He who Dies with the Most Toys is Dead
It’s sad to me when people look to possessions for happiness. They can fill their lives with toys and have all of the money in the world, but that won’t bring contentment. We all know how fun and exciting it is to buy something we have been wanting for a long time. And, some of the things we buy can bring years of fun and enjoyment. But, anyone trying to fill a void in their lives with toys and trinkets may as well be tossing them into the ocean. True happiness comes from within and money is rarely the source.
Life is more Precious than Money
Money comes and goes in our lives, but time can never be replaced. It slowly ticks away and sometimes ends without warning. I’m not a big fan of the deprive yourself mentality. I spent way too much of my time in my 20s and 30s chasing after dollars. My new mantra is to prosper and enjoy my life and money. That doesn’t mean that I will forsake my future, because I could die tomorrow. It means I’m not afraid to spend money on the things that bring quality to my life.
Money can be the means to a happy life. But, it can also become a source of problems and worry. It can destroy happiness just as quickly as it can bring it. Embrace life and see money for the simple vehicle it is. When your destination is the cemetery, money isn’t going to do you a whole lot of good. If your only legacy is your wealth, your precious life will have been squandered.
The Curse of Consumerism
When I think about the worst of consumerism, I think of the celebrities, musicians and athletes, who spend all of their money on jewelry, cars and houses, only to wind up broke a couple of years later. I think of people like Nicolas Cage who own mansions, yachts and private islands, yet they are on the brink of financial disaster. I think of people like Charlie Sheen whose insatiable thirsts mask a deep void in their lives that can’t be filled. But, most of all, I think of all the awesome hard-working people trying to live the dream, unaware that it’s only a mirage. As they walk across the desert of life towards prosperity, the oasis slowly keeps moving out of their range.
The reality is that consumerism is manufactured. It is created and encouraged by the people who benefit from our blind acceptance of this sham. And, it’s highly effective at separating people from their income. It takes a huge amount of courage to reject consumerism, when we are judged everyday by our cars, clothes, schools and houses. It’s hard to convince our loved ones that diamonds are only semi-precious or that luxury cars don’t represent the spirit of Christmas, because thousands of carefully crafted TV commercials have labeled everyone as failures, unless they can afford them.
Fighting the Urge to Splurge
Broke on Purpose – One way I avoid impulse spending is to constrain my budget on purpose. I have been doing it for decades and it works great for me. Basically, I save 20% of my net, pay extra on my mortgage, pay all of my bills and live on the rest. So, money usually gets pretty tight by the end of my pay period. This keeps me from blowing money on discretionary items. Other people freeze their credit cards in a block of ice or leave them home when they shop. Some people shop only with cash, so they won’t overspend.
Arms Race Treaty – I have two wealthy cousins who always try to one-up each other. One day, they realized their folly and tried a new tactic. They went into an RV dealership together and asked for a big discount for buying two motor homes at once. They both bought the same model, with slight differences, and I believe they still have them. Did you ever consider the Jonses might be keeping up with you? Maybe, you should call a truce.
Meticulous Budgeting – I’m not a budget fanatic, but it sure works for some people. Knowing what should be spent each month for each expense category can counteract the urge to splurge for an expensive item. Tracking your budget points out the frivolous purchases of the past, to help avoid budget busters in the future. If a budget helps you save, I recommend it.
Wait and See – Another strategy some people use is to have a “cooling off” period on any large purchase. A 30-day wait and see period can not only save you money, it can save you from purchasing the wrong items. By the time the 30 days is up, you have had plenty of time to research the item, to make sure it’s the best fit for your needs. An even better solution is the wait and save approach, where you save up the money and buy items with cash.
The Bottom Line
The bottom line is money can buy happiness, provided it isn’t squandered on a bunch of shiny baubles. For me, true happiness comes from a lack of stress and money problems. And, the financial dream of my future is the ability to create my own income, without depending on a paycheck.
“There is no dignity quite so impressive, and no independence quite so important, as living within your means.”
