t have geriatricians. We wouldn’t have people deep in debt doing jobs that are very much in demand and if we lost that, we’d all be up a creek without a paddle.
Maybe there’s a middle path where you can go and take student loans but not that much. But no one’s talking about that yet and no one’s talking about changing the system.
If you had a definition of FIRE, what would it look like for you?
I am pursuing FIRE. It’s ironic because the last thing I want to do is travel. I just want to live out in the country and do my consulting work and forensic work. I’ve done some statistical consulting and do some disability insurance review and some report underwriting.
I’m a public expert on criminal forensic neuropsychology. As a neuropsychologist, to get your foot in the door, you have to do a lot of criminal competency evals. And sometimes it’s a big pain because the patient is on the ground covered in feces. [Editorial note: Rachel is a badass.] But as lawyers get to know your expertise in sex offender analyses, you get more work. As a neuropsychologist, not just a psychologist, I’m more likely to be used in cases involving the death penalty.
I worked for 19 months in the federal prison system. Now, even my real estate tenants don’t scare me.
You recently quit your job – does that mean you’re FI?
It just means I’m fearless and have a low tolerance for BS.
Have you read about Kiyosaki The Cash Flow Quadrant? Most people are employees but the other class of people who trade time for money. So I’ve only traded in being an employee for being a self employed professional. The other side of the quadrant is investment and entrepreneurial, which is the real estate part. I want to continue to invest and build a business with passive sources of money because the goal is to quit trading time for money.
You have an interesting perspective because you have dated both as a high-income person (doctor) and as a lower income person (grad student). Tell us about that.
When I was on post doc in Toronto, my salary was $40k CAD/year but in Toronto you are considered low-income if you make less than $45k. The most interesting thing was the barriers the low income imposed. If someone wants to invite you to go to do something, you have the uncertainty of knowing who will end up paying.
If you’re lower income you’re at the mercy of your finances and of the other person. Once, I was dating someone and we were going to the fashion district in Toronto and something happened on the transit. Trolleys were full. I called him to say that I would be 30-45 minutes late. He said just get a taxi and I’ll pay for it. In my head that wasn’t even an option. I was so upset. It just ruined the evening.
How did you handle that uncertainty of not knowing who was going to pay?
I typically got things paid for. My best friend and I dated the same guy but when i dated him, he paid for everything. It wasn’t even a question. When she dated him, they split everything fifty-fifty. Maybe it was feminine wiles. Same guy, same apartment, same job, same city – just different women.
But I also thought, it’s just money, I can always make more. I wanted to enjoy the city at least a little bit.
I probably would have told my younger self to lighten up a little bit. Get the damn taxi and do not let it ruin your life. Spending an extra $50/month would not have broken me if it’s a means to an end. If you’re voluntarily impoverished because you are pursuing some high end profession, lighten up a little.
How was dating different when you were high-income?
I got into a longer-term relationship when I started making money. I felt a sense of responsibility to provide because I was dating this guy who had a son. It was interesting to me how quickly that kicked in – how much responsibility I felt as the higher income person to take care of my partner.
In my Italian family, they’re adamant that the man takes care of the woman. So when he met my family, I told him that he better bring a roll of hundreds because if they saw me take out my wallet at any point they were not going to like him.
Were you ever resentful of having to pay for everything?
I was not resentful at all. He busted his ass and he was doing HVAC on roofs in Florida in July. He’s working harder physically 110% and he doesn’t have as much to show for it. He knew I was a doctor and I knew he was in HVAC. When I would ask him to dinner, I would pay because I asked him. If we went out for dinner last week, he would bring a pizza next week. Or if I had a rough day he would ask if he could bring by some wings.
Every Friday, I would typically buy steaks, and he would grill them or I would take us all out to dinner. A nice dinner is nothing for me. He has worries about overdrafts and it’s a very different world.
I was happy to do that for him and his son. When we went to a steakhouse for the first time his son had never been to a restaurant with cloth napkins.
We never said it out loud but we understood and did what felt equal for us. It’s like Thanksgiving – everyone brings something to the table.
