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Dude, Where’s My Wallet?

Notable playwright Oscar Wilde famously wrote in his 1889 essay The Decay of Lying, that “Life imitates Art far more than Art imitates Life”. To simplify his essay, he argues that what we find in both our normal lives and thus in nature are really fabrications, an illusion learned from artists over time. Art has transformed into many different mediums since the time that Wilde wrote those famous lines, yet regardless of the medium, the escapism of art (whether it be literary, cinematic, or otherwise), remains timeless.

So on that note, why do I so ironically satirize the title of the early 2000s slacker comedy Dude, Where’s My Car?, where does Wilde come into play with this theme, and what does this have to do with finance? 

Well, for starters financial behaviors like all disciplines are learned. Unfortunately, our teachers  are too often the media; be it television, movies, music, or social media. We are constantly bombarded by a narrative that shows wealth as yachts, fancy watches, mansions, and Cristal bottle service. The reality, however, paints a very different picture. Let’s face it… 401(k) and deferred compensation plans don’t sound nearly as sexy as wild parties and luxurious living. As Wilde proposes, art has painted a beautiful tapestry of reality (as does media with wealth), and now everyday people do their damnedest to replicate this facade.

A cure for the common hangover?

Reality can be cruel, because while wealth can be a challenging life long journey not easily gained, once obtained it can be so easily lost. In the film Dude, Where’s My Car? our “heroes” Jesse and Chester awaken hungover, and with no recollection of what has happened to Jesse’s car. While the set-up to this film may paint a familiar picture for some remembering their college years, the reality is that a similar haze seems to come over the average American consumer. 

In place of the drunken stupor and the missing car, there is instead a pile of receipts, missing money, and a general malaise that maybe their finances have gotten out of hand. Sometimes a night of drinking might actually be to blame (one too many craft beers, anyone?), but more commonly the weekend bar tab is just a symptom of more problematic spending behaviors. 

YOLO: And Beyond…

While the phrase YOLO (You Only Live Once)is dying out, the mantra seems very much alive. Young people more and more are saying that they value experiences over possessions. In theory that’s an interesting shift, perhaps even noble. Despite the nobility of this shift, this should also cause some trepidation among retailers and those very Millenials and Gen Z who fall into this mold. 

For when these ambassadors of youth take that trip to Europe while Instagramming the whole experience on the newest iPhone, their wiser peers may be laying down a strong foundation for future wealth in these formative years. That’s not to say that I am against fun. Contrary to popular belief, financial planners do have fun, and not every dollar earned is a dollar saved, but I believe fun can be planned to not break a budget. 

So how do you keep up with the proverbial Joneses’? 

In simple terms, you don’t. It used to be that folks would compete against their neighbors through a system of silent sizing-up. Your neighbor purchased a new BMW, you go purchase a Corvette. Wealth or the perception of wealth was on display for all of the neighborhood to see. 

While a love of luxury vehicles (for bragging rights or otherwise) has not died out, for newer generations, status is often about experiences. For example: whoever has the best photos to share and can get the most likes based on that vacation to Bali, or that trip backpacking through Europe has won “status”. In pursuit of being validated by our peers, we may be sacrificing our real ability to build wealth in the long term.

So let’s be real, as in the here and now with how to own your wealth.

While there is no perfect formula for building wealth, I’ve come up with five tips that can help you develop a healthier relationship with spending, and give your wallet hope of one day being stuffed full of greenbacks.

1. No, Can Be a Very Positive Word

Even the most independent person seeks to develop relationships and cultivate peer groups. Friends are a great way to form a human connection and develop social skills. Very often they can help influence us from which school to go to, to which job to pursue, as well as how we choose to live. 

Influence can be a good thing, but friends can also at times hold us back. According to Money Under 30, friends can affect not only how we spend, but how we save and even invest. People tend to seek out other similar people, and so when we have negative behaviors or less ambitious goals, we can end up in a cycle of reinforcing our bad behaviors. 

You don’t have to give up your friends even if they don’t all inspire you to finish law school or max out their 401(k), but it is important to stand up to peer pressure (just like in your schoolyard days), and when appropriate, say “No”. Two simple letters can prevent you from going out when you don’t have the money to spend, committing to lavish trips, or other group activities that could derail other goals.

While we seek approval from our peers, it is important to understand that it may seem weird at first to say “No” to your friends or family without coming off as anti-social or “cheap”. If you approach the conversation with honesty (and provide the “why” behind it) your true friends will understand and support you in your goals, and you may even inspire them as well. In-fact you might find that they share in a passion to be more frugal and would like to engage in less expensive or even free activities.

2. Live Like a Pauper, Retirement Can Be Plush

When I was younger being called cheap was a demeaning way of calling out your lack of wealth, however, I now wear that label with pride. To be cheap is not to be absent of wealth, but to be absent of spending wealth on objects absent of value. 