Calvin Coolidge – 30th President of the United States
Recommended Reading
Brip Blap – Emotional Finance
First Generation White Collar – Don’t Let Anyone Sabotage your Future
Economix – Consumer Spending: The Chicken or the Egg
This post was featured on the Carnival of Personal Finance over at Dealerity. If you aren’t familiar with the Carnival of Personal Finance, you need to check it out. It has the greatest collection of Personal Finance bloggers the net.
Fantastic article, I use the same “Broke on purpose” tactic as you by making lump sum payments on my mortgage every time a small chunk of money builds up in my account. At this rate, my mortgage will be done in 2015, closed in 7 years.
This is just my way of securing a lifestyle, i won’t be taking the house with me but right now I am enjoy my home with the family. Life is more precious than money and we still spend on little things that we enjoy like eating out. Life has to be lived in a balanced way, no extreme spending and no extreme frugality is my way.
Mich,
I used the Broke on Purpose technique for so long that people honestly thought I was broke. When I bought my house, people were shocked I could afford it. My old boss thought I was going to cash out my 401K and he warned me against it. He was very surprised when I told him I had saved up the downpayment in separate investment.
As for paying off the house early, I’m all over it. I bought my house when I was 31 and I didn’t want to be paying into my 60s. I’m 5-6 years away and I can’t wait until it’s paid off. Once the mortgage is gone, it opens up a lot of possbilities for travel or semi-retirement.
I’ve thought about this a lot as I see my parents and their friends aging. Also, moving is so expensive with so much going on, I cannot worry about getting the “best deal” on each and every penny spent! Good article.
Barb,
I hope the big move works out for you. I hate to move and will probably live in my house for decades. I have only had two phone numbers and three addresses in my entire life. I enjoy the stability and the solid relationships in my community.
I think getting the best deal is a game of diminishing returns. Unless something is very expensive, like a house or a car, it usually isn’t worth the time for me.
I love the delayed purchasing thing. Sometimes it backfires and I miss a bargain but mainly I avoid buying crap I don’t need
Ben,
I’m usually on the wait and save plan. I still haven’t bought a flatscreen, even though I save enough money to buy one per month. It’s funny how much they have improved in the time I have been waiting. I started out wanting a 52″ LCD and now I want a 55″ LED, with Wi-Fi. When I do finally get one, it will have been worth the wait.
Hi Bret, my husband and I also live well below our means. We have paid off most off our debt – no mortgage, car loans, or school loans outstanding. We just have one 0% credit card left. We have a very healthy amount of savings so my husband can start his new business without having to get a loan.
Jennifer,
Debt is such a drain on people’s finances and it’s hard for people to stay out. It’s awesome that you guys have avoided that trap. I let myself linger in debt much longer than I should have. But, I have always been a great saver.
i agree foremost with living within your means, however if it’s within one’s means to purchase items they want, albeit luxurious or frivolous to others, i think its fine.
i’m caught between trying to balance or curtail my consumeristic desires with knowing that it keeps economies running, trade, provides jobs to others etc… i don’t want to take it all to my grave…i guess there’s the philanthrophic option as well eh?
Zud,
Balance really is the key for me. I figure I can “afford” something if I can buy it with cash (or pay off the credit card bill) after I have paid my bills and made my monthly investments. Sometimes, I have to wait or save for a little while, but that’s OK. I am very blessed with what I have already. When I replace my 32″ TV with a 55″ LED, that will be cool. But, it’s not going to change my life in any meaningful way.
As for others and what they can afford, that’s their call. I don’t begrudge anyone their indulgences. Some people will carry heavy debt to have all of the stuff they want. Others are frugal beyond what I would enjoy. Everyone has their own comfort level.
Good point here: “Money comes and goes in our lives, but time can never be replaced.” I totally agree with you. It’s how we live our life and used our time will most matter at the end.
“It’s how we live our life and used our time will most matter at the end.”
Well said Kathy. Sometimes life is about the simple things and the complicated things just get in the way.