Does being a high-income woman limit your dating prospects?
Being a high-income female professional very much limits your dating options. You occasionally get a unicorn with a very secure man who doesn’t care if you make more.
You are limited in the lower income or lower education men you can date because they have to be secure and open to it. Some of the higher income men are hypercompetitive and can also get threatened by a high income. It can be difficult to align personality and income to get a good fit. In college any kind of guy would date me. If you’re a median earner you’re less of a threat to men.
Still, I very much preferred higher income dating. Having a higher income in general is less stressful for the world.
If you could pick the ideal spouse in terms of financial habits and beliefs, what would that person be like?
It’s hard to quantify – it would depend on where they are in their journey. But there are real estate people and not real estate people. My ideal person might have to be a real estate person in order for me not to seem like I’m totally insane.
It would have to be someone who understands leverage but isn’t too crazy. Someone who is intensely focused on whatever they’re trying to do. which is probably going to involve real estate.
I like a good adventure. I’m very judgmental when people are operating from a place of fear. I dated a super cautious engineer type in Florida and he seemed afraid of losing a penny. I do think I need somebody who’s ready to be bold in his financial charges.
Any terrible dating stories that you want to share?
I dated a guy in Missouri who I knew was a psychopath but he was nice to look at and I kept dating him just to see what he would try. He forgot his wallet on our first date. That’s a classic move there. Because i knew what was going on I never lent him any money. He put my name as a reference for a payday loan later. Sometime I do things just for the adventure. I love a good adventure.
Another date that comes to mind: I saw this profile, a little bit hipster, big glasses but he states in his profile that his dad committed suicide and he was traveling around the country getting to know his dad’s friends to write a memoir. I meet up with him and he was the most boring person I’ve ever met. He looked so sickly I wasn’t sure he was going to be able to stand up at the end of the date. At the end, we were walking to my car and he for a hug. I offered him a handshake.
Do people go on dates with you to get free therapy?
People ask me questions that they want to ask a psychologist. What do you think about chronic traumatic encephalopathy? I get some stupid questions from time to time. In person, everyone says “you’re analyzing me right now!” No, I’m not , other than that now I know your IQ.
What do you wish you knew way back when?
If you know what you want, prescreen it. As a psychologist, I know that the #1 thing couples fight about is money. It’s so personal and intimate to people that it’ll be so integral to relationship if not aligned.
I actually wish there was a way to know more bout people’s financial philosophy without society considering most of these things rude. If you find out later that someone has $57k in credit card debt that’s a big damper in a relationship. I don’t know that I’ve figured out how to solve that problem. Maybe you should just be rude and know that you have a lot of credit card debt than drag the relationship along for 6 months and be like “whoops.”
When I told someone I was going to FI, he said I wouldn’t want to retire. I wouldn’t want to either. The important thing is to tell people about your relationship with money first.
The 50-20-30 budget is a cornerstone rule-of-thumb according to personal finance budgeting experts. In it, you spend 50% on needs, 20% on savings and debt reduction and 30% on “wants.” This may be sacrilege but this seems like a terrible plan for your budget.
Frittering money away on a budget
Consider the following hypothetical 10-year spending of a 23-year old who makes approximately $30,000/year post-tax and who follows this budget.
Starting with a modest entry-level salary and modest raises, this person has spent $108,055 over just 10 years on indeterminate “wants.” Over a 40 year career, this number could be half a million or more.
What do you get if you spend 30% on wants?
What do you think these wants are? Well, if you look at the number as $100k, and think of spending a lump sum like that, it seems like you could have bought some really awesome stuff that would be valuable now. You could have a designer wardrobe, a nice car, some nice vintage furniture or maybe you can point to key moments in your life- lavish vacations, a big wedding.
But if you subdivide it into $750-$1000 month, it’s very easy for that money to disappear rapidly. You find that you can piddle your money away on Kardashian-endorsed clothing, a Hyundai, and overpriced West Elm furniture (I don’t have anything against the Kardashians or Hyundais but I’ve heard West Elm isn’t very good). Instead of memorable meals, you’ve spent way too many weeknights at the not-so-good pub or the meh takeout place.
