by Darrin Schenck
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by Darrin Schenck
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As a child of the 80’s and 90’s, this was a mantra that many people lived with. It was almost a decade of great financial times, and therefore tremendous excess. The movie Wolf of Wall Street was a true story, and as crazy as that seemed (if you have seen it) this was what was considered the measuring stick. If you are aware of your recent history, that period had a couple of downturns and ended on a sour note financially. Many people who were living this lavish lifestyle lost it all. At the end of the movie, Jordan Belfort was teaching seminars and doing public speaking to pay the bills; noble pursuits but financially a far cry from what he did in the world of finance.
It is easy to fall into this mindset, as we are inundated with examples of it every day. Our economy is based on constant consumerism; it is literally how our US economy is structured. It was bad enough back in my day, and that was before the internet and social media. Movies, TV and mainstream media did a good enough job of making people feel like that needed to buy new things, live beyond their means and “keep up with the Joneses” their whole lives. The credit card companies love this as they are always the ones who benefit the most from the Hedonic Treadmill lifestyle. With special offers, zero percent interest rates for balance transfers, etc., it is no wonder they sponsor sports stadiums, golf tournaments, and more. They certainly make enough money to do so, and this is at YOUR expense. The regular interest rates are bad enough, but miss a payment or two, and boom…hello 28% interest on your purchases. Car companies created lease deals that let you “afford” more car than you actually can, and they are some of the worst deals going. You pay a chunk of money down, rent the vehicle for two years or more, and then give it back with NOTHING to show for it. Many people end up upside down due to mileage, and roll that negative equity into the next deal. Been there, done that craziness.
So this begs the question:
At what point in your life do you set your EGO aside and start to realize that you will value experiences far more than a new BMW or a $4,000 suit?
For some of us, it happens early in life. That would be a blessing for sure, but it is not always the case. For others, it never happens. Their whole life is based on the opinions of others, and impressing the rest of the world becomes a full time job. Most people seem to fall somewhere in the middle and around 35ish this mindset seems to shift. Life priorities change for many around this time; kids, a mortgage, planning for retirement, whatever. Luckily, something triggers a shift, and from that point forward the mindset starts to see the value of doing things, experiencing things, creating memories has a lot more intrinsic value than buying that new car, or moving to a bigger house that has rooms you’ll never use.
I am not here pointing fingers, I am speaking from experience, it took me a while to get over this mindset.
I was bad about wanting certain labels, driving a certain vehicle that I thought was perceived as cool, and all of the other usual stupidities that go along with it. I (mis)used credit cards to fund this lifestyle, and I lost out on years of compound interest towards retirement because of this misaligned priorities. Luckily for me, I married someone with the opposite approach in finances. My wife is far better about these things, and I have to credit her with teaching me a better approach to finances. I am trainable after all, and with a little work and not too much whining, I have changed over to a far more frugal approach. I appreciate the little things we do together much more than ever, and the experiences and memories we create have way more value to me than another pair of Jordan’s in the closet. The funny thing is, I have a long history of enjoying moments such as fishing trips with my Dad, racquetball tournaments, etc. My life has had plenty of these moments, and I just wasn’t smart enough to really see them.
Because of the new system I operate under, we are in a better financial position that I have ever been in myself. Unfortunately I brought a fair amount of debt into the marriage, but my wife was well aware of this. She was willing to bear the burden with me, and together we have filled in the hole I had dug myself. We are down to just our mortgage payment and a small (but shrinking!) student loan as outstanding debt. We have worked hard, followed the Dave Ramsey method, and are closing in on being debt free.
Because of this, my wife and I had the great fortune to go to Costa Rica on our delayed honeymoon recently, and while this was a little pricey for us, it was far less than it could have been. We stayed with friends for a majority of the trip, and reduced the overall cost by probably 70%. We splurged and stayed at an amazing resort in the rainforest, and the 3 day, 2 night stay was a once-in-a-lifetime experience which we will never forget. It was worth the splurge. But, there was a lot of other fun experiences that didn’t cost a dime, and we will cherish those memories just as much. To do this trip, we saved all of the money that we got from our wedding (two years prior), and we saved up money specifically for this trip. We have worked hard to have no car payments, an affordable mortgage in a modest home, and we just don’t spend a lot of money in our day to day lifestyle. This approach allowed us to indulge in this trip without any concerns, and without a huge regret thirty days later when the credit card statement arrived. We paid cash for everything, and did it guilt free.
Here is the takeaway, you need to get through your head that your life is not made better by trying to live above your means, flex, front, whatever you want to call it. You will work harder, sleep less, and deal with a nagging stress just below the surface that will drive you mad in the end.
To quote the movie Fight Club:
“You are not your job, you are not how much money you have in the bank. You are not the car you drive. You are not the contents of your wallet. You are not your f*cking khakis.”
Get your ego in check, and see the light now instead of later.
I wish you luck in your endeavors.
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