Penny Hoarder explores this idea further by explaining that you do not have to spend every penny to live a rich life. In this article, the author explains that he and his wife realized that there are experiences that they are willing to pay a premium for, but they’ve found ways to offset this by lowering the cost of those other things that hold less importance to themselves. 

The lifestyle of a “pauper” is easier said than done. When single, you generally don’t need to worry about entering into any tense “negotiations”, but for those in relationships (particular those where finances have become more entwined), it is important to approach your partner on equal footing and with empathy. See our previous article: 3 Ways to Decrease Financial Arguments for more tips on how to engage your spouse in conversations around money.

Lastly, it is important to reframe what retirement and saving really is, and why it is important and worth it to make some sacrifices today to provide for yourself tomorrow. If you were provided a glimpse into the future and saw yourself laid off 6-months from today, would you not be more willing to start saving for an emergency fund? 

Well, in a similar fashion (barring an unforeseen accident or health concern), most people choose an arbitrary age at which to retire or in other words choose voluntary unemployment as they get older. You don’t need a crystal ball to know that one day you may wish to retire, and according to The Motley Fool, the average retirement lasts around 18 years based on a report Vanguard created using data from the Society of Actuaries. This is only an average, if longevity runs in your family, or you retire early, you could be retiring for a much longer period. So while you deserve to enjoy the fruits of your labor today, remember to keep planting seeds (saving) for tomorrow, so you have a sizeable orchard when you do exit the workforce.

3. Do-it-Yourself (DIY)

Time is one of the most valuable resources a person can have, and regardless of one’s station in life, or what their billable hours are worth, none of us can create more time. When you can’t create time, you have to be creative in how to best use the time you are given. 

For many with aspirations of building wealth, much of our time is given to pursuing education and then spent developing a career. The more time we spend on our work, the less we may have to spend in other areas of our life. It is understandable that we often start paying for many services that we may have once enjoyed, or just simply “toughed” out and did ourselves. 

Convenience comes at a great cost, and sometimes it is worth considering whether or not a situation merits a DIY fix. The five questions I like to start with are:

  • Do I enjoy the activity?
  • Am I capable of performing the task with little to no additional training?
  • Is the task vulnerable to human error, and could I end up costing myself more money if I make mistakes?
  • How quickly can I accomplish the activity?
  • How much am I saving after parts and labor are considered?

Why do I ask these questions, well for one, as the cliche goes “If you love what you do, you’ll never work a day in your life…”. I would contend that if you genuinely get some form of satisfaction from an activity, and the end product (whether intentional or not) is some savings, then this is an obvious win-win situation. 

The second and third questions really go hand-in-hand, such as having to learn an entirely new skill and then immediately applying it to a more vulnerable project may not be the smartest or safest move. For example, I generally would bring in an expert if I needed to work on any advanced electrical problems, in lieu of providing myself unlicensed shock therapy. 

Since time is a precious commodity, I also ask myself whether or not I can complete a project in a reasonable fashion. If a project takes me 8 hours, but an expert 2 hours, I need to ask myself what is the project truly costing me? Would it not make more sense for me to find opportunities to use my labor in my designated field, and instead pay for the skilled labor that I may be lacking? When it comes to big projects, it is best to pick and choose your battles and it may be different for everyone. 

Regardless of skill level though, some of the most common DIY tasks that I recommend looking into are:

  1. Yard Work/Landscaping – If you enjoy the outdoors, maintaining your own yard can be cheaper and provide self-satisfaction. $$ – Requires startup costs for a lawnmower, edger, gloves, and other tools. Big Box retailers such as Home Depot even offer free classes.
  2. Car Maintenance – Learning even just a little about your vehicle can save you hundreds if not thousands in costly repairs. One of the wisest investments I ever made was in picking up a car manual and learning more about what I can do on my own, as well as what is best left to the expertise of a mechanic. Labor alone can drive up costs, and it never hurts to be well informed when you are taking your vehicle in for major work. $$$ – While most basic car maintenance can be easily learned via a car manual or even watching videos online, its best to be careful with major work, which if done incorrectly could cause even more expensive problems. 
  3. Cooking at Home – Convenience is a key factor in whether or not someone chooses to stay in or go out, and now there are many options from fast food, restaurants, prepared meal kit delivery, to even more robust delivery options thanks to new food delivery apps. Despite the abundance of options, cooking at home still provides the most value for your dollar. In-fact, Forbes found that dining out can cost as much as five times as a home-cooked meal, and three times as much as prepared meal kit. $$ – Consider treating dining out as more of a special treat, and instead of meal kits, dedicate a day or two during the week to meal prep. You can then spend your evening with a homemade yet still convenient meal that you can prepare in minutes.
  4. Gifting – Give yourself, and give your skills. Gifts do not always have to be store-bought. For those who will not be starting an Etsy account anytime soon (myself included), think outside the box, if you have friends that are new parents, give them an evening out while you babysit, or maybe do some landscaping for an aging parent. Donating your time to your friends and family can be priceless and often more appreciated. If your skills are more on the creative side creating a homemade gift is another way to light up a person’s day. Cooking a special dish, or bringing over a handcrafted gift such as artwork or even a book of family recipes. $ – Requires a creative mindset, but startup costs are low and inspiration can be found everywhere on the Internet.