Why 30% “wants” can be a bad idea
Budgets are often thought of as ways to restrain our spending but, if used incorrectly, they can be the impetus to increase spending. Say this person is 23 and never made any real money before and now has license to use $750 with no real purpose every month. How is this person going to spend that $750? Probably not in a malicious way but likely in an easy way. Someone suggests a trip somewhere and you go.
Then, you have a rough day at work so you go out to a fancy dinner to treat yourself. Upgrade your electronics and your cars. Upgrade your furniture. You have kids and buy your kids stuff. At the end of 10 years, you have the latest versions of things you used to have when you were 23, your closets are filled with stuff, you have a fair number of frequent flyer miles and you wonder, why am I still in debt? Why don’t I have the career I want? Why don’t I have the relationships I want? Why isn’t my life fulfilling?
All this regret and you’ve been sticking to a budget. You did everything the financial gurus told you to do, but you might not be getting ahead of your finances.
A Possible Solution
The regrets people have in their 20s were not traveling more, not building close relationships, not exercising, not trying new things. Instead of putting an indiscriminate “wants” category, perhaps you could subdivide your “wants” budget to address these possible regrets.
Chinese billionaire Li Ka-shing offered some interesting budget advice. Some background on Li, after his dad passed away, he was forced to start working 16-hour days at age 15. He did not come from wealth but is worth an estimated $31 billion today.
Anyway, Li’s advice is to divide one’s budget according to the following categories:
50% live. 20% save. 15% grow. 10% build. 5% play.
Here’s How It Would Work
Here’s an example of what this looks like on the same $30k posttax salary:
$50 building your network/dating (building new relationships)
$50 books/classes (structured learning)
$200 travel/trying new things/starting a new business (independent learning)
Total =$375 =15%
Build (acquire the things you will need in your life)
$100 furnishing your home/home needs $100 furnishing your wardrobe/personal needs $50 exercise (classes, building your own at-home gym) Total = $250 = 10%
$500 savings/debt repayment
Total = $500 = 20%
Play (whatever you want)
$125 entertainment/eating out
Total = $125 = 5%
You get $50 to spend on networking this month. Who do you want to meet and treat to coffee? A cute dating prospect? Your coworkers? People with your potential dream job?
You get $200 to travel this month. Where do you want to go? What do you want to see? Paris? Polynesia? Pittsburgh?
You have $100 to spend on classes. What do you want to learn? Java? Italian? How to bake a cake? How to play the piano?
Even you can’t make these percentages, that’s fine. It’s something to work towards. The point of a budget is structure, not perfection. The beauty of this budget is that if you follow it perfectly, you will grow and you won’t squander too much of your money away on activities and products that you won’t remember.
I’ve heard some people say that the 20s don’t matter. Those people probably think life doesn’t matter. In your 20s you may (finally!) be out of school, and you can make your 20s can be all about growth. Even if all you learn is how to tread water, that’s a great skill
Some people enter their 30s in hundreds of thousands of dollars in debt. Why can’t you use these 10 years to build a foundation for your career growth?
Giving advice is tricky. First, you might not know what advice to give. Then, even if you know the absolutely right solution, the asker might not follow your advice. This has led some people to give advice based on what they believe the asker might follow instead of what may be more useful. I guess for me, that rings false because lawyers don’t get to give illegal advice just because we believe our clients are crooks.
Others believe that people may follow their advice but will be disappointed if they get different results. These people are very wary of giving advice of the “I did this, you can too!” varietal. They say insinuating similar or even positive results could be misleading. I’d like to think that people have seen the Etsy Fail blog and/or understand the term “your mileage may vary.” You train as hard but you don’t run as fast in the race. You study as hard but get different grades. You can diet and exercise and still not be as skinny as someone who eats whatever they want and lays on the couch. This is something we all learn about pretty early in life – life is not a simple cause and effect machine.