I think people use consumption to fill a bigger, emotional void in their lives. You’re right that there’s a lot to be said for financial security but keeping a close eye on priorities (family, health, friends etc) and what brings you meaningful happiness is absolutely key.
Harri,
I think some people are trying to fill a void and others just like to consume. I love to watch people at work talking about their new clothes and gadgets. The excited looks on their faces is priceless. Two weeks later, they have some new want. Relationships and experiences have a deeper satisfaction and a longer lasting effect for me.
Great article Bret! I love the “broke on purpose” approach. Saving 20% off the top is inconceivable to many, but it’s a lot easier to achieve if you start the habit when you’re young.
Budgeting and the “wait and see” strategy have worked great for us. Even my sons are adopting a wait and see approach when they want to buy something. Often, they just end up saving their money instead.
2 Cents,
I built up to the 20% over many years. When my kids were small and I bought my house, I was lucky to save 5%. But, I always saved something. I am very fortunate, because my current job pays a lot more than my last job. So, I decided to save the difference, instead of inflating my lifestyle.
I like to use the wait and see approach. If there’s something I think I really want, I wait a couple weeks before buying it. If I still want it after that period of time, I I purchase it (assuming it’s within my means). This keeps me from making impulse buys and later having buyer’s remorse.
This has worked for me as well. My wait period is usually longer, because I’m saving up for an item. So, on big purchases, it has definitely kept me from making mistakes.
Hi Bret,
Great post! I’m probably guilty of being a victim of consumerism but I’m learning to look past the clever advertising.
This is the first I’ve heard of the arms race treaty and I’m intrigued. I think it has possibilities and I would like to try it given the right circumstance.
I agree with Mich in keeping a balance. We should be able to enjoy life now and also think of and save for the future. Learn to keep everything in moderation.
Hi Theresa,
Thanks for stopping by.
Moderation and balance are definitely the keys. I’m not very materialistic and I rarely shop just to shop. But, there are some pretty expensive things I would like to have that conflict with my goals and budget. So, I either save up for them or buy them for myself after I have reached a major milestone. That way, I don’t deprive myself, but I don’t sink my finances either.
I like that you made an emphasis about life being more precious than money. It is true. Some people love money more than anything else. They miss the essentials of life as they spend the whole time looking for money. Money is not everything. Yes, money is valuable but don’t dwell too much on it that we forget what matters most. We must remember the love of money is the root of all evil.
Thanks for stopping by Suzan.
I used to be very money-centric, especially when I was single. I think it came from feeling poor and doing without when I was young. As I got older and had a family, I started to realize that my happiness came from my friends and family, not money or things. Now, I consider money as a vehicle to the things that make me happy. I pay attention to it and I work very hard to make it grow. It allows me to live a very nice life. But, I know it’s not the source of my happiness.
Great post, Bret. Now I am not a consumerist at all; I live a very modest lifestyle. However, as I get older I’m starting to spend money a little bit more freely now because I’m beginning to realize that life really is finite. One thing I don’t want to do is end up saving a fortune only to end up dying earlier than I expected without enjoying any of the fruits of my labor!
All the best,
Len
Len Penzo dot Com
I’m doing the same thing Len. First, it was the realization that my kids were growing up quickly and that time was precious. Now, I’m starting to think about all of the things I like to do, surfing, mountin biking and riding motorcycles, and I’m wondering how long before I have to take up golf. All the money in the world can’t buy back that time once it ticks by.
What I have always done is to save and spend in percentages. That way, I am getting ahead each month and I still have plenty of money to enjoy. And, I never feel guilty about saving or spending too much or too little. If I want to, I can always change the percentages.
Very interesting article.
Would you consider the article beelow to be the opposite of the essence of your article or the predecessor to the essence of your article?
http://growmyownmoney.blogspot.com/2011/07/why-i-save-and-why-you-should-too.html
Thanks for stopping by Growing It.
I read your article and I enjoyed it. I have written similar posts in the past. As you found out, sooner or later the rainy day comes and have some money put away helps a lot.