4. Patience is a Virtue That Can Be Monetized

Despite growing up with instantaneous information, Millennials might just be the ones to set an example when it comes to spending restraint. In-fact, Millennials have long been enemy number 1 of big-box retailers leading many to even say they are killing off entire industries. While this isn’t entirely correct, and innovative retailers how found ways to stay afloat, the reason that Millennials have excelled in the area of restraint is because they do their research. 

Impulse purchases can greatly disrupt a budget, and while cutting back on non-essentials such as the daily Starbucks can help,those big-ticket items are what weigh on a person’s finances. Scientific American has researched the spending patterns of Millennials and has found that they follow certain rules before making these purchases such as focusing on enrichment of themselves and others, putting essentials on autopay, and limiting impulse purchases. Interestingly enough, while these tips have helped, it has hindered them by second-guessing small purchases, without always rationalizing the bigger purchases. 

It can be difficult to wait to buy something, especially in a world where every company seems to want to lend you money. There are times where financing might make more sense than to wait and buy in cash, particularly in the case of purchasing a home or a vehicle. In either case, while financing in and of itself is not problematic, make sure you have a gameplan. 

When shopping for a house do your due diligence, read comparables, build up a downpayment (preferably 20%, though some circumstances may warrant putting down less), and have an emergency fund set up before buying because homes can be money pits. In a similar fashion, shopping for a car takes some time.You may want to purchase a used or new vehicle, and if you make a habit of upgrading often and don’t drive a long commute, it may even be worth considering leasing. 

Even if you decide to buy that big-screen television with 0% interest, it is important to develop a paydown strategy so that you avoid paying interest and can quickly become debt-free again and use your cash for other goals. Some credit cards will even stick you with back-end interest if not paid off at the end of their promotion. Regardless of what you may choose to buy, a good rule-of-thumb is to sleep on it. Impulse spending is like infatuation, and so you may find yourself quickly falling out of attraction to said purchase, but and yet still stuck with the bill

5. The Gift Horse Doesn’t Always Kick

When we are young, one of the first real gut-punches of adulthood is that free is seldom free. It used to be said “Do not look a gift horse in the mouth”, meaning that we should not try to find fault with something received as a gift or favor. As one gets older, skepticism prevails and we are cautious of “free”. Now that we recall this lesson…let’s forget about it for a moment. The American economy is currently experiencing one of its largest periods of prosperity and expansion, and now employers are facing a skilled labor shortage. What this means is that you are in high demand, and more and more employers are coming up with new and creative ways to attract employees. 

As a result of this employers are sweetening their benefits package with everything from matching retirement contributions, tuition reimbursement, student loan payoff assistance, as well as discounted services such as legal, cell phone, and even insurance. 

Everyone can appreciate a bigger paycheck, but oftentimes it is the benefits or lack thereof that can break someone’s financial situation. A great employer retirement plan coupled with a generous health insurance package can go a long way in securing against financial distress.

While there may be some strings attached such as a vesting period for many employer plans, your contributions made are always your own, and your employer’s matching contributions often vest gradually over time. For more information about what kind of benefits to look for with your employer see our previous article: What Am I Signing Up For? – Take Advantage of Your Enrollment Period.

It’s right where you parked it…

The goal of this article is not to associate spending money with guilt or stress. Nor should saving money always be the thing to tickle the happiness receptors. Truly this article is meant to shine a light on how to change behaviors and reframe how spending and savings fit into a well-balanced life. 

Psychologists who have studied people’s behaviors around money have found that when we frame money around how an object or experience brings us happiness it stops trapping us. Suddenly when we view what we purchase in terms of how it affects our day, week, etc., we can then begin to have a healthier relationship with our spending. 

The old adage “Money can’t buy you happiness” rings a half-truth, but it is not the end-all, be-all. Spend money on those things, and people that bring you joy, but don’t forget to save some money for the joy to come. I hope that these money lessons help, and remember you are never financially lost; your wallet is right where you parked it. If you ever forget, My Financial Coach is always happy to help you find your way back to it! 


Andrew J. Crosby, CFP®, ChFc®, RICP®

Lead Financial Coach

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