My thoughts on this: if the advice is solid, I don’t think we should concern ourselves with the results. First of all, none of us can guarantee or predict results. (The only people who try to do so are selling something.) If you write solid advice to a group of people, you can’t take on too much responsibility for what happens. We can’t predict the future for ourselves, let alone anyone else. The only thing we can control is our choices.
Second, the process is more important than the results. I believe in teaching good habits, even if the results will inevitably vary. If we focus too much on the end result, if we get too caught up in “well she has these advantages” or “he has these deficiencies,” no one will ever start anything. And that may be the worst kind of advice. If we focus on the journey and the good habits, I think it would be exceedingly rare for anyone to get to the end and think, I wish I hadn’t even started.
I think about the call for transparency in personal finance blogs and I wonder if that’s beneficial. Let’s say someone reads the Frugalwoods, who have gotten some heat for pretending to be middle class while earning a $300k salary, and the reader is inspired to live a simpler, less expensive lifestyle and save more. Is there a bad outcome in this scenario? To me, the ends justify the means.
Some might say, bloggers can be inspiring while being honest. But I’ve disclosed that I have a high salary, and I’ve already heard a few comments that imply that I’m unrelatable. I think people get most inspired by those who seem similar to themselves. If you broadcast you have a high salary, fewer people will think they can follow you, even if the advice and the steps are the same. If you broadcast your high salary, other people will focus on the results, see it as unobtainable and they might not even start. That’s a bad outcome. So if some bloggers want to create a facade of being low-income and that facade helps more people, who am I to judge? They are helping people. I am unrelatable.
Some might also say that bloggers could more transparently advertise the difficulties in their paths, but I wonder if this is also counterproductive. When I think about everything I’ve ever accomplished in my life, I’ve never thought about the obstacles or my deficiencies. For instance, my friends wanted to run a marathon, and I figured I would join them. I had never run more than 10 miles before but I followed Hal Higdon’s program and I was fine. I think if someone had told me that I wouldn’t make it, I probably would have backed out. Some people like to prove people wrong – I am not one of those people. Lots of people are easily discouraged.
This is the beautiful thing about tiger moms. They assume their kids are capable and make their kids keep trying. Usually the kids soar because the kids have no idea that they can’t do it. I think it’s also true for adults – if you have high expectations, people will reach them more often than you would expect. Part of it is that you have no idea what the other person can accomplish and the other part is that people stretch to achieve what they believe they can achieve.
I think there are enough naysayers in the world that I don’t need to be one of them. And I think the basic tenets of personal finance are something that nearly everyone can do.
In fact, succeeding in personal finance is not that surprising, even if you start from the bottom. When I think of all the amazing things that people have accomplished when they really shouldn’t have, personal finance seems easy. Like Spud Webb never should have made it to the NBA. There are guys who are 6’8″ who don’t make it to the NBA. So someone who is 5’7″ generally has no chance. And no way would he ever have the chance to compete or win a dunk contest. I’m sure everyone told this to Spud Webb. I’m sure the number of people who believed in him making it to the NBA was very small. I’m sure there were a number of people who told him to do something easier. If he focused on the results, he wouldn’t be Spud Webb. He just focused on being an awesome basketball player. (See also Muggsy Bogues)
I think of the pianist with only one hand. There are people with two hands who aren’t pianists. Hey buddy, let’s steer you to painting instead (I mean, you don’t need both hands for painting and there’s a quadriplegic painter, so one hand doesn’t seem so bad). There are tons of things that someone with only one hand can do easily – playing the piano is one of the hardest. But that guy said no, I want to play the piano. And he did.
I remember I heard an interview with a man without limbs who became a wrestler and when I tried looking him up, I couldn’t figure out which search result was him because there were multiple successful limbless wrestlers.
I’m following the budding career of Shaquem Griffin, the first one handed-NFL player in the modern era. Now, if I had a son with one hand who wanted to be in sports, I would direct him towards running or soccer. And those would have been the safe choices. But it’s also less inspiring.
Shaquem Griffin was selected in the fifth round – he wasn’t a sought-after prospect. He knew the odds were against him in the draft. But from what I read from his interviews before he got drafted, the results of the draft, which he couldn’t control, were not the most important thing. He had already created a life for himself where he didn’t say, this is my disability, what can I still do? He started with, this is what I want to do and I won’t let my disability hold me back. And that’s the kind of mindset that is going to get him far and inspire others. That’s the kind of mindset I want to cultivate in myself and others.
It would have been very good advice to tell any of these people why they couldn’t do what they were trying to do. Why waste your time? Try something easier. That’s focusing on the results, not the process. All of these people succeeded because they focused on the process and weren’t too afraid to start.
So when people say, people can’t save money, I’m surprised. There are countless dyslexic authors, but telling someone they can save money is setting people’s hopes up. Because saving money, that’s impossible.
I’m not saying the message should be, you will get a million dollars by age 35. The message should be, if you develop these habits, you will have a great chance at succeeding no matter where you start from. Yes there will be obstacles and challenges and setbacks. I have no idea what those will be like for you. But I believe in starting and I believe in the process. And I believe anyone can. I also believe in the great Rumi quote:
Live life as if everything is rigged in your favor.
Jordan B. Peterson describes a very optimistic view of life whereby a person thinks that all one’s problems are caused by oneself. That way, each person is totally in control of his/her own destiny. I mean, it’s not true. We are not the masters of our own fate. But what if we acted as if we were? Those who think they are the protagonists in their dramas have a lot more say in their outcomes than those who see themselves as victims.
People say you can encourage people but the ethical thing to do is to stifle their expectations lest they be disappointed. I say, why? If more people believe they can, more people will.
Everyone should be kind. But that’s quite different than being “nice.”
According to Wikipedia:
The term”nice guy syndrome” can be used to describe a man who views himself as a prototypical “nice guy,” but whose “nice deeds” are deemed to be solely motivated by a desire to court women.
A nice guy does certain things that appear, on their face, to be nice, but he doesn’t do these actions just to be nice – no, he has an agenda. In his mind he’s thinking, if I do X nice things for a girl, then she should date me. But the girl never agreed to any of this. The way you recognize a “nice guy” is that when he doesn’t get the results he expected, he gets really upset and the nice actions stop. He views these women as leading him on.
This isn’t a phenomenon solely for men though. I’ve seen women also make these mental contracts. I’ve known women who act believing that if she does certain things, the guy she’s dating will want her to be his girlfriend, or will propose or will be a better husband. And then when the guy doesn’t call, doesn’t propose, doesn’t pick up the extra chores, she’s upset. She views these men as players.
In both these “nice people’s” minds is the idea that the other person should have known that the nice guy/girl wouldn’t have done these things without some quid pro quo arrangement. The nice guy/girl held up his/her end of the deal so where was their reward?
So what’s a nice guy/girl to do?
Well, I’m a lawyer so I’m going to say “Make a contract.” But you probably won’t.
The problem with “nice guys” or “nice girls” is that you can only control your own actions. If you expect people to read your mind, you’ll generally be disappointed. Even if they could read your mind, it doesn’t mean that they’ll do what you want them to do. If you need someone else to do something in order to make your actions worth it, either state your intentions and get an agreement or don’t do it.
What does this have to do with finances?
Just like in relationships, you can only control your own actions when it comes to your finances; you don’t have control over results and you don’t have control over anyone else. The important thing here is acknowledging the contracts you are making in your own head. For instance:
You’re killing yourself at work, but no one agreed to promote you.
You write blog posts based on what you perceive other people want to read, but no one agreed to read it.
If you’re acting like a “nice guy/girl” these are reasonable things to do but these actions will only lead to resentment. Instead, you need to ask yourself why you’re doing the things you do. If you find your work intrinsically rewarding, then keep on doing it. If you would only do certain activities if you get a certain return, then you have to ask for it and do what it takes to get the other person to agree. If what you’re asking them to do sounds hideous to ask (if I am nice to you, then you will work for free), then don’t expect a great response.Even if the other person agrees to your terms, you should always act as if the return is uncertain. That means, if it’s something you really don’t want to do, you really shouldn’t do it.
I know everyone says doing what you love is terrible advice. It’s true that it’s a dicey proposition to do what you love and expect to make a living from it. But the worst part of doing what you love is that you might not get paid; you still spent your time doing what you love. If you aren’t doing what you love, you better make sure you are getting something worthwhile in return.
A friend was telling me how he could get any drink he wanted for free at a certain Starbucks because of a deal with his company. He was telling me about how he chose his drink (yes, this was an incredibly long and boring conversation) and I interjected, you don’t drink coffee so why does any of this matter?
I know, he said, but it was free.
He would make an excellent personal finance blogger. =D
When I was younger, I tried to figure out everything I could get for free. But as you get older, you become a little warier about free stuff. Sometimes the furniture is free because it has bed bugs embedded in it. Sometimes the food is free because you’re getting a sales pitch. And sometimes it is a good product without strings attached but it is still too much of a hassle to pick it up or upkeep, or sometimes you just don’t want it.
Free only means it doesn’t cost money; it doesn’t mean it comes without any costs at all.
As I’ve aged, I’ve learned to appreciate the other costs in life. Costs in time, mental energy, space in my apartment, convenience. It makes sense that the more money I have, the less I use money as my only lens with which to view the costs of things, particularly as those other costs have become more precious.
If you have no money, then it may make sense to base your decisions on money. But I’m exceedingly wary of people who have money who base all their decisions solely on money. There are personal finance bloggers who make much more money than I do and who put up all these constraints on how they can spend their money. No vacations. The cheapest food.
I understand dipping one’s toes into austerity. I think it makes sense for everyone to go through no-spend months and to live like they were college students again. It’s important not to forget that feeling. But living your life based on what saves the most money – that’s cheap.
People think lifestyle inflation is the only thing you need to look out for but cheapness is also a pervasive and somewhat easy trap to fall into. What’s the problem, you may say. You’re saving money.
I mean the problem is you’re a jerk. How do you know you’re a jerk? Because you don’t have a code. Everyone needs to have a code. What do I mean by a code?
Imagine your parents assembled the perfect toolbox. They read up on Consumer Reports and spent their time figuring out what was needed for the best toolbox, and then got to work assembling the best hammers, screwdrivers, pliers, you name it. Then one day you ask for advice on a project and you learn that they have never used any of these tools. They don’t even know how to use them.
You ask to borrow a tool. They won’t give it to you. You ask, what are the tools for. Emergencies. The future. It makes them feel safer knowing they’re there. Even though they don’t use them. And then they leave you behind and amass more tools.
Money is a tool. If you have no projects, then why are you accumulating so many tools?
I’ve had former friends who invited people over for food and then told us how much the food they were providing would cost us (it was something like $10/person and they were serving us cabbage soup. I felt like I was getting fleeced. Also I don’t know when I had to agree to eat and pay for cabbage soup).
There are things that will cost money and you will have to decide what is more important to you. Your reputation. Your children. Your parents. Fun. Charity.
You have to set out the tenets you want to live by. Because if you don’t value anything at all, then why do you and how can you value money?
I have two friends who own successful small businesses. One spent $25,000 on two watches recently but the first time I met him, he was giddily boasting about his $6 t-shirt. The other sold his share in his company for $1.2M and the first time I met him, he was looking for street parking to avoid paying for a lot.
One would think, both of these men being cocky alpha males, that they would have tried to impress me from the get-go with their wealth. But they were flaunting their cheapness when just meeting me and I only learned about their wealth over time. I think they both tried to flaunt their wealth to me later (I did learn about the watches and the selling price of the company after all), but what I initially saw was that these were people who were still interested in saving a few bucks here and there even when it didn’t matter to them.
For a different perspective, I remember a grad student telling a friend and me that when she got her first real job she would get a wardrobe full of designer clothing. My other friend in this conversation is a very successful vice president of a major company and I remember her balking at the cost of designer clothing. $600 for boots? No thank you.
So why am I telling you these anecdotes? Well, I’ve seen posts where people wonder if they’ll have to be “frugal forever.” It seems like people are wondering if they’ll always be miserable clipping coupons or comparing prices. What I learned from these anecdotes is that there is no end to frugality. I’m not saying it’s an endless treadmill of counting pennies, but if you get into certain money-saving habits that work for you, that you develop over years, you don’t turn them off even when you gain wealth. You may not be able to turn them off either. Think of it like a train – you spent all this time getting it going that it’s hard to stop it. You’ve built these habits for life.
For instance, I still look at coupon inserts because I used to clip coupons with my mother. This is a habit I’ve had since I was a little kid. I look for promo codes when I purchase items online. I still cook most of my meals at home. I don’t need to save the dollars here and there anymore, but 1) I’ve gotten quite efficient with how I save money because I know what works and where to look; 2) there’s very little incentive to spend more when I know the cheaper option works; 3) I’ve learned to enjoy the cheaper options; 4) the high of saving money doesn’t go away; and 5) I just don’t know another way to be.
So if you’re frugal, you are mindful with your money. You have forced yourself to make decisions that resulted in spending more on things that are meaningful to you and less on stuff that isn’t. If you live that perspective, you probably start to believe that mindset and that’s a hard mindset to break out of. In fact, you probably don’t want to break out of that mindset. You are that mindset now.
So if you’re wondering if you will get to a point in your life when you can finally get rid of your frugal habits, the answer is probably not. Once you develop the habit, you’ve changed something about yourself and your goals. The positives are that it only gets easier to save money because you will find it second nature and you will want to do it. It’s like flexing a muscle. It becomes less awkward and then it just becomes second nature. The negatives (possibly) are that you have fundamentally changed what you value and how you live your life. You may never get that designer wardrobe because you have realized different goals in life.
The other option you have is to get the designer wardrobe, the fancy vacations, the upscale apartment. The truth is that all the choices you make at the beginning of your career and all the ones you are making on a daily basis are creating the habits you will get used to. As I’ve heard Whitney Cummings say about snowboarding, you go in the direction that your feet are pointed. If you’re used to saving, the more you’ll save. The more you spend, the more you’ll get used to spending. The more you do something, the more you’ll value it, the more it’ll become part of you. It’s the habits, the things you do everyday, that will make you into the person you will eventually become. And it’s only much later that you realize what you decided you valued, because that’s the person you became.
The more I read, the more excited I am to read. It’s like learning more about what I don’t know. And it’s exciting and also a little bit embarrassing because I start to get paranoid and think, wait, did everyone else already know about this? Given the rates of reading in the world, maybe not.
I’m sure someone will ask how I read so much. Well, it’s easy to read a book a week if you are a type-A neurotic who takes public transportation and also doesn’t have a very exciting social life. I read whenever I’m in a queue to calm the internal rage that comes over me from waiting in line and whenever else I have a spare moment. I only watch one or two TV shows a quarter and they’re all shows that can’t be binge watched – i.e. I don’t have Netflix. Even so, I’m a little short on a book a week, particularly as one of these “books” is a movie, but I’ve been working like mad recently. I hope to get better!
This book focuses on the irrational ways we handle and think about money. The biggest one that I noticed for myself is faulty comparisons. In the book it’s how car salesmen get you to add on extras to your car, because you mistakenly compare the cost of the extras to the car, which make the extras seem insignificant. For me, I’ll nitpick about the cheapest Uber but forget that I used to spend so much money owning a car. Or I remember this one time when my boyfriend and I had just come back from a pricey European vacation and we balked at paying 10 cents to print out a Groupon for a “free” meal on our way back. We were adding the 10 cents to the vacation and were trying to take a stance of “not a penny more!” but that’s a really illogical way to look at money. And vacations. I should have been comparing the 10 cents to the cost of a comparable meal out, not adding it to the tab of the vacations. (Also no one was keeping track of my budget for vacations for me so it didn’t matter to anyone anyway).
In the same way, I’ve always thought budgets were a little odd. Like if your budget is $100 on clothes and you’re already at $100 in April, what does it matter if you buy the dress you like on April 30 v. May 1?
Understand whether you want coaching, compliments or information regarding your position as feedback and interpret any of the feedback you receive as such. This helps you understand others’ feedback for you and communicate your needs for feedback from others.
The way humans are socialized, we hold a somewhat irrational attachment to our tribes. It’s not that we should break our allegiances but we have to understand others’ allegiances if we are to understand their motivations.
I buy into the idea that I’m attracted to people who represent the negative characteristics of my primary caregiver in an effort to subconsciously repair that rift. That’s why I always date men who oddly remind me of my mother.
Today I will tell you how a tiny bit of success ruined my life (or just derailed my blog). If you check out the archives, you’ll see that this blog was started in 2016. I didn’t start writing regularly, however, until October. Starting in the middle of October of 2017, I tried to write everyday. I didn’t quite make it, but I created enough of a habit that I posted more in November than any month before or after. It felt good building the habit.
Then in late November, I got featured in Rockstar Finance. I can tell you honestly that was not the goal because I didn’t know regular sites got featured on Rockstar Finance. But with that feature, my middling viewership skyrocketed, even if only for a few days. But the surge had a profound effect on me. I changed from thinking, I’m just writing for myself, to, I COULD BE POPULAR. And for a hot second, I chased popularity. I read up on SEO and (ugh) Pinterest. I tried social media, which was great because 1) I finally could claim some Millennial cred and 2) I met some cool people and 3) had very cool experiences like attending CampFi on a last minute ticket. I’ve even set up some interviews with people I met on Facebook that will soon become posts. All in all, I don’t regret social media the way most people do.
But I found that the social media and other activities were distracting me from what I really wanted – which was writing. Yes, the number of people visiting my blog went up a lot, but I only made 6 posts in April, the lowest number I’ve done in 6 months. I’ve heard that successful bloggers focus more on marketing than writing and I’m sure that’s true but that’s not my vision of success.
I think some people may be misled to think that I’m trying to make my blog popular and then monetize like every other personal finance blogger. I mean, I wouldn’t hate it (the monetization anyway, though I’m terrified of popularity) but the overarching reason I write is because writing benefits me.
I have a lot of stories I want to tell. I have 165 drafts in my inbox that represent posts that I’m trying to write. When I started writing my blog, I had 150 drafts. Rather than diminishing, the number of drafts has increased because I haven’t finished them and I keep adding more. My blog wasn’t accomplishing its mission of inbox zero.
I have to remember (sorry readers) that this blog is for me. I mean, I hope it’s helpful to you too, if only in that I encourage you to write more. For instance, here are some ways that writing has helped me:
It helps me store memories and experiences away like Dumbledore. It’s just a relief that I don’t have to remember everything in this tiny little mind I have. Without my journal and my blog, my life would just pass me by and I wouldn’t spend the time to reflect on my experiences or learn from them.
It helps me synthesize thoughts and ideas and organize my thoughts.
It has helped me to connect with others. It’s been lovely reading comments.
Writing helps me remember the things I read in the tons of books I read per year. Otherwise it’s all in one ear out the other.
It helps me chart my progress. It’s amazing when people take pictures of themselves every day for years – you can see the changes as they happen.
Writing down your thoughts is like seeing your mind change. It doesn’t always seem like we are changing but we are, often subtly. If we don’t make a record of who we were before, we might fail to see the progress and think we aren’t getting anywhere. It’s very difficult to take a picture of your mind though – but writing can help take a snapshot of who you were at this period of time.
It helps exercise the creativity and self-expression muscles.
So I’m going back to my original purpose. I pledge to write every day in May. Why don’t you join me? My challenge to you – whether you’re a blogger or not – is to spend some time writing every day this month. It doesn’t all have to be perfect or even intelligible. I will try to make my posts as intelligible as possible, readers, but mostly I just want to make a dent in my pile of ideas and take some weight off my brain. I hope you do the same.
Will you join me in my writing spree? Why do you write?